Sunday, July 10, 2016

Talk about dodging the question Jacinda

David Seymour writes in today's SST:

OPINION: Why are so many children born into benefit-dependent families?

"Much of the country is focused on child abuse, poverty, and putting kids' needs first. The political left tell us the Government should just spend a few dollars more, as they have told us for decades.

Yet the current Government taxes and spends $80 billion every year.  This surpasses the wildest dreams of the welfare state's architects.  When Michael Joseph Savage departed office, government spent, in today's money, only about $2700 per person per year. Now it's $17,000 per person (or $85,000 per family of five).

Just 2 per cent of working-age New Zealanders received benefits in the decades following Savage's reforms.  Now it's 10 per cent, and welfare spending is the biggest item of government expenditure. So how can we still have child poverty and neglect in New Zealand?

Lindsay Mitchell has made ending poverty her passion.  She studies it meticulously and presents her conclusions politely and respectfully.  The most staggering statistic she's given lately is that one in five children are born into benefit-dependent households.

You might think that if you're on a benefit it's a bad time to bring a child into the world.  You're probably like the overwhelming majority of New Zealanders who think it proper to wait, save and sacrifice before having children, in a comfortable environment, then stop when you feel your family is at a size you can support.

Chances are you don't begrudge taxpayer support for people who fall on hard times, need to escape an abusive partner, or have any of a dozen other circumstances.  But here is the interesting thing: being on a benefit seems to make you more likely to have children.

Only 10 per cent of working-age people are on a benefit, yet 20 per cent of children are born into families receiving benefits.  In the six months to March 2015, 6000 babies were added to existing benefits.  That's enough to raise the hackles of those paying tax while preparing to have their own family, but worse is the outcomes for the kids involved.

Benefits seem to make people have kids early, a key risk factor for maltreatment.  As of 2015, in the general population 22 per cent of births were to mothers 24 or younger, but 44 per cent of beneficiary caregivers (mostly mothers but sometimes fathers) with a child born that year were 24 or younger.

The ultimate result has been calamity for New Zealand kids.  University of Auckland researchers have found that, of under-fives who faced maltreatment, 83 per cent were on benefits before age two.

Out of fairness to the taxpayer and the children, we need a new deal.  It's simply not good enough that the Government taxes some people, who are often waiting, saving, and sacrificing for parenthood, so that it can pay others to have kids earlier.  It's absolutely unacceptable when we know this policy is enlarging child poverty and abuse.  We need to put children first.

If you're 18 or younger, you can't get an all-cash benefit from the Government.  Instead it pays rent, power, and basic necessities before giving the remaining entitlement in cash.  A compassionate government should attack child poverty by extending Income management to any parent who has additional children while on a benefit.

The message would be simple.  If you want to have children while receiving a benefit that's fine, but the Government will give entitlements in a form that puts the needs of the children first."


"You're right, David. A lot has changed since Savage's day.

But it's not quite right to claim that in the decades following his reforms, that very few received benefits. From 1946, every family received Government support. It was called the Universal Family Benefit, and it went to every mother who had children under the age of 16. That made them part of the welfare state, but no one was vilified for that.

Back then we also had low unemployment, generous state housing, high home ownership rates, and a 40-hour week that delivered wages you could live on. In contrast, we now spend billions of our welfare budget topping up working people's low wages and high rents – this is where the fastest growth in our welfare spending has been. In contrast, the number of people on sole parent support for instance, has remained static for years and represents just over 2 per cent of the working age population.

Yes, there will be a small, tiny minority of people who make bad calls and it impacts on their children, whether they are on government support or not. And yes, we should have the tools in place to deal with that (just like we should have the tools in place to deal with people who avoid paying their taxes) But if we want to look at what has really changed since Savage, it's the fact our welfare state is having to pick up everything  that is broken – ridiculous housing costs, low wages, people working multiple jobs to put food on the table and barely see their children, an education system that leaves too many behind, and a generation of kids who have lost hope.

If you want to genuinely help turn the bus around, start with that list. I'm sure Savage would."

This is classic Ardern waffle. Totally avoiding the central question and steeped in irony. But let's deal with the dodges anyway. In the order they appear:

Instead of the Universal Family Benefit there's now Working For Families which targets those families on lower incomes. National tightened the targeting. So Labour's response is to stop targeting low-income families? And people who get WFF are not vilified for it either, by the way.

