Willis on targeting vs universality

The Herald reports:

She said the current system was problematic in that many entitlements were claimed by wealthy people and paid for by hiking taxes on workers of all income levels.

“There are a lot of entitlements and support that have crept into the middle and upper class, and I would prefer to have a system where we don’t keep hiking tax rates in order to give people’s money back to them in the form of different entitlements,” Willis said.

She noted that her own family would have been eligible for thousands of dollars of Best Start payments, a $73 a week payment to all parents with children under 1 (the payment is means tested for families of children aged 1 to 3), which was introduced by Labour in 2018 (Willis’ children were born prior to the payment coming into force).

“Is that really necessary when there’s a two-income household?” Willis said.

She said some entitlements were “mission critical”.

These included “having a social safety net with welfare support available for people in times of unemployment, for people who are disabled, that is really, really important in our community”.

However, she said “continuing to add to the layer cake and entitlements at the expense of creating very high tax rates is not the path I want us going down”.

I’m in favour of almost all welfare payments being targeted at low to middle income households, rather than being universal. This includes NZ Super, winter energy payments, early childhood subsidies and the like. The only time a payment should be universal is when the cost of targeting it would be too high a proportion of the revenue saved.