Richard Prebble: Vast benefit gap gives Maori more

COMMENT

Act has produced significant research that shows there is a $5 billion Maori tax-to-benefit gap. For every $2 Maori pay in tax, Maori receive $7, a net gain of $5.

Last February, the Government published research that claimed Maori households contributed more in tax than they received in benefits and other Government transfers.

Labour commissioned the race-based research to justify its race-based approach to social spending and its preference for Maori in spending programmes. An Institute for Economic Research study appeared to validate this approach.

But Act's research demonstrates that the Government's published research is wrong. Maori households do not contribute more in tax than they receive in benefits; the reverse is true.

The Institute of Economic Research finding is false because the researchers left out non-cash benefits received by households. Non-cash programmes, such as health and education, are the bulk of Government spending.

Act has debated whether to release these findings because, as a party, we do not support race-based policies. We also realise that those who are the beneficiaries of race-based programmes will attack Act as racist. This has already happened.

The Prime Minister, Helen Clark, has called Act "fanatics" for having done this research, and claimed we intend to use our research to promote racial division.

The Minister of Maori Affairs has also claimed this research shows Act to be Maori-bashing, ignoring the fact that his department commissioned the original research.

It is a deliberate strategy to attack anyone who questions the effectiveness of spending on Maori as being racist. In a multiracial country, to be called racist is a serious matter. Fear of being so labelled has prevented open and intelligent debate on Maori issues.

Despite the Government's pre-emptive attack, Act is publishing the research. We are satisfied that our research is professional and accurate. We publish in the hope that intelligent New Zealanders will go past the personal abuse and examine the facts.

The research needs to be published, not just to keep the Government honest or because the taxpayer paid for it; these are significant findings.

Some $5 billion a year is a huge sum. It is about what the Government spends every year on roads, defence, police, courts, prisons regional development, conservation and the arts.

It is more comprehensible to look at the money in individual terms. Maori, on average, receive each year in benefits from the taxpayer $8000 more than they pay in taxes. Over a lifetime, the average net benefit for each Maori is $560,000.

Put another way, on average the Government will take from every non-Maori over their lifetime $120,000 to give to Maori.

These transfers do not include Waitangi settlements, the allocation of radio wave bands, the fishing settlement or the foreshore claim. They are all extra.

The taxpayer transfers put the Waitangi settlements into context. The fiscal envelope for total Waitangi claims is $2 billion, less than half the annual transfer to Maori.

This research raises important questions over the Government's priorities and approach. Act's first concern is over the value of this type of racial research.

Racial research implies that all Maori adults are receiving a subsidy of $8000 a year. Not so. There are many successful Maori. There is a growing Maori professional class who earn good incomes and pay the 39c income-tax rate.

Racial research implies that all Maori fail. Despite Government programmes, there is growing evidence of increasing Maori success. There are more Maori at university than ever. There are a growing number of Maori-owned and operated businesses. There is a Maori renaissance in the arts that is helping to redefine how we see ourselves.

Racial profiling is not needed and it is dangerous.

Most New Zealanders are willing to pay taxes to enable a Maori child on the East Cape to have an education, just as we are willing to pay for the education of the child of a Christchurch skinhead, whose life chances are just as challenged.

The Institute of Economic Research study was commissioned to justify the Government advantaging Maori at the expense of other groups in society.

Act rejects this view of politics, of society, of race and of government. We believe it is possible to have policies that advantage all sectors. We believe that the Government should govern for the good of society as a whole and not just for the benefit of a sector.

The Government should treat people as individuals and not as members of some collective sector interest group. To treat a sector of the population differently because of something we have no control over - our race - is bound to lead to racial disharmony.

A race-based approach is at the heart of the Government's policies. The size of the Maori tax-benefit gap raises important questions. What return is the country receiving from this enormous investment?

It demonstrates the paradox: you do not cure poverty by giving away taxpayers' money. As Government spending has gone up, it has not helped. Violent crime is up. Despite low unemployment the number of working-age, able-bodied adults on benefits is now around 360,000.

The relative position of Maori under the Government appears to be getting worse. Last July, there were more 18 and 19-year-old Maori on the unemployment benefit than non-Maori. (Just 19 per cent of 18 and 19-year-olds are Maori).

For the first time, in November, there were more Maori children in DPB households than European (79,173 compared to 74,233). It is a poor return on a $5 billion a year investment.

Act's finding of this tax-benefit gap raises questions regarding Government priorities. Ideally, the tax paid should equal the benefits received.

The priority should be reducing the $5 billion Maori tax-benefit gap but instead it is Treaty of Waitangi claims, the foreshore claim and the $200 million "reducing inequalities" programmes.

One year's taxpayer transfers to Maori are worth eight times the total Waitangi settlements paid to Maori to date.

Too much time and effort is going into Waitangi settlements. It is obvious, from Act's research, that claims that these settlements will give Maori an economic base to close inequalities are nonsense. If $5 billion a year has not worked, why should $600 million over four years work?

The grievance industry is absorbing too much time and effort of the leaders of Maoridom. The lesson of Act's research is to speed up and finalise the Waitangi claims.

All the above must be doubly true regarding the priority given to "reducing inequalities" spending. Government departments are required to give priority to this programme and to give special reports. Lifting annual taxpayer spending on Maori from $5 billion to $5.2 billion is not likely to make a difference.

The evidence indicates that the Government spending is not the solution, but a large part of the problem.