Any of us that have advocated reform of child support are well aware that the methodology of the tax is to attack the isolated and vulnerable recently separated father. The ideology of the tax is if I have your child, you have my income. The essence of father is reduced to a puerile and degrading farce of the state family. Increasing invasive mechanisms will not only garnish wages, collect money from bank accounts, but will also divert financial transactions in the name of expediency for the child. The crippling financial effect not only undermines the individual, but a society’s future potential. If you don’t leave the country you probably won’t aspire to much more than Joe 6 pack. In essence the state has traded the future potential of the individual for cash up front, but here’s the mockery: others can’t see the same game being played with them, with just a different form of the same abuse. Middle New Zealand’s aspiring young parents pay by a different method. As the Government controls the ocr it dictates interest rates. This brings overseas money into our investment banks, which in turn is leant to the community. It also raises the value of our dollar, which as we know lowers export productivity. This makes our imports cheaper, which is good for the retail sector. Banks have got to lend this money somewhere and they lower the threshold for property ownership and credit. Plenty of money and plenty of demand and this fuels our property market, and retail markets. The interest rates we pay are not staying New Zealand, only the margin is, the balance is being taken out of the country by foreign cash investors. Banks are not going to be inclined to invest in export oriented business, while there is a high dollar, they have a higher risk. By stimulating the retail sector, it does something else. With all due respect to our retailers the reality is it is generally a low wage, low skill, industry. You think you’re not just handing over money to a growing underclass, then look at it this way. Your high interest rate makes imports cheaper and money available to lend, and raises the spending power of low income earners. The Government has also signed up to Kyoto. What this means is that someone has to be taxed to create a carbon balance of payments. Rather than tax the man in the street it has tried to impose the tax first on agriculture which didn’t work, and now on forestry, which is an equally unwelcome move. In all three situations above the same principle is being applied, and is not only to seize current income or wealth, but future income and wealth. In terms of an economic strategy this is now creating serious uncertainty in future investment in New Zealand by its own citizens both productively and financialy with limited outcomes for the Government.
But it has many more negatives.
Low skill work force.
Encourages high skill departure.
Indebted consumer society.
Excessive investment in property.
Low productivity from primary produce and exports.
Undermines Kiwimade products.
Undermines wealth retention, and reinvestment in New Zealand.
Undermines our economic independence.
Which all adds up to social degradation.
I liken Mr Cullen’s financial strategy to something along the lines of a Russian Retreat. After having mounted an economic offensive against his own country he is walking backwards leaving a trail of destruction as he goes. Rape and pillage always starts with the vulnerable. We care about Rape but not about Pillage. The inevitable result is that one day those that do bother to stay will inherit a hell of a mess to clean up if we continue to run our country this way.
Mostly this website is dedicated to the social outcomes for fathers and children. Economically we to tend to talk about child support in isolation, rather than in the context of the economic strategy of the country. For high income earners child support is either avoidable or affordable, but for Joe 6 pack, you don’t care about him, chances are his kids won’t care about you either.