Reducing inequality should be the number one priority in the upcoming budget – closing the gap between the people receiving $14.25 or less an hour and those receiving $1425 or more an hour. For, sadly, we have both in New Zealand.
What would it take? Economist Thomas Picketty (Capital in the 21st Century) has suggested an 80% tax rate on all income over $500,000 to send a clear message that excessive salaries will not be tolerated.
Certainly a return to progressive taxation is long overdue. Arguably we would not have such inequality in New Zealand today if we had retained our progressive tax system. A financial transactions tax and capital gains or wealth tax would drive this message home.
Benefits and minimum wages would have to rise to a level where people can actually pay their bills and put food on the table.
Free education at all levels and free healthcare – right down to doctors visits and prescription charges – would further tip the scales.
Realistic interest rates, a currency that is not a play thing for international currency speculators, and affordable housing, whether for rentals or for first home purchasers, should achieve balance.
Will we see any of these in the upcoming budget? Or will it be a continuation of trickle down economics, throwing more money at the wealthy in the hope that they will spend it on holidays in Hokitika rather than Hawaii and shopping trips to Porirua rather than Paris?