Red Alert

Archive for the ‘Working for Families’ Category

A brighter future?

Posted by on May 15th, 2011

Dr David Clark is the Labour Candidate for Dunedin North. He has worked in shops, in a factory, as a Presbyterian Minister, as a University Tutor and as an analyst at the New Zealand Treasury. He currently runs a University Hall of Residence. 

Red Alert readers will have noted several recent stories about the very real way in which cost of living increases are affecting middle income families. I’ve encountered a fair few in Dunedin in recent weeks with similar stories. Here’s one that stuck out for me when I was out door-knocking yesterday…

Bill and Maree (not their real names) live in their own home, and have worked hard to pay off much of their mortgage. Daughter Lisa?has recently turned 17 and is living at home with Bill and Maree. Son Darren has just finished University. Bill and Maree have always held down solid jobs and bring in an average income. This has generally been enough. They were however impressed last election by John Key’s promise of tax cuts and ‘a brighter future’, and placed their vote with him.

But things have not turned out as hoped. Prices have risen and risen, and bills are getting harder to pay. The tax-cuts they were expecting haven’t lived up to expectations. And then Lisa fell pregnant. It wasn’t planned, but she’s determined to be a good mother.? Bill and Maree want to support her, but they’re fearful they won’t be able to provide all that is needed for the new addition to the household. Having worked hard consistently down through the years, they went down to WINZ with Lisa to see what support is available. Nothing: unless Lisa is estranged from the family. Not until she’s 18.

Bill and Maree are feeling hard done by. Having worked hard and paid taxes all of their lives, they were?expecting a little bit extra from Mr Key. Instead, they’re seeing seriously rich New Zealanders enjoy the big big tax cuts, while they don’t have quite enough to make ends meet. And then, to make matters worse, when they need a bit of help, they’re realising that’s not there either.

Bill and Maree are disillusioned. They’re changing their vote. But on top of their disappointment about Mr Key’s failure to deliver them a brighter future, they’ve another concern. It’s the future of their kids. Not only are they worried about their daughter: their son Darren?is wanting to settle down too.?

Darren’s just finished a degree and has been offered a very good job in Dunedin. But his partner’s pregnant, and they’re concerned about the cuts to Working For Families. With a student loan and the cuts to Working For Families, they too will struggle to make ends meet. Darren’s mates are telling him to move to Oz. One of them has already, and he’s earning nearly three times as much doing the same job.?

This story echoes others I’ve encountered in recent weeks.??

Many ‘swing’ voters feel disillusioned with the Government that they voted in last time.? Some say the jury is still out, and they want to give Key another chance. Others are sick of him.



Tell the Government: Don’t Cut Our Future!

Posted by on April 27th, 2011


t Cut Our Future

Create your own ‘nice to have’ poster

Posted by on April 7th, 2011

“This is not a time we can afford to indulge in “nice-to-haves”, even though sections of the population feel the loss of those services.” Bill English, 29 March 2011

This quote is from a speech that Bill English gave to public service professionals.

Show Bill and John what would be “nice to have” by going to here to create your own poster, email and share it with friends and family.

Here’s mine:

Nice to have

HoS on prices

Posted by on March 6th, 2011

This week yet another family in the same supermarket queue as me had to put some good back cos their card didn’t work.

I think the cost of living is growing as an issue that people care about. The Herald on Sunday has an interesting article this week.

We checked with hundreds of retailers around the country to measure the average price of 70 basic household items from the Consumer Price and Food Price indices. We found that their average cost has risen more than 5 per cent over the past 12 months. Items like beer, cigarettes, petrol and diesel have gone up 10 per cent or more just in the first months of this year; the prices of some fresh produce, like potatoes, carrots and butter, have risen as much as 50 per cent in the past 12 months.

This won’t surprise economists in their glass and concrete tower blocks on The Terrace in Wellington. The Treasury has predicted the Consumer Price Index (CPI) will rise 4.5 per cent in the year to March, and 5 per cent in the year to June.


Forecast inflation of more than 5 per cent means prices at the dairy, supermarket and petrol pump, and the cost of building a new house, will rise so steeply that wages won’t be able to keep pace.

Paul Keane, of retail consultants RCG in Parnell, says that in the 1980s people had secure jobs and their wages were rising. Today the economy is stagnant and inflation is increasingly rampant.

“In the eighties we all had jobs and salaries were good. It’s the reverse of today,” he said. “Mortgage rates were high but money was easily available, hence inflation for the average consumer was not too much of a problem.

You had drinks and barbecues at your home. You lived with it.


