Tuesday, March 02, 2010

Rack up another $240 M

Today the annual rise to benefits and Super is announced. The increase is 2 percent for most and 2.3 percent for Superannuitants. The net cost will be around $240 million.

I don't have a fundamental problem with benefits and super being adjusted for cost of living but it is easy to see why the total social security bill continues to grow and some. It is also of no comfort to people who have had their hours cut, weeks shortened, or businesses dry up to observe the relative security of those receiving their income from the state.

12 comments:

Anonymous said...

When a government has the power to continually increase spending regardless of conditions,then it just shows stuffed the "system" is. It doesn't reflect the true way that the world works. Business must take on board the chance of profit and the risk of loss.

Having to borrow $250mil a week the government should be reducing benefits and super by 5%. That is the risk of recieving state money in dificult times.

JCUKNZ's blog said...

Personally I would not unduely object to my superannuation being reduced since I saved during my working life. However for many the existing Super is barely enough to get by on. Whereas those of the age to be in the workforce can try for extra income to meet the shortfall. In any case it makes sense to keep the country going, more so than the current government is doing, so that the ecconomy recovers faster and generates taxation to repay the loans. During the American depression Roosevelt unfortunately took the advice of the right wing 'experts' around the mid '30's and stimied recovery and it was only World War II which led to her recovery. The same thing happened more recently in Japan. The conventional rightwing ecconomists simply don't seem to learn despite these telling examples of their folly.

Anonymous said...


I don't have a fundamental problem with benefits and super being adjusted for cost of living


Why ever not? NZ needs to eliminate welfare - a slow (but effective) way to do this would to be simply cap benefits in nominal terms and let inflation deal with the rest.

Even Do-Nothing Key has this as the official government policy for all state agencies - including health & education. Why should bludgers & codgers get of scott free?

Anonymous said...

The conventional rightwing ecconomists simply don't seem to learn despite these telling examples of their folly.

In fact it is the other way around - it is conclusively proven that Roosevelt's massive govt welfare programme ensured that the US stayed in recession much longer than most European countries before WW2.

Remember that NZ has been in depression already for 4 years, a depression caused (and masked) by the massive spend-up of the Clark/Cullen years and then massive borrowing - $240 every week - of Key/English.

Frankly sooner or later the govt will just have to terminate all benefits including super. Yes hundreds of thousands will have to depend on their families or starve. But the good news is: after that day, no-one in NZ will ever believe the government can provide for them ever again - and that realisation will change NZ for ever.
Sure things will be bad for people who aren't prepared, who haven't saved, who are depending on welfare (and super is just dole for codgers).

But this is the only way NZ could even start to approach Australia's performance, and it is surely worth the social costs!

Anonymous said...

"In any case it makes sense to keep the country going, more so than the current government is doing, so that the ecconomy recovers faster and generates taxation to repay the loans."

You might be happy to borrow $50 per week for every man woman and child to "keep the country going" because I suspect you won't be around to ever pay it back but some of us would rather that the country learnt to live within its means. Slashing a couple of billion off govt spending would be a good place to start.

If some people can't accept a lower standard of living through lower handouts or reduced services they are free to go somewhere else. Plenty of people will still want to come here to replace them.

You talk about recovery but that requires growth. The reality is that western countries are running out of ways to grow. That was last centuries solution as you rightly pointed out.
Getting rid of big government is our best chance this century.

Anonymous said...

Its all about votes.

The aged and infirm control the hearts and minds of the politicians.

Dirk

Anonymous said...

Most of it will go straight back. Tax and GST. Still I object to the increase because those of us self employed or working for the self employed have mostly had tax increases and either the same or lower wages for the last three years. Not too much to ask that our other employees do the same.

Lindsay said...

"Most of it will go straight back. Tax and GST."

These are after tax increases.

Lindsay said...

That is to say the total $240 million increase takes into account the percentage increase minus tax.

Anonymous said...

At a time when NZ is borrowing 250 mil a week to stay afloat, giving more money to the unproductive just leaves me speechless.
Murray M

Anonymous said...

. Slashing a couple of billion off govt spending would be a good place to start.

for a couple of months More like 50 Billion is needed now to dig us out of Hellens hole, and Key's hole will be even bigger!

The aged and infirm control the hearts and minds of the politicians.

Which is why we need to fix the franchise:
No representation without taxation.
No votes for codgers and bludgers!


At a time when NZ is borrowing 250 mil a week to stay afloat, giving more money to the unproductive just leaves me speechless.

At a time when NZ is borrowing 250Mil a week, giving money to anyone should be criminal negligence verging on treason

As it is, cutting all benefits immediately, yes including super and WFF and all the rest, is an obvious place to start. Eliminating the health and education budgets are the next two big ones - after that we'd have room to move.

To actually pay back the trillions of dollars of govt debt, and the hundreds of dollars of nett national debt (i.e. including private) that Hellen/Cullen encouraged us all to run up as they smashed the country down into a depression, I'd what GST up to 25% immediately, and perhaps introduce a tax-free threshold at 100K to encourage productivity.

And of course, the whole point of this is that there should be no compensation whatsoever.

Anonymous said...

"if we can't identify the bottom 10% of children - then what are school league tables for?"