Saturday, June 07, 2008

Street preventing choice and efficiency

The view of the author is that the privatisation process delivered benefits to:

• ACC by creating a more efficient and focused organisation,
• the overall scheme by properly defining the entitlements,
• insurers who made profits from the experience,
• employers by reducing premium rates,
• employees overall through improved rehabilitation and reduction in injury rates.

That is an excerpt from a review of the Privatisation of New Zealand
Accident Insurance Workplace Cover 1999/2000.

ACC Minister Maryan Street, who loathes the idea of competition and profit, is harassing National over any policy to re-privatise employers accounts. What caught my eye was her snide and petulant claim that National was simply "lining the pockets of their insurance company mates.”

Now that really is a fine example of the 'politics of envy' and what turns thinking people off Labour.

Friday, June 06, 2008

National's nineties record on welfare

A commenter from yesterday disagreed with my statement that National's recent record of getting people into the workforce is worse than Labour's.

The anonymous commenter says;

Again wrong. The single best effort here is Ruth Richardson in 1990 - all else pales beside this.

There seems to be a misapprehension about what National achieved during the nineties in respect of dealing to unemployment and general welfare dependence.

For the period 1990 to 1999 (October) the unemployment benefit numbers went from 139,625 to 143,707 peaking in 1992/93 at around 170,000.

Numbers on all other benefits continued to rise through the same period.

DPB 94,823 to 110,315
Sickness 19,511 to 33,043
Invalid 27,824 to 57,127

We all know that numbers on the unemployment benefit have plunged under Labour. Yes, they have enjoyed strong economic conditions in spite of their increasing regulation and interference. Yes, their achievements in respect of the DPB have been rather pathetic. Yes, there is a very real problem with the growth in the invalid's and sickness benefit, some of which represents what the OECD calls the "medicalisation of labour market problems."

But don't try and tell me National was a world beater at reducing benefit dependence because it simply isn't true.

Thursday, June 05, 2008

The "major difference between Labour and National"

John Key was in Taranaki last night talking to supporters;

''I personally believe we're going to win the next election,'' he told the packed conference room.

New Zealanders could see the one major difference between the Labour and National, he told them.

While National's were the politics of aspiration, Labour believed in the politics of envy and it was not taking them anywhere, he said to hearty clapping.

This is the Nats election catch cry. I first heard it from Mark Blumsky sitting on the Face Off panel on NewstalkZB. (Slightly ironic it should come from a disillusioned one-term MP)

I can't disagree that Labour is besmirched with envy politics. A disdain for "rich pricks" and discomfit with private success seems to have gathered momentum this year.

But is National really "aspirational"? It's one thing to lay claim to a moniker but breathing substance into it is another.

There is a world of difference between the two types of worldviews but there is not a world of difference between what happens in New Zealand when either a Labour or National government reigns. I know National-supporting bloggers have listed differences but I can never remember what they are. Not a good sign.

What should a government be aspiring to? Surely to lift New Zealand's comparative economic standing in the world would rank right up there. But we haven't seen the Nats commit themselves to achieving the rate of economic growth it would take.

It is broadly accepted that education is the key to prosperity and independence but National are happy to largely preserve the status quo with the abandonment of their earlier bulk-funding policy and retention of elitist zoning. Meanwhile literacy declines.

It is best practice to let the private sector run services yet the Nats have run a mile from privatisation.

And Working For Families might help people in the short term but it traps them in the long. It is the very antithesis of aspiration. Yet the Nats will keep it.

So what am I left to think? That the so-called "major difference between National and Labour" - the politics of aspiration over the politics of envy - is nothing more than a seductive slogan.

Wednesday, June 04, 2008

Begging for regulation


How should unhealthy food be regulated?