Eaqub says that while some goods may have become cheaper in the recent recession, as manufacturers compete for business, food has not.

“It might be cheaper to buy an LCD TV,” he says.”But it’s more expensive to buy milk. And this hits home because we can’t do without food.

“People have to keep buying food. But other retailers of what we call frivolous goods – a lipstick, for example – will feel the pinch.

“If people have to spend more on food, they will cut back on things they perceive to be less necessary items. I believe we’re going back into recession.”

In previous recessions people simply borrowed more money. But this time, he says, people are cutting back and spending less. That strangles the retailers. It is a vicious circle.

The Quake and Politics

Posted by on March 2nd, 2011

Just over a week on my thoughts constantly turn to the people of Christchurch. I am thinking particularly of those who have lost loved ones. For many this is a time of unbearable heartache as they wait for news, any news, of their nearest and dearest, knowing all the while their likely fate. I have been close to two of these situations in the last week and it is truly testing the friends and families to endure the hurt, frustration and uncertainty. I also think of those who are homeless, or in wrecked homes or in streets, especially those in the eastern suburbs still without power, water and sewerage.

The people of Christchurch and their well-being is  the chief concern of all in politics right now, whatever party we are from. In this past week we have all tried to pull together, as communities all around New Zealand have, to do our best for them. Government Ministers are working incredibly hard, as are local MPs of all parties and I want to acknowledge them all for that.

Part of the passing days is that discussion inevitably turn to matters that are more political. We had our first taste of that with the story about Bill English refusing to rule out cuts to Working for Families and changes to the interest free student loan scheme. John Key followed up today saying there was an ‘opportunity’ to look again at these policies. Phil Goff has responded saying that cutting incomes for families and increasing costs for students and graduates like this is not the correct response, and that there are other choices the government can make.

The mere fact of this debate has caused anguish for some. I accept that this is a sensitive area. As I said there are many people still waiting to learn the fate of their family members, and thousands of people doing it really tough every day. But the discussion about the future of Christchurch and what will be done is now in the public arena as likely costs are released by the government, and questions asked by the media and others. It does not, and should not stop the focus on rescue, recovery and ensuring the immediate health and safety of residents.

In fact it is important for our democracy that the debate is held. These are important decisions about the future of our whole country, especially Christchurch, but for all of us in the end. The choices that are made, and the priorities accorded to future spending need to be the subject of debate. There is need to hold the government to account, and to oppose and propose where necessary. This is not disrespectful to the people of Christchurch, it is in fact to support  them and take further steps to recovery.

We must strive to work together for the people of Christchurch. We must be sensitive to an emotionally charged situation. But there will be debate and disagreement. That is a healthy part of our democracy. That is part of politics. And politics need not be a dirty word. It should be the mechanism by which we go about about finding the best outcome for the people and the future of Christchurch and the rest of our great country.

‘Working for Families’ thieves

Posted by on January 17th, 2010

I had lunch with a very successful friend of mine a couple of days ago and he casually mentined that his accountant had asked him if he wanted to structure his affairs so that he could claim working for families.  This friend, who has worked incredibly hard and taken a number of risks over the years – and has deservedly reaped the rewards – said no, however, his accountant told him that many of his other weathly clients were claiming working for families. 

Like my friend, I find it obscene that some individuals would go to such lengths to rip the system off to such an extent.   This is a fundamental breach of the whole philosophy behind Working for Families – and a betrayal of the principle of an equitible society.  There will always be those who structure their financial affairs to avoid tax, but then to have the audacity to claim working for families is a real slap in the face to ordinary hard working kiwis who are struggling in these difficult times.  

There was a story in the Dom Post by Vernon Small (21 Aug 2009) that highlighted the fact that 35 families with a household income of more than $150,000 are pocketing Working for Families cash.  I suspect there are more.  The story went on to say that the IRD had identified more than 9700 households who were claiming Working for Families, having restructured their financial affairs to obtain eligibility.  Vernon’s figures showed that in total these people receive $59m in assistance, an average of $6223 each a year.  As Labour’s Revenue spokesperson, I will do whatever I can to change the law in this area to ensure that this loop hole is closed as soon as possible.  

Labour’s Working for Families has lifted thousands of children out of poverty and it has always been my view that it is the most effective income-redistribution policy ever, with more than 370,000 families receiving help through the scheme.  About 80% of these families have an income of less than $59,000 a year.  It is these had working New Zealanders that the scheme was designed to help, not those who are earning the big bucks with the smart accountants.  The IRD is on to this outrage and they will receive my full, total and proactive support.