On the rare occasions when it ever gets asked, the public keeps rejecting tax cuts as such, as a policy priority. It keeps saying it wants tax levels to either stay the same or be increased, so that public services can be maintained, or even (perish the thought) improved. In 2018, after nine years of the systematic underfunding of health and education by the last National government, the public wanted better: 

A UMR survey….shows 92% of Kiwis agree public services like hospitals, schools and the transport system need more government funding.

The same poll also found this:

Almost two-thirds said the government should increase tax to at least maintain public services at their current levels into the future.

On the weekend, a poll released in the United Kingdom revealed that the British public feels similarly aggrieved about the toxic impact of tax cuts on public services:

About a third (34%) say taxes and spending on public services should remain at current levels, while 26% think there should be an increase in tax to increase funding. Only 22% said that taxes should be reduced and less spent on public services.

In sum then… Less than a quarter of the British public want tax cuts, because this will mean less spending on social services. Even so, we saw here last week how Christopher Luxon’s devotion to tax cuts was making it very, very hard for him to commit National to keeping health funding up with inflation - let alone to enable the public health system to meet the future needs of an ageing population, and the needs of a frontline health workforce already in crisis. Similarly, National has promised to pay for its tax cuts by scrapping the Three Waters reform of our decaying water infrastructure, again without offering anything at all in its place beyond… More tax cuts for the wealthy, and the renewal of a $1 billion tax write-off for landlords.

Still, National can always be relied on to A: play the race card B: talk tough on law and order and C: beat up on people on welfare, or sometimes all three at once. On the weekend at a gathering of the party faithful, Luxon unveiled National’s solution to youth unemployment. His diagnosis? The “free ride” that unemployed 18-24 year olds have allegedly had under Labour will be over, and young people “who don’t want to work” will have to do so, on pain of losing their benefits. [For the record, the Jobseeker youth support for 18-24 year olds is $275 a week. The average rent for a room in Auckland in 2021 was $240 a week. Some “free ride.”]

Crucially, Luxon’s solution would privatise an aspect of welfare delivery. It would do so by creating profit incentives for “community providers” (undefined by Luxon, and apparently unregulated) to take over the delivery of welfare to any young person who has been out of work for more than three months. At which point, those 18-24 year olds would get a “job coach” and if they stayed in work for more than 12 months, they would receive a $1,000 bonus. Those still unemployed after 12 months would be at risk of losing their benefits. (And then how would they pay the rent, and buy food? No word yet from Luxon on how his proposals might then be reflected in the youth crime rates.)

Oh sure, MSD already has case managers for the youth unemployed, but Luxon chooses to call them “bureaucrats.” His real goal is to open up welfare provision to profit-motivated firms from the private sector. The incentive for this new category of “job coaches”? They will have a financial incentive to get young people quickly off the books by whatever means necessary, even if that means forcing them to work (under pain of losing their benefit) for low wages and in conditions where the employers in question cannot currently attract and retain staff. Will those job coaches be required to offer wraparound support services, re-training options and upskilling? Hardly. Surely, that would erode the bottom line.

This youth policy is also in line with National’s wider “social investment” strategy. This is also a form of welfare privatisation by stealth that – similarly – places all of the “responsibility” for being out of work entirely upon the shoulders of the individual welfare recipient. There was nary a hint in Luxon’s speech of the structural causes of job losses and unemployment in some of our communities, or why crime, drug use and gangs have filled up the void left by the destruction of good jobs, partly in consequence of the neo-liberal policies pursued by successive governments. No admission either, that our history of de-unionisation may explain why Kiwis get lower wages and poorer work conditions here, when compared to Australia.

All of this is somehow to be regarded as the fault of the people on the welfare rolls. Luxon’s solution? Tax cuts, and trickle-down economics. Truly, National and ACT do not have between them a single idea that’s less than 40 years old, when it comes down to how to manage a modern economy.

Re-inventing the wheel

As PM Jacinda Ardern pointed out on RNZ this morning, the main elements of National’s proposed scheme already exist. MSD already has personal case managers, wraparound support services, upskilling and retraining supports and - ultimately - sanctions for wilful non-compliance. Given the extremely low levels of unemployment that we have right now in New Zealand, Guyon Espiner was dead right to suggest on RNZ this morning that Luxon’s scheme looks more like a solution in search of a problem.

So why have Jobseeker numbers increased among the young over the past few years? It appears to have escaped National’s attention that the pandemic has demolished a lot of jobs in sectors – hospitality, tourism – that have traditionally hired lots of 18-24 year olds, even if only on the minimum wage and/or in part-time jobs that offer no career prospects. Currently, the recovery in those sectors remains tentative at best.

Moreover, within the New Zealand economy, the wages in those sectors are so low, the work conditions so poor and the rents so high (eg in places like Queenstown crying out for labour) that very few young people could afford to relocate there to do those jobs, no matter how much pressure they are put under to do so.

At the heart of Luxon’s messaging is the stereotype of the feckless young, who are too bone lazy to get up off the couch. Certainly, that negative image went down a treat with the greying, well fed attendees at the National Party conference. But using unemployed 18-24 year olds as a political football – while feigning concern for their moral wellbeing and lack of personal “responsibility” - is loathsome. Especially when many of the people who were applauding Luxon seem willing to avoid their own responsibility to pay a fair share of tax, and thus contribute to the wellbeing of the community.

Footnote One: This week, Luxon is claiming to care about gainful employment, and about how important being in work is for social cohesion etc etc. Yet only days ago, Luxon was railing against the Reserve Bank operating with a dual mandate – inflation and employment – when it sets interest rates. Luxon promised once again last week ( as he did in February) that his government would scrap the requirement that the RBNZ should have to consider the likely impact on employment when it makes its decisions about the official cash rate.

So… How is scrapping the employment part of the RBNZ mandate going to help young people into jobs? Or is this another example of Luxon saying contradictory things to different audiences and hoping that they never join the dots? BTW, the central banks in Australia and the USA have the same dual mandates that we currently have, and yet they manage to run relatively successful economies. Job numbers in the US are looking pretty good, in fact. The UK central bank does have only an inflation mandate, but not too many countries would be wanting to cite the British economy as a model.

Footnote Two: At the National Party conference, Luxon denounced the rise in youth unemployment numbers since National left office. Yet… The figures in Australia show the same pattern as here:“The unemployment rate of young people aged 15–24 in 2020 was 16% an increase from 12% in 2019.” How come? One of the main reasons could be… It’s the pandemic, stupid.

Nora Brown, teenager

Talking of the young whipper-snappers of today…despite just having turned 17, Nora Brown already has three albums and an NPR Tiny Desk Concert to her name. At 12, Brown was the subject of the short documentary Little Nora, The Banjo Prodigy. Here from a live performance recorded only a few days ago, is her lovely re-working of the “Wild Goose Chase” tune by Virgil Anderson (1902-1986) a folk musician who lived in eastern Kentucky:

The Tiny Desk Concert kicks off with her version of a song better known as “500 Miles.” But as Brown later explains, her version of the song is one she learned from a recording by Addie Graham (1890-1978) another musician from the mountains of eastern Kentucky. The next tune she plays on Tiny Desk – - “Miner’s Dream”- also hews pretty closely to an interpretation laid down years ago by Virgil Anderson :

As Brown says, learning music at first hand (where possible) is the best way to honour the tradition. This final clip is a stunning example of an old musician Lee Sexton (1928- 2021) then aged 90, demonstrating to a 12 year old Nora Brown his version of “Cumberland Gap..” On a purely human level – let alone the musical one – this is wonderful to watch:

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