“The International Monetary Fund has urged the Government to cut spending by better targeting Working for Families, student loans and free GP visits to get its books back into surplus.
“But Prime Minister John Key rejected the call, saying National had campaigned on preserving those entitlements. “It’s not my intention to break those promises.””
Once again, Mr. Key hastily rejects what is eminently sensible advice, on the basis that he promised not to change anything. I seem to recall National making much ado about how they were going to reduce taxes as well, but that didn’t last very long, did it? Surely if the economy is damaged enough to delay the reduction of taxes, it is damaged enough to reconsider some rejigging of the three items the IMF suggests?
There are people receiving WFF tax rebates who are earning more than I am. Why the government thinks it is a good idea to take in taxes and then give them back again is a mystery to me. Surely it would be better not to take them in the first place? All you are doing with WFF is reducing the productive value of that money by churning it through government administration.
Student loans are even more poorly targeted. The two MacDaughters are at university and have (interest-free) student loans, despite their father earning considerably more than the average wage. This in itself is dumb. The money would be far better spent channeled into scholarships for students who are excelling at university, providing some incentive for university students to put some effort into their studies. Providing interest free loans for the very people most likely to be able to repay the loans seems a little crazy to me anyway – especially as those very same people are going to be paying that interest back in spades through the taxes they will have to pay to continue supporting the scheme.
I have saved the dumbest for last. Subsidized visits to the GP. How stupid is it that someone earning $200,000 a year can enroll at my practice and get his toddler seen for free and himself seen for a discount? This is not a free service. I still get paid for my consultation – you just pay for it through your taxes with the same loss of value as Welfare Working For Families. For the life of me I can’t see what was wrong with discounts targeted for those who qualified for community services cards or a similar stratifying device. Mr. six-figure-income does not need a discount for a GP (and probably has medical insurance anyway).
The IMF suggestions make very good sense. John Key would be advised to follow them as soon as possible.