Monday, May 22, 2017

"Old school"?

The treatment of those who questioned the behaviour of the now infamous Ministry of Transport fraudster was atrocious. Two have spoken to Radio New Zealand anonymously. This caught my eye though:

"When we raised issues sometimes we were told 'you're only here to pay the invoices and if they're signed and approved that's all you have to worry about'.
"But we were old school - and we were loyal and we were conscious of it being taxpayer money."

Which infers they were loyal to the taxpayer. Good for them.

But if they are old school, what is new school??

Wednesday, May 17, 2017

"1,300,000 fewer years on main benefits"

That's the prognosis since benefit reforms were implemented in 2012.

It's good that the ministry is actually measuring dependency in year terms. Mere numbers dependent hid too much. Reliance on the dole is, on average, much shorter-lived than reliance on the DPB (now Sole Parent Support).

From the Minister, this is hugely important:

“Almost half of children who grow up in a benefit dependent household end up on a benefit before the age of 23, which is why we’ve invested millions in providing intensive support and training as well as help with study and childcare so sole parents can go into work.

“With the number of sole parents on a benefit decreasing 32 per cent since 2012 and nearly 60,000 fewer children living in benefit dependent households than in 2011, it’s clear this investment is helping break the cycle of intergenerational welfare dependence.

In their last incumbency Labour never got close to addressing or moving on this central problem.

“Those who have been on a benefit before the age of 20 make up about 75 per cent of current liability, with teen parents having some of the highest lifetime costs of any group on welfare.

This is what I was banging on about 13-14 years ago when addressing select committees and Labour sneered, holding that the average single parent was only ever dependent for 3 and a half  years. That was factually wrong. But worse, Labour used images that would conjure up public sympathy to divert from the chronic inter-generational problem, while their supporters painted me as a beneficiary-bashing pariah.

I confess I haven't the energy or inclination to trawl through the detail of the latest actuarial report. It might exaggerate or be overly optimistic. But the crux is that the government (or THIS government) now understands the problem.

Thursday, May 11, 2017

Just another manifestation of the war on drugs

Why can't the government 1/ understand the ramifications of the war on drugs, and 2/ extrapolate them to the war on tobacco?

Simple behavioural and economic rules apply.

Criticism of Oxfam's approach to wealth inequality

The following brief article from the Acton blog is reproduced in full due to its substantial merit:

"If people of faith want to reduce global poverty, they must begin by accurately measuring the problem. But a well-publicized report on international poverty distorts the problem and promotes solutions that would leave the world’s poorest people worse off, according to two free market experts.

Every year, Oxfam releases a report on global wealth inequality to further the agenda of the World Economic Forum. This year’s entry, titled “An economy for the 99 percent,” was released with the headline: “Just 8 men own the same wealth as half the world.”

The group’s executive director, Winnie Byanyima, said, “It is obscene for so much wealth to be held in the hands of so few when one-in-10 people survive on less than $2 a day.” But Philip Booth and Ben Southwood of the Institute for Economic Affairs (IEA), based in London, point out that there are significant problems with the report.

First, its method of measuring wealth (not income) is misleading. “Those at the bottom of the net wealth distribution include, for example, recent Harvard graduates with high levels of student debt and yet huge earning potential: they are supposed to be amongst the poorest people in the world,” Booth and Southwood write. Not that long ago, that would have included the Obamas, no one’s idea of the dispossessed and powerless.

Second, the report does not take into account life’s natural fluctuations. “A lot of people in the world have little or no net wealth,” Booth and Southwood note.

People accumulate wealth over the course of their life cycle, and even the better-off in this country do not tend to accumulate significant net wealth before their 30s. So if you consider that the global median age is about 28 years, it is hardly surprising that a huge proportion of the world’s population does not own any wealth.

Their conclusions reiterate the findings of a recent report from Canada’s Fraser Institute, which details how different stages of life bring different average earnings. Assets usually increase throughout one’s working years, until they are drawn down during retirement.

