Spinoff claims that farmers are not ATMs for the ‘useless’ after all


For the record, I really can’t stand The Spinoff. There is no nastier, more biased leftist rag anywhere. So, while I normally avoid it like the plague, I wish to respond to their latest piece of leftist propaganda, which is in reply to Federated Farmers Marlborough President Phillip Neal’s claim that farmers are becoming ‘ATMs to the useless’. By this, he meant, of course, that the TWG’s proposed tax changes would hurt farmers in particular, and that some of this money would go towards maintaining those who choose to live on benefits.

The Spinoff then published an opinion piece by a supposed ‘tax expert’, but unfortunately they chose an academic with a clear leftist agenda. Lisa Marriott, of Victoria University of Wellington, set about disproving that farmers would be badly hit by the proposed changes… by demonstrating how much tax the agricultural industry paid 2 years ago…

Sorry? Am I missing something here? quote.

In 2016-17, the government collected $75.6 billion in tax revenue, while the agriculture sector paid $758 million in tax. This is a large sum, but not a large proportion of tax collected. It equates to the agricultural sector contributing 1% of tax revenue in the period. If we isolate dairying from the broader industry, its contribution is 0.33% ? one-third of 1%.

end quote.

So… to disprove Phillip Neal’s claim that farmers will be badly affected by tax changes coming in 2021, she quotes the amounts of tax paid by farmers in the 2017 tax year? There was no CGT payable in that year, and the other raft of proposed agricultural taxes, (on emissions and fertilisers, for example), did not apply then either. I think we have a mismatch of data in this argument. In fact, the information she so carefully sought is completely irrelevant to Phillip Neal’s claim. quote.

The second point worth challenging is that a large proportion of taxes collected go on spending for welfare beneficiaries.  To be precise, expenditure on the Jobseekers Support benefit in 2016-17 was $1.7 billion (2.2% of total expenditure), on the Supported Living Payment $1.5 billion (2% of total expenditure) and on Sole Parent Support $1.2 billion (1.5%). I?m not sure which of these groups Neal feels contain the ?useless? people the government should not support. end quote.

Her inability to control her sarcasm destroys her narrative. $4.4 billion was spent on welfare payments to able-bodied people in the 2017 financial year. However, the number of people on Jobseeker Support has increased since the new government came into office, in spite of the fact that there are job vacancies in many industries, agriculture being one of them.

Phillip Neal’s comments may well have been expressed out of frustration with the inability to find farm workers, with locals who would rather collect the dole than do a hard days work. If that is his experience, his comments are understandable. Again, she is trying to compare past figures with future numbers, where a whole raft of proposed taxes do not apply to the past years. quote.

The final point worth highlighting is Neal?s claim that lots of people abuse the system. Yes, there are people who do not comply with the rules relating to beneficiary entitlement. There are also people who do not comply with the tax rules. The value lost to society from abuse of the tax system is around 50 times higher than the value lost from abuse of the welfare system. Neal would have a stronger argument if his distaste was directed at non-compliant taxpayers rather than beneficiaries.

The Spinoff end quote.

The last sentence is garbage. Both tax evasion and benefit fraud are crimes, punishable by fines or imprisonment. She is saying that benefit fraud is not as bad a crime as tax evasion, just because one set of numbers is bigger than the other.

Anyway, Phillip Neal was right. There are people, some very high profile people, who commit benefit fraud. Just because more people commit tax evasion does not make his statement untrue. Her arguments fall apart because she is unable to keep a balanced view of the issues at hand.

What Phillip Neal was trying to say was that farmers are being unfairly targeted by the TWG’s tax proposals, and they are likely to be implemented by a government that is loosening the rules around collecting benefits. As a result, there are more beneficiaries than 2 years ago already, and the number is likely to increase. Some of the extra tax take, if the proposals are implemented, will go towards paying the extra benefits. I really don’t see how pulling out the statistics for the 2017 year disproves his argument in any way.