The purpose of Government

The Purpose of Government

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This page looks at the fundamental purpose of government. It compares Basic Income, tax changes, and changes to universal services proposals as alternative ways of improving peoples lives or wellbeing.

Basic Income, tax changes, changes to universal basic services, the universality of payments, and the equitable distribution of wealth are considered. In particular, Basic Income payments, universal services, and equitable taxation changes are considered.

This page will not consider all aspects of any political party’s policies. Anyone intending to vote in an election should  undertake their own investigations, consider other aspects and policies and make their own decisions based on their knowledge and understanding. People are asked to consider the possibility that a small tax cut for themselves may make them better off in the short term, while a loss of government services may harm them more, or may result in poverty for themselves and others. 

Basic Income and Universal Basic Services, such as free public education, free medical care, and other universal services provided by the government are complimentary, not mutually exclusive. Boosting universal services, such as providing free or subsidised dental care for adults, may give both individuals and families more financial relief than changes to taxation, and provide better targeting of resources to an area of need, boosting the overall well-being of the nation. Similarly, a Basic Income paid to all provides better targeting of government resources to those that need it the most than tax cuts that invariably provide larger cuts for the wealthy than for those on low incomes.

While tax cuts provide short-term relief to some individuals, tax cuts that are not carefully targeted toward those who need them the most, give a benefit that is often short-term term as prices quickly rise to eliminate any gains. Tax cuts always provide greater benefit to those on higher incomes, and directly reduce government income leading to a need to reduce expenditure. Cuts to government expenditure lead directly to reduced taxation revenue for governments, and calls for further expenditure cuts.

Cuts to government and universal services result in people being worse off. Cuts in government expenditure are invariably followed by general economic downturns which can negatively impact the wellbeing of most citizens. When people have less money to spend, businesses suffer and there is less money available to pay those on higher incomes. A Basic Income provides a better solution as it broadly targets benefits to those on lower incomes who need the benefits the most and ensure that everyone has at least a minimum amount of money to spend to keep the economy moving.

On this page

The following are introduced or discussed on this page. Scroll down to read or follow links to other pages.

• The purpose of government
• Government in New Zealand. 
• The economic situation in New Zealand
• Taxation
  • Goods and Services Tax (GST)
  • Wealth tax
• Universal Basic Services
  • Free dental services
  • Prescription charges
• New Zealand Superannuation
• Comparing the policies of the political parties
  • Basic Income and tax change calculator
• The policies of the political parties
  • The Opportunities Party (TOP)
  • Labour
  • Green
  • Te Pāti Māori
  • National
  • ACT
  • New Zealand First

The purpose of government

The primary purpose of government is to ensure and enhance the well-being of all a nation’s people, not some at the expense of others. To achieve this, governments will act to ensure:

• law and order, justice, and protection against harm
• protection against invasion by malevolent forces from outside the country
• good quality education and health, 
• adequate albeit a basic standard of living for all citizens and
• an equitable distribution of wealth

Many of the requirements for a government to achieve these objectives are outlined on our United Nations page.

To maximise well-being governments should ensure efficient management of government resources. This includes the management of the distribution of funds.

• The more efficient a government is when it spends money, the more it can achieve with the income it receives from taxation.
• Government efficiency is maximised, and intervention minimised when payments are made to all on an equal basis with broad targeting achieved with an appropriate tax system that ensures that those who have the most pay tax in proportion to their ability to pay.
• In contrast, narrow targeting of benefits to individuals requires a greater use of government resources, and this results in more and less efficient government. 
• New Zealand Superannuation is a good example of an efficient system. Taxable payments are made to all on an equal basis so those with the highest incomes will pay tax on the income received from New Zealand Superannuation at their highest marginal tax rate. This provides broad targeting of the payments to those most in need. Government administration costs for New Zealand Superannuation are minimal.  Money paid out is spent by those who receive it and taxes ensure the money paid out is returned to the government over a number of cycles. For more details see our New Zealand Superannuation page.
• When money is collected as taxes, those who have the most should pay more in taxes than they receive from the government in payments while those who have little should receive more from the government than they pay in taxes.
• Governments should avoid actions that transfer wealth from those who have the least to those who have the most.
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Taxation

Goods and Services Tax (GST)

Wealth tax

Universal Basic Services

Free Dental Care

Prescription charges

New Zealand Superannuation

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17 September 2025

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