Tag Archives: British Columbia

Punitive welfare legislation shows up need for Citizens Dividend or Basic Income

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The new legislation against relationship fraud shows we are overdue to move to a Citizens Dividend, handed out unconditionally to individuals, according to the New Economics Party.

Spokesperson Deirdre Kent said the Bill, supported by both National and Labour, just highlights the need for a payment to all citizens where there is no asset testing, no means testing and no prying into the bedrooms of the citizens.

The legislation that would make both parties in a relationship responsible for welfare fraud will only result in tears. “Blaming and punishing doesn’t work and costs heaps in administration.”

“Everyone in our society has probably known someone that has defrauded the Social Welfare Department. The whole benefit set-up just invites beneficiaries to deceive WINZ because a couple gets more income if they live separately. We need a system where there is no financial benefit for those pretending to live apart. Our current targeted welfare system is no way to build a society which claims to value intimacy, honesty and strong families”, she said.

She said the New Economics Party wanted an unconditional Citizens Dividend for all individuals that was not means tested, asset tested or work tested. She said they believe that the benefits of the commons – land and the natural resources should be shared equally and this is a way of introducing an unconditional citizens income, small at first but growing.

She said New Zealand had three precedents for unconditional payouts. In 1948 every household was given a dividend because we had a particularly good wool cheque that year. The second was the Universal Family Benefit that existed from 1946 to 1991 when family support became targeted. The third was in 1977 when the unconditional National superannuation was paid to all over 65 without asset or income testing.

“British Columbia imposes a carbon tax and redistributed the revenue to all citizens and this is a popular policy.”

British Columbia has an effective and politically popular carbon tax

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In October 2013 the Los Angeles Times announced that the climate change debate was over and they will no longer be publishing letters from climate deniers. Great news.

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We live in a convenient spot for family travellers so have had a lot of visitors. Between visitors I have been thinking and reading on the politics of climate change. I noticed that since I started on twitter I have gradually become more and more interested in the topic. The typhoon in the Philippines this year made us all sit up and refocus our efforts to ensure there is a liveable planet for our descendants.

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We live in New Zealand and have watched Australian politics closely. It is been blindingly obvious that a carbon tax can be a recipe for animosity and political suicide both within and between parties. But the bitterness and vindictiveness can all be avoided.

So I was very excited when I read about what had happened over the last five years in British Columbia. They have had a carbon tax since July 2008, starting at the rate of $10 a tonne and increasing every year till this year it was $30 a tonne. In contrast to Australia, the carbon tax has been remarkably successful, both from the point of view of reducing emissions and keeping the economy healthy. Strangely enough it has also kept the government in power.

Why is this? Because they have wisely made it revenue neutral. The Minister of Revenue is obliged by law to look at the tax take from carbon tax and reduce other taxes by at least as much. So it isn’t a tax grab. It is a tax shift away from taxing things you want to encourage such as work, to taxing things you want to discourage such as pollution.

Energy policy activist Charles Komanoff in 2007 co-founded the Carbon Tax Center, website http://carbontax.org. On it Komanoff has written a summary of carbon taxes in various countries and starts with British Columbia. Komanoff believes that support for a carbon tax is growing steadily among public officials, economists, scientists, policy experts, business, religious, environmental leaders and ordinary citizens.

Komanoff is an advocate of revenue neutral carbon taxes. The state does not gain tax revenue from it. James Hansen, an American adjunct professor in the Department of Earth and Environmental Sciences at Columbia University and author of The Storms of My Grandchildren also recommends a fee and dividend system where all the carbon taxes collected are returned to the people.

But what is the best method of distributing the carbon tax money to citizens? I think it is the one used by Alaska which has the Alaska Permanent Fund which pays a yearly dividend to all residents who have lived there more than a year. This system is the closest thing to a basic income guarantee that exists in the world today. It is a small, yearly dividend, financed indirectly from oil revenues, paid by the state government to every citizen who lives in Alaska — including all children.

British Columbia has implemented a carbon tax which is revenue neutral, but they would have been better to use the Alaskan method of fair distribution. We can learn from both, and bring the best of each together.

What astonishes me most about the British Columbia carbon tax is the politics. Five years ago it was implemented in 2008 by the the BC Liberal Party, the party further to the right with the most free market policies. The left leaning BC New Democratic Party wanted to repeal the carbon tax but the BC Liberal Party was re-elected in 2009 and then again in 2013. Income taxes are now down to 10% and the drop in fossil fuel use over the five years has been 17% per capita.

A carbon tax makes sense whether you are a conservative or a conservationist, Labour or National, a climate skeptic or a believer. Right and left must unite on this vital issue as the biosphere is no respecter of political views. As academic Guy McPherson says “Nature Bats Last”. It is time the left leaning parties started to understand that tax shifts are not only politically popular but essential if we are to curb climate change. Adam Smith’s invisible hand works well when people are handed a dividend. On the whole the people will spend it wisely.