Wednesday, August 09, 2006

Media Release
WHY THE GAP HAS WIDENED
Wednesday, August 9, 2006

One of the 20 year comparisons from the Ministry of Social Development Social Report 2006 found a widening gap between the "rich" and the "poor".

Welfare commentator Lindsay Mitchell says, "A major reason for the growing percentage of people experiencing hardship is the growth in benefit numbers."

"Twenty years ago 136,485 people were on one of the main benefits - unemployment, invalid, sickness or domestic purposes."

"At June this year the number had grown to 263,814 or 93 percent."

"To put that into context, over the same period the population increased by 25 percent."

"As Maori and Pacific people are over-represented amongst beneficiaries they are disproportionately experiencing hardship."

"There are also over 200,000 children relying on welfare."

"Until the incentives are changed and we stop encouraging people to have and add to their families on welfare, expect inequality to grow."

4 comments:

Peter McK said...

i struggle to get a good definition of poverty - and who actually lives in "poverty".

am i poor because we do not have a plasma TV, Ipod, computer, cell phone.

or i am poor because my kids dress from the warehouse, share a room, don't eat takeaways,

With the welfare benefit system i am not sure if there is any excuse for children not to eat plain - but wholesome meals, get dressed at from the warehouse, have a 21 inch tv and put on a jersey when it gets cold. There are many people who live on benefits but can provide the basics of life - food (from market and pak'n'save), shelter (rented accommodation - probably HNZ), can educate their children (state education)

they need not to spend 1 cent on pokies, lotto, drinking, smoking, and hire purchase (at 20% + finance charges)

One of the facts is that the rich cannot help but get richer - if I have a home worth $200,000 then next year my home may be worth $215,000. making $15 k(7.5%) for doing nothing. If i have not purchased any asset (note - cars are not assets) and only have modest savings then i cannot expect to grow that asset base. likewise a millionaire with say $10m od assets will next year be worth $10.75m - growing his worth by $750k.

it comes down to establishing and being focused on growing your assets - working hard - saving, and being disciplined -

the people who grow their assets use their talents and energy to make more money in spite of the socialist government.

the people who think it should all be handed to them on a platter will never get out of first gear, but will knock the tall poppy while wanting to suckle at the tit they so called rich provide while not taking any responsibility for their own lives.

backin15 said...

Your argument appears to be that the gap has widened becuase it has widened? Perhaps you might want to distinguish between cause and effect?

Brian Smaller said...

backin15 - for many who are poor there is a lack of ambition to be better today than they were yesterday. I know enough of them. That includes finance, education, hobby activities etc. Other's I know who had bugger all, have made themselves good lives. I believe it is mostly about attitude.

backin15 said...

Brian, I grew up in South Auckland and attended a school that was the poorest of the poor; we can all claim inside knowledge but that's not the point at issue here. Either way, suggesting that people in poverty are demotivated is pretty limited; there's a wealth of very good quality literature that correlates poverty, and particularly poor housing, with lower than average skills, labour market participation, health and so on and so on... these things tend to become mutually reinforcing and trap people in poverty - Lindsay's solution; cut eligibility to benefits (a kind of 1950s approach).

This particular post/media release is little more than a circular argument; the gap between the rich and the poor is widening because more people are on benefits... which is cause, which is effect?

Probably there isn't nearly the causative relationship that Lindsay imagines but as usual, the post merely alludes to a point without actually making one.