Tuesday, October 07, 2014

The investment approach

As Bennett leaves social development there is a bit of hoopla about the investment approach and what else she might achieve across other departments. She is viewed as a great success and in some ways I think that's correct. But you'd want to see the numbers really starting to improve from here on in.

All benefit numbers graph June 2014

Although the numbers are dropping slowly in both absolute terms and as a share of the working age population, that demographic is shrinking relative to the 65+ age band. Here the recipient numbers continue to climb steadily (Call Super whatever you want but it comes out of the MSD budget and is a cost to govt/taxpayer.)

The investment approach to working-age welfare meant spending more on those who would cost more over their 'working' lifetime, aiming to reduce their dependency.

I wonder how the investment approach would work with Super? It can hardly be identifying those who will be on Super longest and investing more to prevent this from happening.

An investment approach to Super would be to keep people working, productive and paying taxes for longer. Oh, but that's Labour policy.


Anonymous said...

good points!Nat Super ,the big vote winning bribe introduced by Muldoon is the biggest bludge of all.Anyone needing welfare should be treated by the same criteria...i.e one standard benefit for those who need assistance...means tested.

Anonymous said...

Nat Super ,the big vote winning bribe introduced by Muldoon is the biggest bludge of all.

Yep. It's pretty clear that would be the main plank of any new party to replace National (now that National has replaced Labour). Note that even ACT doesn't have this as policy - ACT's policy is Labour's plus removing govt subsidies from KiwiSaver and no compulsion, and ACT completely rules out immediately termination of current super arrangements (even though acknowledging current recipients have in no way "earned" the super, and that the current arrangements remain deeply unfair to today's taxpayers).

What is doubly interesting is that this policy should have support from the radical leftists, greenies, MANA types -- because super is a huge subsidy from poorer Maori and Pasifika taxpayers to richer longer-lived whiteys.

tranquil said...

I'd be interested to hear people's comments about *Singapore's* approach to welfare.
They have what seems to be a "compulsory savings" scheme called the Central Provident Fund.
This article describes it -

Singapore's approach seems to be a *much fairer*
and more sensible way of doing things.

Lindsay Mitchell said...

'Singapore’s national philosophy, “nothing should be free,” has encouraged both market-based strategies and individual responsibility.'

Say no more.