Saturday, February 06, 2016

ACT Conference 2016

I've agreed to speak at the next ACT Party conference two weeks today. I'll cover what's been happening in welfare - the good and the bad - and  what further reform could look like.

Here's a list of speakers, all of whom I am keen to hear.

Further details

Friday, February 05, 2016

Growth in psych conditions in the welfare system

Here's a tidy illustration of a phenomenon I occasionally blog about; the growing incidence of benefit dependence due to psychiatric or psychological conditions.

The blue line is the old sickness benefit; the green line, the invalid benefit.

The total number at June 2015 was 53,611.

At March 1999 the total was 24,194.

A 121% increase compared to a total population increase of around 21%.

More sickness? More diagnosis? Whatever the driver, it's actually a problem for the Ministry of Health to address yet its MSD that bears the budgetary implications.

Thursday, February 04, 2016

The sky is falling ... not

Just reflecting on the back of yesterday's post, it must cause just a little bit of discomfit for politicians when they get it so wrong. No? I guess that if it did, they wouldn't be in the game.

November 2015

"New Zealand’s unemployment rate is now worse than Australia’s – an economy described as ‘fast becoming a basket case’, Labour Finance spokesperson Grant Robertson says.

“Last night Australia’s new figures put unemployment at 5.9 per cent. New Zealand’s is 6 per cent.

“Australia’s economy has been going through extremely difficult times of late. It has been a rapid downturn for a once-thriving economy.

“New Zealand has experienced a sustained period of economic growth that is now falling away. We should be doing much better than Australia. There is no way our unemployment rate should be higher than the across the Tasman.

“John Key and Bill English always blame overseas economic factors and turbulent times. But the GFC is over and other countries are doing much better. Britain, Australia and the US all have unemployment levels below 6 per cent and falling. New Zealand’s is forecast to top 7 per cent.share on twitter

“The stark truth is National hasn’t been able to turn growth into jobs. Now the economy is going downhill opportunities will be even harder to come by, even for those with jobs.

“This isn’t the Kiwi dream. It’s getting harder and harder to get into work or find a better job. Behind these figures are real people with families to support and ambitions to fulfil.

“National is failing them,” Grant Robertson said.

And just for good measure here he is talking to the Labour Party conference:

"151,000 New Zealanders are out of work, and the rate of unemployment is six per cent, with projections that it will head towards seven per cent next year. 151,000 people.  Think about that.  It is nearly twice the population of this city out of work.  It is nearly 50,000 more than when National took office.  In Gisborne one in every ten people is out of work. It is clear that John Key and Bill English see levels of unemployment like this as collateral damage in their blinkered economic vision."

Wednesday, February 03, 2016

Good fall in unemployment rate

Statistics NZ is reporting the unemployment rate has dropped to 5.3%.

It was 6 percent in the September 2015 quarter.

This is the lowest unemployment rate since March 2009.

A quick round-up from tables:

Female unemployment dropped more than male

Big fall for the 20-24 age group but small rise for 15-19

Drops for all ethnicities especially Pacific falling from 13.1 to 9.7%

Big fall in Northland from 8.2 to 6.2%

Only region showing an increase - 4.2 to 4.5% - is Otago

Ag, forestry and fishing recorded biggest employment increase in terms of numbers, followed very closely by construction

Internationally NZ moves from ranking 15th to 10th= in OECD

Bad news for Labour.

Unemployment has been considered one of National's few points of vulnerability.

Inter generational benefit receipt

These pie graphs show the percentage of beneficiaries aged 16-17 who had a parent(s) who were also on welfare.

For instance 56% of Maori beneficiaries aged 16-17 had been reliant on their parent's benefit for more than 80 percent of their teenage years.

For the large majority of all clients they had a parent  who had spent time receiving welfare.

Conversely only 7% had no match to parental receipt.

I suppose the left would call this the transmission of disadvantage.  It is also the transmission of values and expectations.

(Caution: I expect that in among this group will be young people with physical and intellectual disabilities whose parent has been receiving a benefit to provide care for them. These young people make up 23% of the total.)


Tuesday, February 02, 2016

Ex Aussie prisoners emulate NZ criminals

Front page headline in DomPost reads,

Third of crims sent home now reoffending

30 percent to be precise. That's entirely predictable.

Pretty much on the rate for those released from NZ prisons. Australian prisons do no better at rehabilitation it would seem.

Additionally, the police say they expect the re-offending rates to "soar".

That, unfortunately, is what recidivism rates do.

It's not until the last sentence of the report that we learn,

"[Amy] Adams said the latest police figures were in line with New Zealand prisoner's general offending rates."

I guess it is easier to get people outraged about the ex-Aussies than our homegrown variety.

