In a rather interesting post this morning, David Farrar over at Kiwiblog argued that National needs to do several things to regain momentum. Responding to rising concern about child poverty was one of them. One comment was particularly revealing:
National’s policies around welfare reform, national standards, reducing child abuse, better domestic violence laws are in fact all about reducing real child poverty, and giving more kids a better start in life. The left’s only answer to these issues is tax and spend. They won’t confront the much tougher issues of welfare dependency, the bottom 20% of students etc. National will.
It is not often that someone like David shows a total blind spot about his opponents, but perhaps it's just the context of a post advising National how to proceed.
Redistribution is indeed a core strategy for us on the left, but it is hardly the only one.
It is useful both in terms of taxing and in terms of spending. Markets distribute income in a way few regard as fair. A progressive income tax system is a policy all significant political parties support, with debate being about the steepness of the progressivity involved — not whether there is some. Same with spending. Labour's Working for Families tax credits redistributed money from households without kids to those with kids.
(As an aside, National defined this as communism by stealth, but has kept it anyway. Same with interest free student loans. Talk about a party that falls over whenever its principles are even mildly unpopular. Watch them give up on asset sales next...)
Never ever has tax and spend been our only response to poverty. Child poverty comes about because children live in poor families. So the left's historic and modern mission to tackle inequality is at the centre of the fight to change the depraved insanity that keeps too many of our children in poor households.
Besides redistribution through tax and spend, what other tools are in our toolbox? Here are a few of them:
- Promotion of collective bargaining and workplace rights: these leave incomes higher for those at the bottom & in the middle of the income distribution. More equality, less poverty.
- Support for civil society campaigns like the Living Wage: to improve further the share of the economic pie that goes to working people. More equality, less poverty.
- A welfare state structure that supports children. This might be a part of 'tax and spend' but one could also simply target existing welfare spending differently to help kids more. More equality, less poverty.
- Strong minimum code rights on issues like minimum wages, paid parental leave, annual leave and so on. For the most vulnerable workers, this can make a major difference. (Look at what current silly plans to cut youth minimum wages will do to young peoples' incomes.) More equality, less poverty.
- Full employment as a focus of economic policy: jobs are the best route out of poverty. Economic policy needs to focus on high and stable levels of employment, so fewer people are on benefits. We got numbers on benefits down from 400,000 to 280,000 before the change of government and the GFC. Jobs with good incomes are the best assurance against poverty. More equality, less poverty.
These strategies go far beyond 'tax and spend'. Nobody should be surprised by this. Labour exists as a movement to make life better for people — for pretty much everyone.
That requires fairer sharing of the huge wealth of our economy among all our people. Fiscal policy, market structures, monetary policy, development strategies all have a role to play. Whatever you call it (the term 'per-distribution' is a bit in vogue in some parts of the left), the agenda is right at the heart of our politics and we use many tools to bring it about.
National doesn't believe in that agenda, and that's why National cannot sort out the child poverty crisis. David's suggestions might help a bit at the margin, but they won't turn this disaster around.
Just another reason why New Zealand needs a Labour/Greens government: to really, profoundly change things.