Back when there was "low unemployment, high home ownership rates, generous state housing and a 40-hour week that delivered wages you could live on" we had preferential tax rates for family men, wages set by the Arbitration Court, unproductive jobs and lots of horrible stuff that went with a highly regulated economy. So Labour's response is to re-regulate the economy? Undo their late 1980s work?

The "fastest growth in welfare has been on topping up working people's low wages and high rents". Really? That'd be the accommodation supplement and WFF. When you create a policy and go from zero spending to over $2 billion of course it's going to show the fastest growth. So Labour's response is to get rid of its own policies? 

What she claims is anyway only true over a short period. The growth Seymour refers to has come because NZ went from having around 2% of its working age population on welfare for many decades (most commonly the Widow's Benefit) to 10% today (and it's been higher).

Let's look at the next claim, "..the number of people on sole parent support for instance, has remained static for years and represents just over 2 per cent of the working age population." Static at 4% actually (see above). It has now dropped to 2.4% due to National's welfare reforms that concentrated on getting sole parents into work but also moved them onto other benefits. The fact is at the 2013 census 28 percent of families with dependent children were sole parent and just over three quarters received a benefit. So Labour's response is to sweep these numbers under the carpet?

According to Ardern, who is all-knowing, a "small, tiny minority of people make bad calls". But one in five children born onto welfare does not represent a tiny minority. Which implies most of the decisions to have children who will immediately be plunged into 'child poverty' are good ones. 

And her piece wouldn't have been complete without the requisite pop at tax evaders. You see, rampant welfare isn't the problem. It's the people who question why they are paying their taxes for it who really need to be chastised and controlled.

Ardern is a nice person who is very big on sympathy but, like the party she represents, woefully short on solutions.


Anonymous said...

...."woefully short on solutions."

Read that as ..."woefully short of thought."

Thinking through to actual measured OUTCOMES is required before we can have an Opposition Party.


JC said...

I'd be quite happy to scrap the accommodation supplement and WFF and go back to the old UFB.. that was $1.50 per child per week or near enough $4 now after inflation; good call Jacinda.

"Low unemplyment", sorry, it was actually very high and we camouflaged it with make work schemes. Once these schemes stopped, eg, Railways went from 20,000 to about 6000 and forestry and agriculture got rid of 40% of their staff and labour.

Low house prices.. well, no RMA and very little Nimbyism and lots of available land and subsidised jobs in the regions will do that for you.

Thing is, all these nice things back then were possible with our guaranteed market to Britain but that superhighway closed in 1972.. we borrowed to 65% of GDP to cover the hole but eventually we ran out of other people's money.

One other thing happened and its probably we we have this blog.. we developed a benefit entitlement mentality that broke families which broke the economy and national morality.

Jacinda.. and Labour's problem is that MJ Savage had the great good sense to rule through depression and die at the start of WW2.. well before his policies could come home to bite him.

His death ensured his legend and legacy but his policies put his party to sleep for 29 of the next 35 years.. continually trying to recreate the Savage years without understanding their inevitable end would be Venezuela 2016 has nearly killed the party.. the Mrs Haversham of NZ politics.


Anonymous said...

$1.50 in today's dollars is still far too much - because it ignores hundreds of thousands let kid on plunket, kindergarten, primary school, secondary school, Uni, doctors, hospitals etc.

Just one year of secondary schooling costs 30,000 - 50,000. Deal with that and yeah I guess I'd stump up $1.50.

paul scott said...

I don't know how many of them noticed you over at Kiwiblog Lindsay. haha though Jacinda channeling Savage, and then speaking for him.
The trouble with Seymour is his tendency to make an argument, then drip into the Nanny State nonsense.
Like @ you know we really do want to give out good benefits, just that we will call them child benefits, see everything fixed.
Farrar is worse, on another subject he is not sure whether Nanny should tax and spend, or tax and spend, and Capital taxes.
The State dragging left, carrying ACT its propagandists with it.

Anonymous said...