Ban advertising during children's TV (1658 votes, 23.4%)

Ban sports sponsorships (166 votes, 2.3%)

Label junk food (624 votes, 8.8%)

Tax junk food (898 votes, 12.7%)

Nothing - what we eat is a personal choice (3745 votes, 52.8%)

Now I ask you. How can what we eat be a personal choice?? It is the responsibility of the state to direct our diets. Everybody knows people are too stupid to look in the mirror and make any connection between too much KFC and being blobby. Last time I had a piece of KFC the fat it was cooked in dripped down my chin. DRIPPED DOWN MY CHIN. What we need is a Ministry of Mustn't Eat. It should be tasked with educating people that just like school choice and health choice, food choice is too much of a responsibility to be shouldered by the individual. It makes no sense for the state to own your life and your money and not your body too. We should all be grateful that those with better instincts than ours are preparing to step in and relieve us of our last vestiges of autonomy.

Bugger the majority.

Yes or no?

My mother was a teacher. She had a habit (and still does) of pulling me up on grammatical errors. A favourite was my misuse of the word 'borrow' when I meant 'lend'.

But one I always got her on is using a double negative. And it's very common. People will often fall into the trap by making a negative statement and then tacking "I don't think" on the end. So what is all this nit-picking about?

A report about Rodney Hide's Regulatory Responsibility left me struggling to draw a conclusion with this statement;

However the commerce select committee said it did not think the bill would not work as it would create legal headaches.

Perhaps we can find out exactly what is happening to this bill today when Rodney takes Leighton Smith's place for the morning as talkback host on NewstalkZB.

For Wellington and Christchurch listeners live-streaming is available here. Select Auckland.

Tuesday, June 03, 2008

Effects of raising benefits

This is a summary of some of the research into the effects of increasing benefit payment rates. It is from the Colorado Independence Institute during the early 90s. AFDC was the US equivalent of the DPB.

Though the issue is contested, many researchers believe there is a direct link between welfare and illegitimacy, and therefore a long-run link between welfare and crime. For example, a study by M. Anne Hill and June O'Neill (currently director of the Congressional Budget Office) found that a 50 percent increase in afdc and food stamp benefits led to a 75 percent increase in the number of women enrolling in these programs, a sharp rise in the number of years spent on afdc, a 43 percent increase in the number of out-of-wedlock births, and a 117 percent increase in crimes perpetrated by young black males. Researchers from the University of Washington found that a difference of $228 in monthly welfare benefits more than doubled a white teenager's probability of bearing an illegitimate child. Other U.S. and Canadian investigations show that even small increases in welfare benefits raise the odds of women going on welfare and becoming single parents. Roughly half the increase in black illegitimacy since the mid-1960s can be attributed to increased welfare benefits and easier eligibility standards, according to Hill and O'Neill.

Removing any incentive to work

According to the Dominion Post today a solo mother with two children on the domestic purposes benefit received $23,000 net a year - less than 55 per cent of the average income...

Currently working a 40 hour week on the minimum wage nets $24,960; a 30 hour week $18,720. The effective rate of taxation on earned income is slightly higher than on the benefit sum.

So it is easy to see why moving from a benefit to a low wage job is not "worth it".

Now if the In Work payment was added the net benefit income would rise to $25-26,000 - more than working a 40 hour week on the minimum wage.

People used to work because they had a work ethic. They wanted to pull their weight and be seen to be independent. Poor but proud. Today many will only work if it is financially advantageous. The government has to work with that reality. The CPAG wants to ignore it.

Monday, June 02, 2008


The Child Poverty Action Group begins its case against the government tomorrow. They want the In Work payment (now In Work Tax Credit) paid to beneficiary families as well. They claim the exclusion of beneficiary families is discriminatory.

This is my argument against the CPAG (repeated);

If the CPAG win, essentially we will see an increase in benefit levels. An increase in benefit levels leads to an increase in the number of people going on or staying on benefits. CPAG want a short term gain and refuse to see the long term cost which cannot be in the best interests of children.

There is no guarantee the money reaches the children anyway.

And, most obviously, the incentive effect of the In-Work payment will be nullified if it is extended to non-working families.

The Greens and the Maori Party are supporting the CPAG.