Oxfam recommends that Davos attendees pursue the global redistribution of wealth. Byanyima encourages politicians to “stop obsessing with GDP” growth, and the report recommends governments “increase the amount of progressive tax.”

But crushing poverty has fallen, thanks in large part to the free market, Booth and Southwood write. “Globally, extreme poverty has fallen from 44 percent in 1980 to around 10 percent today.” One could call as the first witness Oxfam itself, which stated recently, “The growth generated by private actors has contributed to an unprecedented reduction in poverty around the world in recent decades.”

The IEA cites examples from South Korea and Kenya to India and China. In Vietnam, income per capita rose from $100 a year to $2,000 after the country took measures to liberalize its economy 31 years ago. China saw the same measure increase from $193 in 1980 to $6,807 in 2014. “This is not due to redistribution,” the authors write; “it is due to trade and the liberalisation of some markets.”

Growing global wealth produces innovative products and services that serve the world’s poorest. For instance, Frank McCoster notes at The Conservative Online that internet connectivity is transforming the way Africans access vital services like electricity.

And as French President-elect Emmanuel Macron, the former economy minister of a socialist administration, said, “We must first produce in order to be able to distribute.” The richest 0.003 percent of the world’s population, those with a net worth of at least $240 million, donates $25 million to charity during his life.

People of faith who care about feeding the world should embrace policies that stimulate the growth of wealth, the structures that allow flourishing in the developing world, and the religious and philanthropic worldviews that encourage us to become our brother’s keeper.

You can read Booth and Southwood’s article in the Spring 2017 issue of the IEA’s Economic Affairs."

Tuesday, May 09, 2017

A flat white each day?

Bracket creep amounts to the equivalent of "a flat white each day". This trivialises the fact that the government is taking more tax from individuals in the latest financial year than the previous.

David Seymour expresses it better when saying that New Zealanders have just lost another week's work to the government.

But the increase also tends to overshadow that you are working for the government until May 8. MAY 8. Not March or April. MAY.

Mainstream coverage in Wellington amounts to a small snippet in the business pages. No wonder National gives the issue of over-taxation no priority.

Monday, May 08, 2017

What giving up looks like

A meeting was held in South Auckland last night. The dangers being experienced by dairy and bottle shop owners was the subject addressed by several MPs. However some attendees were unconvinced:

"Nothing is going to happen, they have come here to complete the formalities and wipe our tears," liquor store owner Narinder Singla said.
"I don't have any faith that they'll be doing something."
Last Friday, Mr Singla was left traumatised after two men entered his liquor store wielding screw drivers and stole money, cigarettes and alcohol.

This may be a mere matter of opinion but then again, Mr Singla might have been looking at the latest Public Service targets:

Friday, May 05, 2017


Feeling  admiration and respect for Prince Phillip as he stands down from public life, a twinge of nostalgia for his generation touched me. He's only slightly older than both of my living parents.

I wonder, do I share more values and attitudes with their generation or my adult offspring?

Tough question.

(Or, is characterization of distinct generations just another collectivist denial of inherent individualism?)

Tuesday, May 02, 2017

A 65 year-old woman will live quarter of life on Super

The qualifying age for Super has to rise.

Latest data from Statistics NZ show:

In 2014, 650,000 people were aged 65 and over in New Zealand. That’s about 14 percent of our population. This number is projected to more than double by 2039, to 1,286,000 people, almost one-quarter of the population (Stats NZ, 2014).
People are also living for longer. In 2012–14, a 65-year-old woman could expect to live another 21.3 years, and a man for another 18.9 years. This is up 6.5 years for women and 6.1 years for men since 1950–52, when they could expect to live another 14.8 years and 12.8 years, respectively (Stats NZ, 2015).
(Notwithstanding any individual savings scheme would be preferable to taxpayer-funded pensions.)

Monday, May 01, 2017

"Control is the purpose of the dole system"

Jacob Hornberger asks an interesting question: what happened to all the Vietnam war protesters?