4 Aug 2019

Money, housing, and taxes key to reducing wealth gap - youth MPs

From The House , 7:30 am on 4 August 2019

Housing, wages, regulatory systems, and tax brackets are key to reducing the wealth gap says a Youth Parliament select committee. 

Youth MPs Shine Wu (left) and Lily Lewis (right) brief the Economic Development, Science and Innovation Select Committee on their report from Youth Parliament 2019.

Youth MPs Shine Wu (left) and Lily Lewis (right) brief the Economic Development, Science and Innovation Select Committee on their report from Youth Parliament 2019. Photo: VNP / Phil Smith

Ten youth select committees were set up for this year’s Youth Parliament and each one picked a line of inquiry to investigate. 

Youth Parliament is held every three years with the aim of promoting civic engagement amongst rangatahi.

The Youth Economic Development, Science and Innovation Select Committee chose to look at 'how economic growth can be maintained while reducing the wealth gap'.

It heard from submitters and wrote a report with recommendations. Some of the Youth Committee members appeared in front of the actual Economic Development Committee to discuss the report.

"What we figured out was that New Zealand has been experiencing city economic growth since 2012," said Youth MP Shine Wu. 

"In terms of the wealth gap, that increased rapidly during the 1980s, it stabilised in the mid-1990s and it has remained approximately constant since then."

The Youth committee made several recommendations to close the gap including increasing housing supply. 

Youth MP Lily Lewis said housing is expensive for owners and renters and said examining barriers in legislation to building homes will help solve the issue. 

"Obviously in the wake of Ihumātao, we have to be careful abut where we build but we recommend that removing barriers is only done where appropriate."

Lewis also said the government should accelerate its investment in social housing. 

"In the short term to alleviate stress on major cities where the housing crisis is so prevalent, our recommendation is the government implement policies to encourage people to move to the regions where housing is not so much of an issue."

Lewis said this would be  a "short-term fix" as people with medicine, construction, and labour skills are needed in the major centres. 

The Youth Committee also recommended a review of regulatory systems.

"Ownership rules and regulations which prevent overseas investors and local entrepreneurs from opening businesses in New Zealand prevent competition which results ultimately in higher prices," Wu said.

"We think that's fairly regressive and it entrenches inequalities because it increases the cost of living which affects poorer people more."

Wu said the Youth Committee was concerned that some of New Zealand's regulatory systems are no longer fit for purpose and it recommends a review of major regulatory frameworks such as the Overseas Investment Act "to ensure that they remain relevant and do not unnecessarily stymie economic growth or reduce consumer choice".

The Youth Committee also recommended the government only contract or engage with employers who pay a living wage (currently $20.15 per hour) and also look at requiring large businesses to pay a living wage. 

It also recommended adjusting tax brackets especially for those earning at the lower end. The full report from the Youth Committee can be read here.