Monday, June 01, 2020

The Left loathe the concept of the 'deserving' and 'undeserving'

A commentor on Kiwiblog drew attention to a Newsroom article by an Auckland University sociology professor:

Dr Louise Humpage was hoping Covid would help Kiwis better understand how tough it is to live off the benefit, but the newly unemployed are not being treated like main beneficiaries at all...
I became more suspicious of the Government’s intentions when it announced that 35 new unemployment centres would be established across the country, along with an employment service specific to those directly impacted by Covid-19, who are not on a main benefit.
Why? Work and Income already has offices in most towns and cities across New Zealand which focus on finding employment.
Could it be that they are either a) not very good at their job; or b) that the ‘toxic culture’ endemic in these offices is so awful that we couldn’t bear the shame of letting ‘ordinary’ (i.e., working) New Zealanders experience it?

I doubt the 35 new employment centres referred to will be places people walk into. Applications and grants all take place on-line. The new processing centres will be about boosting staff capacity to approve applications and attempt to redeploy workers.

The usual eligibility requirements she refers to as a “toxic culture” have been suspended because of the increased workload in processing new applications. Not because they were unfair.

She writes, “the base rate for the existing Job Seeker Support is $250 a week (before tax – yes, it is taxed) for a single person over 25.” Wrong. It is $250 after tax.

Essentially she wants all benefits paid at the same rate as the temporary Income Relief Payment saying, “a truly brave government would look voters in the eye and say ‘we want to treat all unemployed people, no matter when or how they came to be jobless, with the same dignity and respect that all New Zealanders deserve’.”

There are thousands of beneficiaries who have 1/ never worked 2/ made themselves unemployable through crime and/or drug and alcohol abuse and 3/ have no incentive to work because it pushes up their child support liability and income-related rent. This is the unfortunate reality of the benefit system.

In fact it would be preferable if the system could take more account of ‘deserving’ and ‘undeserving’ – not less, leading to greater fairness for anyone who is genuinely (temporarily or permanently) unemployed through no fault of their own.

Sunday, May 31, 2020

Treasury predicts 1 in 6 on a benefit by June 2021

Treasury is forecasting 487,500 working age people will be on some form of benefit by June 2021 (16.2 percent).

At the moment it is nearer to 1 in 10 (11.7 percent).

Here are the numbers to May 22:

I haven't posted much about the data to date because the numbers are being kept artificially low by the wage subsidy AND now the new Income Relief Payment (IRP) which cannot be applied for until after June 8. 

Obviously Jobseeker numbers will stabilise as people apply for the better paying benefit but one has to assume that Treasury's forecast includes IRP recipients despite Labour insisting that the IRP is NOT a benefit.

Friday, May 29, 2020

ACT: "Minimum Wage Hikes And Handouts -Sounds Like Labour"

Todd Muller made a speech today. Seymour responds:

Minimum Wage Hikes And Handouts -Sounds Like Labour

Friday, 29 May 2020, 2:49 pm

Press Release: ACT New Zealand

“It sounds like Labour, is what I’m already hearing about National’s promise to raise the minimum wage regularly while handing out money to businesses,” according to ACT Leader David Seymour

“ACT won’t sign up to supporting a Labour Government, or vote for Labour Party policies in any Government.


I would add that as Labour made the historical move of linking benefit rates to average wages, National is also promising regular benefit increases.

No matter what you think about the policy, it's proof that under Todd Muller, National is even more deserving of the label 'Labour-lite'.

Trying to please everyone results in pleasing no-one.

Wednesday, May 27, 2020

Forget the forecasts - free up the restrictions

One: Unemployment could rise to 18 per cent, house prices could halve, and the viability of the banks could be "called into question" if the coronavirus prompted a further period of economic lockdowns, the Reserve Bank has warned.

Two: Unemployment is likely to peak at only 8.1 per cent and not until March 2022, according to a relatively upbeat forecast by the New Zealand Institute of Economic Research.

The first is more than double the second. I'm in the middle. But apart from Treasury trying to guess the size of the expenditure it's pretty futile. Trying to make people feel 'upbeat' isn't going to save their job.

We need action and activity immediately.

The Prime Minister is now clearly the one with the foot on the brake. ACT and Winston First are both calling for a move to level one. National appears neutral. Useless as usual.

Sue Bradford says Labour betrays its traditions

If Sue Bradford writes something I generally read it. Because Sue has political conviction. She shunned Kim Dotcom's money and has stayed true to her roots. I respect that she engages with opponents in a  thoughtful and non-combative manner. That was my experience anyway.

Here she addresses the rift created by the Jobseeker Premium benefit introduced from June 8:

For over three decades, we've had governments who politically and through the administration of a flawed, punitive welfare system have blamed unemployed people and beneficiaries for their situation, rather than treating "them" as "us".

Yesterday, Labour brought this two-class system into stark focus once again, as it did when it introduced the discriminatory "In Work" payment as part of Working for Families back in the mid-2000s.

During his Budget speech on 14 May, Grant Robertson evoked the "great traditions of the First Labour Government who rebuilt New Zealand after the Great Depression".

