The state and income redistribution: a study of the social wage and taxation in New Zealand 1949-1975
Degree GrantorUniversity of Canterbury
Degree NameMaster of Arts
This thesis examines the role of the state in redistributing income between social classes in New Zealand during the years 1949-1975. It applies an innovative methodology, developed by E. Ahmet Tonak, to a set of data drawn from New Zealand's national accounts and estimates a quantity labelled 'net-tax', defined as the taxes that the working class cede to the state less the expenditure that the working class receives from the state in the form of a social wage. A detailed theoretical discussion precedes the empirical analysis. Insofar as Tonak's method requires that the social wage (the portion of state expenditure consumed by the working class) be identified as an empirical quantity, the argument that all taxes, and hence all state expenditures, originate from surplus value is confronted. The views of the main representatives of this contemporary school of thought are subjected to detailed scrutiny. They are rejected in favour of the views of a school which considers the portion of taxes funding the state expenditure that constitutes the social wage to originate in 'wages'. A model which theoretically 'grounds' the comparison of taxes paid to state expenditure received, effected in the remaining chapters of this study, is then formulated. In the empirical analysis, the empirical referent of the 'net-tax' concept is calculated for the years 1949-1975. The net-tax data set is then used to construct a transference ratio, which indicates the degree and direction of income redistribution effected by the state. The main finding to emerge is that, in all but one of the twenty-seven years surveyed in this study, the working class has surrendered more wealth in taxes to the state than it has received back from the state as a social wage. In light of these results, it can be concluded that the welfare state has not materially benefitted the working class in New Zealand. Moreover, insofar as income has consistently been redistributed from the working class to 'non-labour' (the capitalist class and the state itself), the state can be considered to owe the working class a debt in the amount of 3671.26 million (constant 1975) dollars.