Ian Ritchie (15 June):
I have heard a whisper that IRD is investigating the Community Wage from the perspective that it is a wage, should be taxed, ACC'd etc. This would have major implications. Do you know anything about this or can you find out? I, and many others would be most grateful.

Keith Rankin (17 June):
Inasmuch as the Community Wage is another name for the Unemployment Benefit, it will be income taxed in exactly the same way as the UB, which is a taxable benefit but generally quoted net.

Ian Ritchie (17 June):
But if it is a wage, it will be ACC'd, employment related legislation will apply, the issue of who is the employer arises, the employer handles the IRD/ACC payments etc. There is already an issue of safety and health, I can't remember the name of the act, but the issue of the employer is a live and significant one - for hazard etc responsibility it will be the agency the worker is with. I doubt if that is widely known.

Keith Rankin (17 June):
I think it's too easy to get transfixed by the use of the term wage as a payment from an employer. The more general use is that "wage" is any kind of factor payment; thus we can have wages of labour, wages of capital (ie profit), and the social wage.
   The community wage is not a labour wage. It's a conditional benefit; a part of the social wage.
   The UB has a notional employer, the Government. So, in the wider sense, the employer is the funder. From an accounting point of view, the CW remains identical to the UB. I can see no reason why ACC should be involved, just because we call a benefit a wage. Also, we really need to understand the fine print of the community wage, which is that people "may" be required to accept community work. In practice, most people on the community wage will be community self-employed, as they are now.
   I guess those who are doing community work under the auspices of the CW will be doing it through community organisations under contract to the government. Whatever, the true "employer" is the funder, and any compulsory charges would have to be borne by the funder. If the Govt. wants community cooperatives to pay ACC levies, then the government must give them that money.
   Of course, once we move to a social wage accounting system, then the concept of a taxed wage becomes meaningless, as all wages are post-tax, or, in the case of the social wage, a distribution of revenue collected via taxation.
   Well, that's the way I see it.

Ian Ritchie (18 June):
Thanks for that. The government at present is speaking with a forked tongue re the CW. It is saying that the community group is not an employer, and the beneficiary is not a worker, but also that the Community Group etc is responsible under the Health and Safety in Employment Act for OSH and related issues and that the Department is not the employer either. Also that they are covered by ACC, whatever that means and involves.

Keith Rankin:
Yes, there is a lack of conceptual clarity within government (and non-government) circles about the difference between social wage incomes and labour wage incomes. The "speaking with a forked tongue" is more the fault of the economics profession than the government. At least in Aotearoa and Australia, where the term "social wage" is widely used and includes social welfare benefits, the opportunity is there for a conceptual breakthrough to take place.

Ian Ritchie (18 June):
In this morning's paper (Press, p 2 and Dominion) from hearings of a select committee, following questioning from Steve Maharey, community groups will have the same responsibilities as any "employers" with regard to occupational safety and health issues under the Health and Safety in Employment Act.

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