I reckon the employed and unemployed workers and their families who brought the first Labour government to power in 1935 would be scandalised by Robertson's evocation of that era at a time when his government is entrenching a brutal divide between the worthy and unworthy poor.

No. I doubt they would. A 'brutal divide between the worthy and unworthy poor' was a stark feature of early Social Security. Unmarried mothers couldn't access a benefit. Criminals couldn't. And sorry to go on about it but anyone who was considered the author of their own misfortune certainly would not have been able to drawn on the pooled social security funds paid into a specific account and recorded individually in a passbook weekly.

What the "employed and unemployed workers" of 1935 would be scandalised by is being forced to support other people's children whose father's pay nothing. They would be outraged that someone who has committed a crime can come out of a prison and get immediate recourse to welfare - repeatedly! They would be angry that  entire isolated rural communities could turn their local economies on welfare.

What I think Sue overlooks is the strong socially conservative streak that existed in Labour (and in most people) back at the outset of social security. The left today is rather revisionist in recalling the sentiments of their forebears.

Tuesday, May 26, 2020

Questions about the Income Relief Payment

Perhaps Freudian, the word ‘relief’ hasn’t been used in relation to state assistance since the Great Depression when it described the government’s relief work schemes eg the building of the Homer Tunnel on the Milford Road.

But questions …

1/ How are the other 300,000 beneficiaries not on the Jobseeker Premium going to feel about being paid a basic rate of up to 50% less than the favoured? Probably like those green grocers and butchers who were shut down in favour of dairies and supermarkets during lock down four. Justifiably angry and unhappy.

2/ Grant Robertson says the IRP is about ‘cushioning’ and economic stimulus but if you’ve just been made redundant and know the benefit you are receiving will be halved in 12 weeks, would you be out spending? Apart from on the basics like mortgage or rent, food and utilities?

3/ Given the two large English-speaking countries without wage subsidies - Canada and the US – have  unemployment  rates of 13-14 %, why will NZ be any different? Ours will be in double digits when the IRP policy ends - when the chance of finding other work is lowest. If still in power, will a left-wing government introduce massive ‘benefit cuts’ - knocking the Jobseeker Premium recipients back to Jobseeker Regular rates? (BTW Treasury estimates are for Jobseeker numbers  to reach 297,000 in 2021)

4/ How long can the economy be kept artificially afloat? That’s the question for National. Will they have the kahuna’s to tell the country – during the election campaign - that we cannot keep borrowing? Or will they be forced into a Faustian bidding war for votes?

5/ Does the public understand that when Roberston talks about creating a unemployment insurance scheme similar to other countries  that it will, if it is anything like the US scheme, be paid for via employer and employee premiums?

(BTW when I searched the budget expense tables for the wage subsidy I found one item described as  "The 2020 forecast of non-departmental expenses includes costs in relation to the Government's response to COVID-19" projected as $9.122 billion. That's already well surpassed.)

Monday, May 25, 2020

What will National do?

The new Income Relief Payment for people who have lost their jobs due to the  Covid response is available from June 8 for 12 weeks. That takes Labour up till 2 weeks before the election.

So how will this play out in the election campaign? Because the question hangs in the air and demands an answer.

Will Labour extend The Jobseeker Premium (pays around 75% more than The Jobseeker Regular) beyond September 7?

Which forces National to answer the same question.

However it plays out, Labour has put National in a politically fraught position.

Labour are being either very smart or very foolish and I can't decide which it is. But I don't think like socialists.

These wage subsidies and high rate income relief payments cannot go on and on. National may just have to come out and say so.

And if the public can't accept or understand that, then would you want to govern them anyway?

I get more worried by the day.

Update: The PR says, "The payment will be available for 12 weeks from 8 June for anyone who has lost their job due to the impact of COVID-19 since March 1." I understood that in terms of the wage subsidy framing ie it would be available over that 12 week period. In fact the availability is from the time of the claim for up to 12 weeks for any job lost between March 1 and October 30 so could extend into 2021. The question I asked isn't substantively affected.

Friday, May 22, 2020

The Great Depression birthed Social Security. The Covid Depression could kill it.

Social Security benefits were legislated in 1938. The Labour government harnessed the collective financial power of all workers to provide for those who fell on hard times through no fault of their own (quite removed from today's premise where own-fault is ignored).

Participation was  a personal process with each citizen having their own recorded contributions and a pocketbook notating them. The money originally went into a distinct fund from which the government invested. State forests for example. It started going into the consolidated fund during the sixties.

It all worked well for a period. People had common values and didn't abuse benefits. They had been bruised by the Great Depression and the First World War.

But a 'free' money genie can never be kept in a bottle.

As societal values changed, calls for greater widening of the safety net came. For instance, Family Benefits were relatively (but decreasingly over the years) generous and paid to the mother. But only married mothers qualified. Resistance to benefits being restricted to the nuclear family grew and from the mid 1960s all mothers qualified.

As communities became more tolerant of human frailty, especially drug addiction, sickness and invalid benefit qualification criteria loosened.

