Monday, January 27, 2014

Labour's new bribe

Child poverty is declining by every measure

The most commonly used measurement which counts children in households below 60 percent of the median household after-housing-costs income, has fallen from 37 percent in 2001 to 21 percent in 2012.

Yet Labour continues to claim that "more than ever families are struggling to make ends meet."

They manufacture a crisis in order to find a solution. That's the business of politicians. That's what keeps them in well-paid, prestigious, jobs.

Back in 2004 Steve Maharey described Working for Families as "...the biggest offensive on child poverty NZ has seen for decades." From 2005 the Family Tax Credit and In Work Tax Credits were steadily increased and inflation-proofed. When National came the policy was retained.

But now it's not enough? Not if you need to win an election.

A new scheme is devised with its own name, BEST START (just promising to increase WFF payments wouldn't have been as sexy). So it all smells like a bribe.

It worked in 2005 and Labour are hoping like hell it will work in 2014.

Half a billion of extra welfare spending. If they need an extra 200,000 votes that's $2,500 per vote.

RISKS

The main reason for child poverty is between a fifth and a quarter of babies born every year will be benefit-dependent by the end of the year. Effectively increasing the Sole Parent Support (ex DPB) by $3,000 a year isn't going to discourage that pattern of behaviour. This policy risks growing the number of benefit-dependent children which will achieve the very opposite of what Cunliffe claims to want.

Money for nothing always reduces work effort. At a time when we need more people working to support the ageing population this will reduce female labour force participation.

It will undermine the welfare reforms aimed at reducing long-term dependency by making benefits more attractive. Of course there is no guarantee the new work-testing will be retained if the government changes anyway.

It will cost employers as females stay away from work for longer. Employers have opposed extending PPL.

There is no guarantee the money will be spent on the children. There is already clear evidence that many low income parents budget well and manage as a consequence. They are officially defined as being in poverty but not in hardship. Others don't manage their money well. Providing more won't  change that behaviour.





Update: After an interview with Larry Williams (starts 2:52) NewstalkZB  reports my comment here.


8 comments:

Anonymous said...

Of course it's a bribe. Just like the Nat's half-billion to teachers' unions was a bribe.

If I were running ACT I'd go with precisely two policies:

* totally non-negotiable: 1% off the top marginal income tax rate for every % of the party vote we get

* negotiable: real cuts to welfare. Dave Cameron in the UK is cutting by something like 5% year-on-year. Small but over time it all adds up.

That's it. And a promise to keep it simple: No fancy spreadsheets, no ministerial posts, no parliamentary perks, no expense accounts. Just policies everyone can understand.

Brendan said...

Sad but true.

Anonymous said...

The only way to stop this stupid promising at someone else's expense is to treat voters like Hong Kong does.

3.16

Mike said...

Is this what we have been reduced to?

You wait for the socialist happy-clappers to refer to this as an act of compassion. This is not compassion. There is nothing compassionate about enacting legislation that allows the government to take legitimately earned (and taxed) money from the productive by force and redistribute it to who they think deserve it more.

I am positively livid about this. I feel that I will be forced to act in the way we in the productive sector always do when faced with another attack on our liberties and pay packets..... I will have a whinge in the smoko room tomorrow, complain that all politicians are bastards, lose interest in the electoral system, grunt and decide not to vote.

Problem solved!!!

Anonymous said...

Labour is desperate for power, that is all.
Lolly scramble time.
It will win them lots of votes.
Now, what will the uni students be promised?

Anonymous said...

It won't win them any votes - none that they haven't already got.

The results of this election are already known.

National will be by far the largest party in parliament, and the only party with a moral right to govern. Any government not led by National will be seen as illegitimate by all the businesses in NZ, and by all the National voters, who of course include everyone in NZ who actually pays any tax.

A non-National government after the next election will be illigitimate.

Oswald Bastable said...

If the comments on the 'Stuff' story were anything to go by- this will do Labour no favors!

Only the blinkered party faithful see this as anything but a blatant BRIBE!

Lindsay Mitchell said...

Ditto the comments submitted to Larry Williams by text and email.