Sunday, January 22, 2017

Progress painstakingly slow

Latest benefit statistics show painstakingly slow progress on raw numbers.

(Note the first MSD chart is mislabeled and should read "to December 2016")

But a few other aspects can be considered.

"The majority (70.4 percent) of main benefit recipients had been receiving a benefit continuously for more than one year."

This proportion has been constant since at least 2010. Bearing in mind that in December there are more temporary beneficiaries, during the rest of the year the percent who have been continuously dependent for more than a year increases to around 73%.

How have other characteristics changed?

You would hope that the beneficiary population would be ageing as proof the reforms to discourage young people from becoming dependent early are working.

I've compared December 2007 to December 2016:

Further analysis of the 18-24 year-old group is required to make sound conclusions but on the face of it, not a great result. And while there are probably slightly fewer Maori beneficiaries, their disproportionality has worsened. The lower ratio of female dependence is largely a result of the fall in sole parents on a benefit.

As an electoral issue welfare seems to have faded away. I'm not sure why. It's still a huge concern to have one in ten people unable to support themselves, for whatever reason.The focus certainly seems to have shifted more towards the 700,000 plus people who are supported by the taxpayer by dint of age. I don't want to have an argument about Super and entitlement etc. but the economic future implications cannot continue to be ignored.

To keep an issue in the limelight  strong opposition activity is required. Labour and the Greens can only complain that the government is being too hard on beneficiaries and I don't think that is gaining any traction. They can't attack them on performance unless they can promise to do better. And they don't have any good ideas about how.

Wednesday, January 18, 2017

Mobile phone offending overtakes alcohol offending

Many interpretations could be read into the following statistics. For offences to be recorded they have to be discovered for starters. Police are constantly complaining about under-resourcing (aided and abetted by the opposition) yet they manage to find plenty of staff to man alcohol check points. On a recent road trip across Victoria and NSW the lack of police on the roads was most noticeable when compared to NZ. In a week we saw two police cars (though noted large numbers of police stations). 

My husband was stopped yet again driving home from work last night at an alcohol check point. He asked the officer if they had caught anyone over the limit. The reply was," No. But we've caught people close to it." Husband noted that you cannot "catch" people who haven't broken the law but I think it went over said officer's head.

Anyway, what can be inferred from the statistics below is that banning the use of cellphones while driving has failed. Alcohol offending was on the decline but with the lowering of the limit the trend has reversed. You have to ask the question, with the downward trend what was the rationale for lowering the limit anyway?

And which is more dangerous? Drinking and driving, or talking/texting and driving? The first seems to attract a great deal more societal disapproval but perhaps that's an illogical attitude. Perhaps the use of cell phones while driving is not particularly frowned upon because so many people do it. In which case, what use is a law that is routinely flouted? The revenue is handy though.


Tuesday, January 17, 2017

One child every 45 minutes

That's roughly how often a child is born onto welfare in New Zealand. According to Statistics NZ a child is born every 9 minutes. According to me every fifth child born will rely on a benefit, if not directly, shortly after their arrival.

If you doubt my statistics, refer to MSD's from earlier years:

At September 2016 there were 179,732 children reliant on a main benefit - slightly up on the June and March quarters but down on Dec 2015. This represents 15.3% of all children (aged 0-18) but in the 0-4 age group, the figure rises to 19.3%.

Sixty nine percent rely on Sole Parent Support (though this is an under count of the extent of sole parent dependence given thousands more receive jobseeker, emergency maintenance, supported living and youth benefits.) Most children reliant on a benefit appear in the child poverty statistics (though not all). Therefore, the main driver of child poverty and hardship is sole parenthood.

(Hat-tip to whoever submitted the OIA request from which the last graph stats are sourced)

If I was a conspiracy theorist...

... I 'd be suspicious of the following error made by the Ministry of Social Development.

The Ministry now publishes OIA responses. I was browsing through the topics and initially ignored these two:

Bryan Petter is unknown to me and I assumed the request concerned some personal matter.

Later, curiosity got the better of me and I took a look.

In fact, Bryan Petter is actually Bryan Perry, MSD's producer of the Household Incomes Report, the chief source of poverty and hardship statistics.

There is no way that the error is a mere typo. An extra letter has been added.

Then again, there is little point in trying to hide a release of documents that have been heavily redacted anyway.

Still, the matter leaves me curious ...

Monday, January 16, 2017

Is the hysteria about inequality overblown?

Oxfam are releasing a report this afternoon belly-aching about the disproportionate amount of wealth owned by the richest New Zealanders. Andrew Little is already on the band-wagon blaming National.

While 'wealth' and 'incomes' are not an exact match, in the interests of balance:

For those who like to look at the bigger picture the accompanying text is interesting:

The long-run perspective in Figure J.7 can tell more than one story.  Taking the end of the “great compression” (1950 to 1980) as the starting point, the conclusion is that for the five English-speaking countries in the graph, inequality (understood as the share of income received by the top 1%) increased strongly to 2011. With the 1920s as the starting point, the “great compression” can be seen as the “aberration” and now the distribution has returned to where it was ninety years ago.


Friday, January 13, 2017

The negative effect of welfare on children's outcomes

Unfortunately time does not permit me to add much commentary but you can go to the link below the graph for more detailed information. Essentially when tracking the progress of children born in 1993 the lines clearly demonstrate the negative influence of welfare on future outcomes:

(left click to enlarge)

Extracted from

NZ Herald coverage of report here

Thursday, January 12, 2017

Quote of the Day

Poverty in a society is overcome by productivity, and in no other way. There is no political alchemy which can transmute diminished production into increased consumption.

– John Chamberlain

(hat-tip FFF)

Wednesday, January 11, 2017

The Left's intransigence over tax cuts

Just home from an Australian sojourn  (during which I managed to read an entire book, a particularly dark Colleen McCullough book), here's an op-ed  from Gordon Campbell you might wish to comment on:

Ever since the world fell prey to the mullahs of the free market in the 1980s, no amount of real world evidence has managed dispel one key tenet of their economic faith. Namely, the idea that if you cut income taxes and taxes on small business, a wave of individual enterprise and entrepreneurial energy will thus be unleashed, profits will rise and – hey bingo! – the tax cuts will soon be paying for themselves via all that extra economic activity that this virtuous cycle will have set in train.
My off the cuff response:

Tax cuts are never significant because state-spending won't allow it.

Insignificant tax cuts will not stimulate entrepreneurship.

Typical governments are in the business of balancing budgets. REAL tax cuts are rare in the developed world.

What I do believe is that the Laffer Curve is real. You can only squeeze a lemon so much.

New blog

Mark Hubbard has started a new blog about art, films and books which looks promising. The art selection so far has introduced me to unfamiliar but attractive paintings. About to add to my blog roll.