Comments on: Statism and Wealth Re-Distribution

By: Madeleine

Madeleine — Sat, 01 Nov 2008 03:01:00 +0000

Samuel that happened to us just recently. I got a pay rise - came home chuffed because I got it as a result of performance and not because of the annual pay-rise everyone gets.

We celebrated! I was on cloud nine. It wasn't just a pay-rise but also came with an increase in my legal responsibilities - a career I began pursuing back in 1993 when I first began studying law and I am still trying to realise. It was a real honour and I felt proud of myself because I had earned it and it had been recognised.

Then my bubble got totally burst. I phoned the government to tell them about my pay-rise so they could adjust our welfare (there is SO much wrong with that statement!)

The next thing I know our WFF is slashed by $250 a fortnight, we got a letter from Community Services Card telling us we no longer qualified for that.

Basically the pay-rise put us right back where we were and now we had to pay more for doctors visits and prescriptions.

By: Madeleine

Madeleine — Sat, 01 Nov 2008 02:55:00 +0000

The welfare abatement demonstrating the ridiculously high marginal tax rates was factored in, that is why family 2 gets less welfare.

By: Mr Dennis

Mr Dennis — Fri, 31 Oct 2008 23:53:00 +0000

Well written. My wife has actually encountered people who have received a pay rise and ended up with less take-home pay.

Many people are now dependent on WFF, so we can't just get rid of it. But we need to adjust the system somehow so you actually get rewarded for personal achievement, while ensuring families have enough income (more specifically, enough buying power, which will be affected both by actual income and by the prices of essentials).

Labour has been playing Robin Hood for too long, eventually the system will fall over.

By: Spam

Spam — Fri, 31 Oct 2008 20:46:00 +0000

Could you also include the welfare abatement to demonstrate the ridiculously high marginal tax rates? They are also a disincentive to improve your lot.

By: overtaxed

overtaxed — Fri, 31 Oct 2008 06:07:00 +0000

Exellent post MandM.

It shows that you are better off to have 1 child and earn $40K rather than be childless on $70K.

Earn 40K with 1 child = $52146 in the hand.
Earn 70K with no children or older children = $51910 in the hand.

How is this going to encourage people to get educated and improve themselves when they are better off to have a child and stay in an unskilled role.

What message does that send?

By: ropata

ropata — Fri, 31 Oct 2008 02:22:00 +0000

This form of redistribution penalizes young and student-loan strapped workers, delays the ability to purchase a house, and hence delays family formation. WFF takes no account of existing wealth. I accept the need for some form of safety net, but this is insane. The Boomers exploited Gen X, now Gen X is raiding the coffers. Of course this is only temporary until the Government itself is bankrupted.