Monday, September 17, 2012

Journalists: stupid or mischievous?

Left-leaning commentators have been grossly misrepresenting the government-commissioned benefit-system actuarial figures and report released last week. Scoop's Gordon Campbell here, and NZ Herald's Paul Little here.

According to Campbell,
Social Development Minister Paula Bennett is such a troll, it can seem pointless to rise to the bait. But yesterday’s claim – dutifully run as the lead on the NZ Herald website– surpasses even her own usual high standard of offensive stupidity. According to Bennett, if everyone on a benefit last year stayed on it for the rest of their lives, the cost to the nation would be $78 billion.
And Little says,

With all the grace of a cat dragging a dead rat on to the dining table and dumping it in the trifle, she told us she has just found out that if all the people on benefits stayed on benefits until they were 65, the cost to the country would be $78 billion.
What the report attempts to calculate is, based on a number of factors such as age at entry into the system, benefits applied for, presence of children etc the likelihood of existing beneficiaries remaining on welfare and the cost of that. This work began with estimations made by the Welfare Working Group which found that people entering the benefit system at 18 were likely to stay the longest for instance. (I had been attempting to draw attention to this for a long time through OIA questions around how many current beneficiaries began on welfare as teenagers, length of stay, benefit type etc).

Hence the following graph shows the cost of current beneficiaries tapering off. The way the above writers have described the calculation would have resulted in a graph with climbing payments (static number of beneficiaries plus inflation).

I can't believe the stuff they get away with.


Mark Hubbard said...

Good on you for highlighting this Lindsay. As my (still being worked on blog) 'Bride of Gramsci' will show (teaser post only up on my blog), this is another example of our fourth estate only able to feel about and emote on issues, rather than think about them. Unfortunately, Labour/Green politicians work on much the same basis. It's the heart of socialism as it has devolved down to in the hand of the well-meaning, but mis-informed, of the 21st century, it is implemented at the political and economic level in our planned economies, and it is destroying the free West. Our 2014 election will be fought over this.

S. Beast said...

This whole expense thing annoys me. The cost appears to be that of just core benefit, not supplementary assistance giving a lower figure then what it should.

- Where is the outrageous cost of accommodation supplement? We need to look at this because it is costing us a small fortune, probably enough to get a DHB out of debt each year.

- What is the cost over a "lifetime" of people working but receiving other assistance? In other words, do we need to look at low income earners not having upward mobility? Working they may be but they are still beneficiaries IMHO. How much is that costing??

Lindsay Mitchell said...

S. Beast, AS is in there along with other supplementary assistance. I'm wondering why the FTC isn't though.

Anonymous said...

There is one major problem with these figures - why stop counting at 65?. Its not as if the productive fraction of NZ has to stop paying for codger-bludgers, as against standard issue bludgers!

But the underlying point is inarguable - even without adding in ACC EQC WFF education and health - it is obvious to anyone who can add that NZ can afford nowhere near $78 billion - and we need to take immediate drastic action to reduce that figure.

Cutting all benefits by 50% - 80% would seem like a good start - but even $20 billion is still far far more than we can afford.