Relationships first?

The British based Relationships Foundation has released a new pamphlet, estimating "the financial cost of failure" in families and relationships. Taking into account measures such as "lone parent benefits," costs in "health and social care" and "housing," as well as related social services, When Relationships Go Wrong: Counting the cost of family failure puts the cost of "relationship breakdown" at a massive 37 billion pounds. Warning against a "focus solely on economic concerns at the expense of relationships," the Foundation calls for a policy, and a culture, which prioritises relationships, and "greater wellbeing."

The massive figure, based on more detailed calculations in the pamphlet, is food for thought enough. But it is the companion pamphlet, When Relationships Go Right: Enabling thriving lives, which contains a fruitful metaphor when it comes to the debate on family. It draws a parallel between "the wellbeing agenda" and the green movement, hoping that, just as politicians and wider culture have come to prioritise the environment, so also will government and society come to prioritise relationships and "wellbeing." The pamphlet offers a number of examples of what this might look like, from the greater use of "health visitors" and "district nurses," to proposals that encourage healthy work-life balance through things such as cutting travel time.

Everyone is in favour of relationships. And few, looking at the horrendous cost of family breakdown and its ongoing effect, would argue with the proposition that we as a culture need to place the family at the heart of decision and policy making. But, as with the environment, what matters is the detail. What sorts of relationships are we talking about prioritising? What does a good relationship look like? Who is to define family? What trade-offs are we prepared to make in terms of our economy, or our standard of living, so we can spend more time with our children? How do civil society and government work together to help families without turning charities into government departments? As with the environment, it is easy to talk in generalities and as with the environment, putting the issue on the agenda is helpful and vital to a point. It is all too easy for family to take a back seat to more immediate or trendier concerns. But it is a debate on specifics we need, from all parts of the political spectrum, and across the back fence. We, like Britain, pay the toll for family breakdown, in shattered lives, and high tax bills. It is time we faced up to the hard work needed to pick up the pieces.

• Read When Relationships Go Wrong and When Relationships Go Right

When the rubber meets the road

The Electoral Finance Act made a significant impression on the 2008 general election, stifling debate and chilling political speech. This week, Parliament wiped away significant parts of the Act's regime when it passed the Electoral Amendment Bill. The Bill creates a temporary regime for election campaigns while we have a sustained debate about a more permanent replacement, removing the worst features of the Electoral Finance Act. While the Act's demise is to be welcomed, the real work of designing a fair electoral law is still ahead of us.

The Bill turns the law on election spending and advertising back to the rules that pre-dated the Electoral Finance Act, while keeping that Act's tougher rules regulating donations and penalties. Although there has been a large degree of consensus over this first stage—only the Green Party voted against the Bill—consensus may be much harder to come by at the second stage of reform.

The Government has indicated it will consult in depth on the reforms and seek public submissions on an issues paper before it drafts legislation. When legislation is introduced, further public submissions can be made through the normal parliamentary processes. Among other things, the process of consultation is likely to focus on how election advertisements should be defined, how long political speech should be regulated for, and what forms of communication should be restricted. In short, it will be asking how to balance reasonable regulation of election campaigns with the paramount importance of free political speech.

The promise of the process is "law that is grounded in broad-based political and public consensus," and ultimately "more stable constitutional arrangements." As the Green Party's Russell Norman said—ironically, speaking against the Bill—the electoral system belongs to the people. When the rubber meets the road, and the officials roll out their issues paper and their draft law, we, the people, must be ready to respond in good faith, to engage with the issues in a serious and reasoned way that rises above name-calling and conspiracy theories. Only then is the promise of the process likely to be fulfilled.

"Where to next?"

With a deepening recession hitting New Zealand, government, businesses and the wider community are considering how to minimise unemployment and improve economic growth. These challenges received special consideration recently by the tax policy community, who met to examine the question "New Zealand Tax Reform—Where to next?" at a colloquium held by Victoria University and the Treasury.

Taxes affect our decisions about doing things like buying, saving, working or investing, so the effects of tax are likely to be reflected in our overall standard of living. One of the papers presented at the conference by the OECD, Taxation and Economic Growth, took up the challenge of trying to show this by examining how tax affects economic growth. It considered "the effects of changes in tax structures on GDP per capita and its main determinants" in OECD countries. The paper looked at what could contribute to growth in the medium term as well as the long term, since any number of policies, like building more roads, will probably be growth-enhancing. However, to recover from a recession the emphasis needs to be on removing barriers to productivity, like encouraging more people into better paid work. This matters because the economy cannot recover quickly if people are stuck in low- paying, unskilled jobs instead of industries which are specialised, enhance opportunities for investment and can generate more wealth.

The paper showed that consumption taxes, like GST, were more growth-friendly than income taxes. This is because consumption taxes allow the cost of paying tax to be spread across people's lives, meaning people have more money available in the present to do things like investing or starting a business. Another positive reform suggested was flattening taxes by moving away from progressive income taxes similar to New Zealand's. This could help boost our economy as high top marginal personal income tax rates reduce productivity growth by discouraging people from earning more money.

While these policies are growth-enhancing they are not a magic recipe for growth because the circumstances of each country will vary, as will the demands for redistribution by government. In short, altering the tax structure to enhance growth will also mean thinking about what level and type of government welfare and services are really needed. Nevertheless, the implications for tax policy suggest that New Zealand may do well to consider furthering reducing personal income taxes because this is a real barrier for growth in the medium to long term, as they inhibit people from either increasing their income, choosing to invest, starting a business or moving from welfare to work.

• Read the OECD paper Taxation and Economic Growth
• Read a selection of papers from the New Zealand tax policy conference, "New Zealand Tax Reform—Where to next?"