Why won't people - ACT foremost among them - realise that the only solution to this entire mess is wholesale immediate abolition

Whether it's welfare, government schools, government hospitals, government doctors, government "tax credits" --- all funded by something like 1/20 to 1/100 Kiwis who actually pay lifetime nett tax.. and who therefore, in any kind of real constitutional democracy are the only people who should get to vote.

And would we vote for all this welfare? Ha! we wouldn't vote for one red cent!!

Brian Richard Allen said...

.... (Ms Ardern's) piece (of course, included the Left's reptilian-brain/de rigueur crack) at "tax evaders" ....

Actually, it did not. Tax evasion is a crime and is supported by none of us. Ms Ardern's gratuitous swipe was at the tax avoider, which designation surely includes every New Zealander with even a room temperature IQ. The by-every-legal-means-available avoidance of tax being the absolute responsibility of every creative, innovative, productive and/or industrious citizen!

Meanwhile, while on the subject of taxes (stand-over and shake-down theft, by another name) people might be a little less comfortable about living off the product of the looted lives' energies of other, better, men, were "benefits" renamed, say, "Receiving, Handling and Profiting-From, the Proceeds of Organized Crime."

Until the fact is sheeted home that amoral activities are not made less so by enacting them into legislation -- and the institutionalizing of Envy is halted -- and reversed -- New Zealand (along with the rest of what little is Left of Judeo-Christian/Western/Human Civilization) will continue, irreversibly, to spiral into tyranny.

Brian Richard Allen

Lindsay Mitchell said...

Brian, I originally used the word 'avoider' but (for the weak reason that spell checker didn't like 'avoider') changed it to 'evader'. According to my Thesaurus 'evade' is a synonym for 'avoid' and vice versa (unsurprisingly). I haven't appreciated the fine line between them or why is it morally OK to avoid but not morally OK to evade. Legalistic nomenclature does not explain it to me.

Brian Richard Allen said...

Hey, Lindsay - Maybe I've lived a couple too many decades in America but my Unabridged Merriam-Webster is pretty clear that Evasion is: "the act of evading, dodging, or circumventing a law, responsibility, or obligation; specifically : the act of failing to pay taxes or of minimizing taxes in violation of law." Fairly unambiguous as to the lawbreaking. Whereas Avoidance is: "... an act or practice of avoiding something undesirable or unwelcome ..." Including no such implication vis-a-vis the Law. -- B A.:

dinsley said...

JC writes, ""Low unemplyment", sorry, it was actually very high and we camouflaged it with make work schemes.....we developed a benefit entitlement mentality that broke families which broke the economy and national morality." Government departments soaked up unemployment which was good because although it cost more than most benefits + add-ons it kept people in the work habit, left less opportunity for the devil to make work for idle hands, allowed people the dignity of being employed - and being unemployed, on the dole, was shameful back then. Not many people can occupy themselves in socially desirable productive ways without the structure of a job, least of all those who are wage-workers by choice. The skills and mindset to be entrepreneurs, self employed, are not everyone's. Parent(s) in a routine of going off to work sets an example of the discipline needed to be a grownup. Overall I believe those "make-work schemes" were good value for money.

Lindsay Mitchell said...

Dinsley, I have considerable sympathy for this view. It exercises me. It wasn't just the public sector soaking up unemployment in the 1980s. I well remember one job I had running a payroll programme for Mobil. It was a full-time job which took 3 days to complete each week. The rest of the dept was similar. And we made no pretence of working once our weekly duties were completed. It was good fun and very sociable. Later technology and efficiencies will have dealt to that scenario.
Many of the people carried during that decade who became redundant in the 1990s recession didn't recover. We talk now about reasonably low unemployment (and I am guilty of it) but forget about the 100,000+ on what were the Sickness and Invalid benefits.
I also argued in favour of make-work jobs for the intellectually disabled to give them purpose (remember Labour shutting down their workshops around 2006 because they weren't paid the minimum wage?) Same premise really.
I don't know what the answer is beyond somehow using what is being pumped into working age welfare into providing jobs. And that is taking place under various subsidies. The problem now is there's an anti-social, disaffected, unemployable segment.
Breaking into that generational cycle is one of the reasons so much focus has gone on getting single parents into work. Your point about being a role model for children is probably the most important.