Opportunity’s ‘tax reset’ could benefit many households – but does little for the poorest
Opportunity’s ‘citizens income’ policy would do the least for the worst off, and retains many of the current system’s targeting complexities.
The Opportunity Party's "tax reset" proposal, unveiled ahead of the November 7 election, has garnered attention as a potential solution to New Zealand's welfare issues. However, the policy's effectiveness remains a subject of debate. The plan, essentially a universal basic income (UBI) with supplementary payments, is intended to replace current welfare benefits and NZ Super, funded by a land tax.
This approach aims to address the first major design flaw of UBI proposals – providing insufficient income for most household types – by including additional payments for specific groups. However, the proposal falls short in addressing welfare poverty, particularly for the poorest households. The land value tax, while economically efficient and hard to avoid, would likely lead to a significant decrease in land values, potentially causing negative equity for many homeowners, superannuitants, and beneficiaries.
The Opportunity Party's policy, while seemingly designed to match current welfare payments, leaves the poorest beneficiaries with minimal gains, raising questions about the proposal's overall effectiveness in addressing welfare poverty.
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