That's just two examples of how social security has evolved.

Add in another compounding condition. The more normalised benefit dependence became, the greater the uptake.

The recession of the late 1980s wrought havoc and receipt blew out in the 1990s to eye watering levels. While academic lefties will tell you that the welfare state was dismantled under Roger Douglas and Ruth Richardson that's rubbish. Yes some cuts to rates were made (but eventually effectively  restored via other new forms of second and third tier assistance). The Family Benefit was abolished but half of the savings were redistributed to needier families (a little known fact). While numbers relying on an unemployment benefit gradually fell uptake of the other three - Sickness, Invalid's and Domestic purposes continued to climb.

This century receipt had gradually declined (after the GFC spike) but only to levels viewed as reasonable when compared to the early nineties, not the 1960s or 70s. Dependence is still historically high at around 1 in 10 people.

The current Labour government was in the process of turning the downward  trend around. More people were accessing benefits despite the unemployment rate being low and jobs plentiful.

And that was before Covid.

Now?? Here's a few future scenarios.

Social security is the greatest $ liability the govt has, though the majority was in Superannuation. The wage subsidy is heading towards the total annual Super bill. Means-testing and lifting the qualifying Super age cannot be avoided. NZ was out of step with Australia, the US and the UK anyway in not raising the age. Though everyone seems to have forgotten we still have a rapidly ageing population.

With dwindling income ACC will seek to offload as much of its caseload to MSD as it can, increasing pressure on the MSD budget. At the same time more people will pile up on the sickness-type benefits as the health system struggles either playing catch-up after weeks of unnecessary inactivity or coping with new Covid outbreaks. The payment rate of the highest paying benefit, the Supported Living Payment, will drop.

There will be cuts to the accommodation supplement as the property market adjusts downwards.

More assistance will be provided as repayable regardless of whether that prospect is realistic.

As the imperative to get anybody they can into work ramps up the sole parent benefit will go. Paying people to look after their own children will be seen as a luxury.

Instead of the current move to NOT chase fathers for child support, the reverse will occur.

The lower age limits for benefits will rise and families will be expected to provide for previously independent children.

Working for Families will be severely curtailed.

Paid Parental Leave axed.

That's just a few possibilities.

Social Security is the very opposite of its name. It is not secure. It relies wholly on revenue from taxation or borrowing. It's sustainability cannot and should not be taken for granted as we go into a depression of unknown depth and extent.

It won't matter whether the government is Labour or National. The former will just delay the inevitable.

Wednesday, May 20, 2020

Rawinia Barrett ... or not

In 2015 I came across this photo of an unidentified Maori woman on the internet.

Because I used it to produce the painting below I came to know it quite intimately.

Early January 2020 I walked into the Taranaki Museum and came across this exhibit:

I stopped in my tracks. My unidentified subject was revealed as Waikawa, or Rawinia, Barrett the wife of whaler and trader Dicky Barrett - after whom Barrett's Hotel and Barrett's Reef are named.

In my mind there was no doubt at all that the photo had lent itself to the woodcut. This was a fairly exciting discovery to me.

But as I absorbed the information overnight I realised that there was a fly in the ointment. Next day I went into the reference section of the Taranaki library and read all I could about Dicky and Rawinia Barrett. Plenty about him but very little about her. Then I went and visited their joint graves.

Rawinia lived between 1811 and 1849. Before photography.

So I sent the following email to the curator:

I visited your museum for the first time on 4/1/20. You are displaying an image of Rawinia Barrett, Dicky Barrett's wife as per attached.

The image was immediately familiar to me because I produced a painting from a photograph with the same face, pose and clothing details:

The photo is in a collection held by the French National Library and labelled as created between 1860 and 1879.

The similarity between the 'woodcut drawing' and the photo is unmistakable. I believe the woodcut drawing was executed from the photo.

But the photo could not be of Rawinia Barrett who lived between 1811 and 1849 - before the age of photography in New Zealand.

Perhaps you can check the provenance of your display image to ascertain whether she is indeed Rawinia Barrett.

Not long after I received the following response:

I've had a look into the woodcut image that is described as depicting Rawinia Barrett, and what I've been able to find is that the image was published in the book 'Early Days Taranaki' by local historian and collector Fred B. Butler, with a credit line stating that the image was reproduced with permission from Mr and Mrs W.T. Duffin of New Plymouth (descendants of the Barretts), and that the woodcut block was loaned by the Taranaki Herald.
But as you say, the woodblock image is very clearly an artistic derivative of the photograph that you found online, and it's certainly highly unlikely that Rawinia was ever photographed as I don't believe she left the country. So I suspect that someone along the line has incorrectly attributed the woodblock.
The writer assured me that she was going to do "some more digging" and I inquired again mid March but was told nothing definitive had been discovered. I now expect the issue is not of great urgency given recent events. BUT...

This is a prime example of how errors - even unintentional - become 'truths' over time.

I note that there are a couple of family trees into which descendants have put a lot of time and energy using the woodcut image to depict Rawinia.

Sadly it is not.