(If you wonder why I not infrequently blog about the prison population it's because of the strong correlation with welfare. As described in the latest Taylor Fry report:

"Offenders who have been convicted of a crime and served some type of criminal sentence are heavily over-represented in the welfare population.
· About a quarter of the 2014/15 beneficiary population have had a criminal conviction in their past; for males it is 4 in 10.
One in ten welfare clients has been to prison and one in ten has been convicted of a violence-related crime.
· There is a strong statistical relationship between clients who have been convicted and served a
sentence and long-term benefit receipt.")

Sunday, January 31, 2016

Stark example of forced minimum wage hikes

The closure of many Wal-mart stores (with the re-establishment of new ones simultaneously) seems to provide very practical evidence of what happens when minimum wages are legislated too high.

Where the minimum wage was raised to $12.55 in Oakland, California the store closed. In the nearby city of San Leandro the minimum wage is $10 and the stores stayed open.

The difference between these three locations is the Oakland Wal-Mart has over a 25 percent difference in labor costs for entry-level employees than the San Leandro locations, says Mark Perry, an American Enterprise Institute scholar and professor of economics and finance at the University of Michigan’s Flint campus.
“Given the reality that Wal-Mart operates on razor-thin profit margins (only 2.8 percent last quarter), a 25 percent difference in labor costs for entry-level workers can be the difference between a store that turns a profit and a store that barely breaks even, or loses money,” Perry wrote.
A research fellow from the Heritage Foundation observes:

 “The true minimum wage is $0.00 an hour, Companies do not have to hire workers, and they will not pay them more than the value they create.”
That's the reality of the private sector.

Hence the movement for higher minimum or  living wages has now focused on the public sector where  economic facts take a back seat to forced wealth redistribution ideology.

Wednesday, January 27, 2016

Why is NZ more corrupt?

Radio NZ is reporting:

New Zealand has slipped again, to fourth, in the latest anti-corruption global rankings.

NZ was 1st in 2012 and 2013; 2nd 2014 and now fourth. But no explanation of why is provided.

Maybe NZ stayed the same and Denmark, Sweden and Finland improved?

Here's the site that rates the countries for corruption.

NZ's conglomerate score suffers from a lower ranking in "Rule of Law" measured by another organisation. Here NZ is only 6th of 68 countries.

Additionally, a poorer score from "Sustainable Government Indicators", arising largely from a low ranking on environmental policy it would appear, has added to NZ's drop.

Water management and use and greenhouse-gas emissions have been a focus of policies in recent years. Deforestation has been addressed with an effective permit system. Critics say the government has failed to resist agricultural-industry pressure, but all recent governments have been active in protecting biodiversity.
While New Zealand withdrew from its original commitments under the Kyoto protocol, it is working toward its own independent emissions-reduction goal.
There you go. That's what has contributed to us becoming more corrupt.

Tuesday, January 26, 2016

Work vs Benefit - Time for a reality check

The NZ Herald asked for a brief op-ed (200 words) responding to the suggestion that going off welfare isn't providing better incomes. I abridged and added to yesterday's post:

A Blenheim single mother of three finds she is only $34 better off working. She says, "When you weigh it up, is it worth going to work? The Government is trying to get everyone off the benefit but there is no incentive to work."

The incentive lies in being self-supporting, in joining the workforce that creates the productivity and taxes to pay for, among other things, benefits for those who genuinely can't support themselves.

"There is that stigma attached to being on the benefit and many believe that you are just a bludger," she adds. Only if you can work and refuse to.

In any case, she goes on to answer her own question: "I love my job. It makes me feel rewarded."

Time for a reality check. Because of the accommodation supplement and family tax credits, the gap between benefit income and income from work is very small (and will get smaller from April this year when parents with dependent children get a $25 benefit rise).

Moving into work may provide little financial gain initially. But the individual's sense of well-being and future prospects are improved.

In this instance the ex-beneficiary has already identified that. Good for her.

Here is the opposing view from a beneficiary advocate :

There is a large percentage of my clients who approach our service and ask us to look at the viability of returning to work -- single parents who are committed to getting off benefit and excited about the prospect of returning to work.

When we break down the in-work tax credit, the childcare subsidy, accommodation supplement and temporary additional support, it is not uncommon that the working single parent ends up with under $50 a week more in their hand.

We then look at transport, parking, appropriate clothing etc. for work. Work and Income will assist with a percentage of this cost, however, not the total cost, which then gets taken off the $50.

Then, school holiday programmes need to be paid for along with childcare, which is subsidised, and the $50 in hand is reduced further.

Given this, most of our clients still opt to return to paid work because we can see the benefits of work experience which may lead to better work opportunities. However, this does not provide a living wage and the extra expense of working does not often make this a sound financial choice.

What can be done? The in-work tax credit for low-income earners needs to be increased, childcare needs to be free for low-income earners, including after-school care and holiday programmes, the living wage needs to be adopted by employers and the Government.

The benefit is not a lifestyle choice, but when the income paid to working families is equivalent, we need to have a close look at incomes, rather than increasing subsidies.

I notice the second op-ed well exceeds 200 words.There is something symbolic about that but I can't quite put my finger on what it is.