Maori getting best deal say Act

By RUTH BERRY, political reporter

Act says Maori get $5 billion more a year from the state than they contribute in tax, a result of "race-based" policies that reward dependency and penalise working people.

The party has not sought to analyse figures for other groups and Act leader Richard Prebble admitted yesterday similar gaps could be identified among other low-income New Zealanders.

The party opposed "race-based research", but felt obliged to release this work as it proved wrong a misleading report commissioned by the Government early last year to justify "advantaging Maori at the expense of other groups in society", he said.

The size of the "tax-to-benefit gap" would surprise people and encourage them to challenge Government policies.

The Herald revealed Act's plans to release the research last month, after obtaining leaked papers showing it was debating how to pitch it. They showed Act was worried it would fail to trigger public interest if it was seen to "demonise" Maori.

Social Services Minister Steve Maharey yesterday accused Act of doing just that, saying it was simply continuing to Maori-bash.

He rejected Act's reasoning and said the suggestion it was releasing the data in "sorrow rather than anger simply beggars belief".

The report Mr Prebble was referring to was released by Te Puni Kokiri (the Ministry of Maori Development) and the Institute of Economic Research, which said Maori paid more in tax - $2.4 billion - than they received in social benefits, worth $2.3 billion.

Act's figures say Government spending on Maori is $7.3 billion a year, compared with $2.3 billion taken in tax.

While the initial report included pensions and welfare benefits it failed to take other Government spending into account, such as money spent on health, education, law and order, Act says.

Act's figures include "targeted" spending, such as spending on Maori television and Closing the Gaps - worth 2 per cent of the total $7.3 billion.

Mr Prebble said the size of the Maori tax-benefit gap raised important questions.

"What is the country receiving from this enormous investment?"

Tax paid should ideally equal the benefit received.

The evidence indicated Government spending was a large part of the problem, not the solution - and the state had killed Maori initiative and was rewarding "dependency" and "thriftlessness".

Government proposals to spend more on low-income households in the Budget would only increase the tax-benefit gap, he said. The money should instead go into tax cuts to those who were paying more tax than they were receiving.

Mr Maharey said it was difficult for anyone to assess exactly how much tax Maori were or were not paying.

"They [Act] have very clearly set out to paint a very grim picture to suit their own political ends."

It was no secret Maori and Pacific people were underachieving and over-represented in poor health and criminal justice statistics.

The Government was trying to rectify the imbalances.

Its single biggest investment in Maori and Pacific people was in education and training.