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Home / New Zealand

<i>Kerre Woodham</i>: Redundant notion

Kerre McIvor
By Kerre McIvor, Kerre Woodham
Herald on Sunday·
1 Nov, 2008 03:00 PM3 mins to read

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Unemployed men at Al Capone's food kitchen in New York during the Great Depression. Photo / AP

Unemployed men at Al Capone's food kitchen in New York during the Great Depression. Photo / AP

Kerre McIvor
Opinion by Kerre McIvorLearn more

KEY POINTS:

Can anybody explain why we need these redundancy packages? Will we always have them? Or do we only get redundancy packages when recessions fall in election years?

Both National and Labour have been falling over themselves to appear to be the more compassionate and caring party, there to
pick up the pieces when the economy crashes, but what research wallah told them New Zealanders wanted this?

Oh, there are certainly some people who think it's a good idea.

I had a couple of callers to my radio show _ the same sort of callers who would normally ring up and decry beneficiaries _ who thought it was about time middle-class people got something out of the Government and any redundancy scheme should last six months, not three.

One man told me it was all the banks' fault for luring people into mortgages, so the Government should pay if people couldn't afford to pay the bills when times got tough.

For a start, no bank staff pointed guns at homeowners and insisted they take out mortgages. People did that of their own volition.

And if you'd listened to your grandparents, they would have told you not to borrow more than you could afford to pay back.

And for another, it's not "the Government" that will be giving you money. It's me. And your friends and neighbours.

The Government is not a money machine. It's an institution that is funded by taxes taken from all of us.

Where does personal responsibility come into it? I've earned low wages and I've earned high, and I've learned you cut your cloth according to your income.

A pay rise doesn't mean you automatically move out of your worker's cottage, head for the eastern suburbs and take on a mortgage equivalent to Zimbabwe's national debt to buy a mansion. Even if the mansion is in a better school zone.

If two people are working every hour God sends just to cover the mortgage and other household bills merely to get a better postcode on their envelopes, that's bad budgeting and bad decision making.

Yes, it's a good idea for people to own their own homes. All the studies show that it's better for families and communities if people have a place to call their own. But not if they're haemorrhaging to pay the mortgage.

One of the reasons for this worldwide recession is that people have taken on more debt than they could afford to give themselves a better lifestyle.

What the recession is doing is shaking everything and everyone up, and restoring a natural order and balance. But that won't happen if political parties set about subverting the sequence.

Labour's package is particularly loopy. If a person is made redundant, they will get the equivalent of the unemployment benefit for up to 13 weeks even if their spouse or spouse equivalent is on $200,000 a year.

How does that make sense?

National's is targeted at lower income earners and builds on the Working for Families scheme and is marginally more practical _ if you agree that these redundancy packages are necessary. And I don't.

I have no problem with taxes going to people who need a bit of extra help. Who are working low-wage jobs and looking after their families and who don't have a lot to come and go on.

But we have programmes targeting those people already. I see absolutely no point in flinging money at people who have made poor economic choices or who don't really need it. But then I'm not a politician looking to get elected.

www.kerrewoodham.com
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