The Rich-Poor Gap: Fiji New Zealand Parallels

 One measure of social wellbeing in a country is the rich-poor gap: the smaller the gap, the higher level of wellbeing.  In recent years, this gap has been widening in many countries, including New Zealand and Fiji. Among my emails last week was one from the NZ Greens Party. Their proposals to narrow the gap is of special interest because they advocate many of the measures to which the Fiji Government is already committed.



They were suggested because they oppose the increase in GST (Fiji's VAT) that increased by 2½% to 15% on Friday. GST and VAT widen the gap, especially if they do not exclude basic food and other essential items, because  the poor spend proportionately more on food and essential items and have few savings for discretionary spending. Conversely, it would be gastronomically impossible for the rich to spend-- and eat -- the same proportion of their income on food. If the Fiji Government increases VAT, as it may well do to increase revenue and placate the IMF, it is to be hoped all essential items will be made exempt.

I quote from the Greens email:

"This package contains eight simple solutions in four areas to take us towards greater equality and to reduce the gap between rich and poor in Aotearoa New Zealand. These are not intended as a comprehensive solution to the problem of growing inequality, but as eight simple, practical initiatives that can be implemented immediately." The eight solution were about tax, energy, income support, and housing. On tax they wanted the poor to pay no tax and the rich to pay a capital gains tax except on family homes. On energy they wanted progressive electricity prices. On income support they wanted in-Work Tax Credits for all low income families with dependent kids and the reinstatement of  a discretionary Special Benefit.  On housing they wanted 6,000 new state houses in the next three years, investment in community housing and secure long-term rental tenure.

The most obvious similarities with Fiji are: FCOSS's suggestion for lower electricity prices for NGOs because higher prices mean they have less money to help the poor;  Government's income support, food coupons, school bus fares, free school textbooks, tand the recently announced Consumer Council's Price Control powers; and for housing, the rent freeze, its collaboration with NGOs on squatter housing, and its redirection of the Housing Authority and Rental Board towards the provision of low cost housing.

It is both sad and ironic that Greens Party Foreign Affairs spokesman Keith Locke, an implacable critic of the Fiji government on "political" grounds,  knows so little about the Government's social policies and actions.