Abolish GST

At present John Key and National are floating the idea of raising GST

GST a tax on the poor

(goods and services tax) from 12.5% to 15 percent, while lowering income tax for all and also reducing company taxes.  Key and his pals present this approach – lowering direct taxation and increasing the tax on consumption – in a populist way, as if it would benefit workers.  Key has added that the Working for Families package could be increased, along with some other measures, to help offset any losses for lower-waged workers and the minimum wage has been increased (minimally) by 25c an hour.  Once again, there is nothing for beneficiaries.

The first thing to note about GST is how it affects people on lower incomes the most. [Read more…]


Don Franks

The 25 cent government increase in the minimum wage from 1st April was denounced by union leaders as “a cheap shot’ and “mean.”

The increase to $12.75 from April 1st, 2010 is an annual increase of only two per cent. The NZ Institute of Economic Research inflation forecast is 2.3 per cent for the year to March 2010 and the average wage rose 2.8 per cent in the six months to September 2009 alone. That suggests the lowest paid workers are going to be relatively worse off than they are already. [Read more…]

Bad banks or bad capitalism?

The Spark November 2009 Philip Ferguson

One of the issues that has arisen with the current recession is the responsibility of banks for the partial meltdown in the financial sphere.  Sections of both the left and the right had traditionally targeted banks, a practice that has become more pronounced with the new recession.  For instance, on January 19 this year the Financial Times in Britain even ran a headline saying “Shoot the bankers, nationalise the banks.”  In New Zealand, Federated Farmers has accused banks of “profit-gauging” – rather rich when you consider the amount of profit made by Fonterra!  Traditionally, in New Zealand, right-wing nationalists such as Social Credit targeted the banks, a reaction to the fact that the social base of that movement – small farmers and small businessmen – were often squeezed by banks in terms of credit, mortgages, loans and so on.  [Read more…]

Recession and Redundancy

The Spark October 2009
John Edmundson

As the recession has bitten, redundancies have risen and unemployment figures have begun to climb, Labour’s Darien Fenton has had her Private Member’s Bill drawn from the ballot. The Bill would enforce a minimum redundancy payout on all employers, starting at four weeks pay after one year of employment. The Labour Party of course is the party that introduced the Employment Relations Act, which does not even provide a definition of the word redundancy, let alone provide significant protection for workers. New Zealand workers actually have no legal right to redundancy compensation and very few have provision for it in their contracts.

Workers at LWR’s Wairarapa sites who were made redundant earlier this year have been told that they are unlikely to receive any more than seventy percent of their entitlement in redundancy and holiday pay. Approximately eighty percent of staff with written employment agreements (contracts) have no redundancy provisions at all according to a Massey University survey commissioned for the Department of Labour’s Restructuring and Redundancy Public Advisory Group. [Read more…]

The state of the working class

The Spark October 2009
Philip Ferguson

The recession has been officially declared over, thanks to 0.1% economic growth in the last quarter. The government and various economic experts agree, however, that more jobs will be lost over the next year to 18 months.

In The Spark, we’ve consistently argued that the current global recession is nothing like on a par with the Great Depression of the 1930s nor is it the worst global downturn since then. Current trends suggest we made the right call, while many on the left vastly overplayed the degree of economic crisis. However, we’ve also pointed out that it is equally important to remember that this is actually about as good as it gets under capitalism these days – short mini-booms, often in the artificial economy, followed by recessions, with workers usually ending up worse off after each recovery than they were after the previous recovery. [Read more…]