Who is going to win? We have seen the Ministry of Social Development forced to settle out of court previously for discriminating against a single male parent who had full custody of a child (the mother had full custody of the other child/ren) by not allowing him to be on the DPB. But in this case, should the government lose, there would be a significant financial impact. Around $3-400 million more would be paid to parents on benefits. (From the beneficiaries point of view that's about a 14 percent pay rise.)

Beneficiaries already receive family support for each child. It varies according to age and ranges from $57 to $95 per week. Payments increased in April 2005 and April 2007. I wonder if I could take a case to the Human Rights Tribunal claiming discrimination because I do not receive these payments?

Or, more to the point, perhaps I should try discrimination on the grounds that I do not receive the In Work tax credit. The government has set arbitrary conditions on who receives them. The one that excludes me is an income test. The one that excludes beneficiaries is a work test. If the CPAG can get the work test removed perhaps I can get the income test removed.

UPDATE: A couple of months back I put out a media release about the CPAG being "at loggerheads with the OECD" on the matter of what strategy is most effective in reducing child poverty. I was pleased to read in the Dominion Post this morning that the government will be calling two representatives from the OECD as witnesses in its defence against the CPAG.

Sunday, June 01, 2008

Mad Matt

What a load of codswallop from Matt McCarten today. If he was right about ACT than I would be an utter misfit. I would never have been placed on last election's list, let alone within cooey of becoming an MP. First he launches into the Business Roundtable;

Its ideology is quite simple: we're all essentially greedy and we should be free to make as much money as we can. If we exploit others in the process - well, that's just the free market at work. Now it seems Labour may be defeated this year, it appears to be getting ready to get back into the driving seat. No doubt it would have been behind the recent manoeuvre to bring Douglas back into Act.

We are all essentially self-interested. Greed and self-interest are completely different things. They produce different outcomes. The NZBR would concur with Adam Smith's defence of self-interest. In a personal sense I am self-interested. Those things that matter most to me are to be protected and cared for or I will become unhappy. I am protecting my own interests when I protect those of my children, family and friends. Business is the same. Self interest in one's own business success requires creating an environment where everyone employed or traded with is gaining something. When exploitation occurs - personally or professioally - unhappiness and failure result.

The NZBR is behind Roger Douglas's re-emergence? The person behind Roger's re-emergence is Roger. I am sure some people have been persuaded to stand for ACT indirectly via the NZBR simply because they promote (very well) sound ideas similar to those ACT promotes. We share the philosophy of individualism. This grand plan conspiratorial stuff is just self-gratification of the loopy left temperament.

It would have been devastated when John Key, a moderate, took out Don Brash as leader. Therefore it had to resort to a Plan B and coax decrepit Douglas out of retirement. With the support of his Roundtable cronies, Douglas is now effectively co-leader of the Act Party. I'm wary of political ideologues who claim our economic and social ills can only be cured if we adopt their plan. Apparently, Douglas and Act have a new 20-point plan. Most of us are probably tempted to roll our eyes about this nuttiness. But don't think they are harmless fruitcakes.

So what's your plan Matt? Drive New Zealand right off the bottom rung of the OECD ladder? All pre-election policy is a plan. Could we have some credit for being transparent about ours? No. I didn't think so. Because that blows another right-wing conspiratorial theory - the cloak and dagger hidden-agenda one. That's the one you now save for John Key.

Unfortunately for the far right, there is a major block to their success - the Maori Party......Therefore it should be no surprise the Business Roundtable released research it has sponsored which runs along the supposedly reasonable line that as we now have MMP, the Maori seats are unnecessary and allow a disproportionate number of Maori in parliament. Funny how the Roundtable didn't produce a report about the over-representation of white males in parliament.

.....The Business Roundtable doesn't give a fig about the role of Maori - good or bad. The report is merely propaganda to influence the public so National sticks with its promise to hold a referendum on Maori seats. Ask our country's 86 per cent non-Maori population if these seats should remain and the answer is a foregone conclusion. They will go, as the Roundtable intends.

This has nothing to do with Maori. It's the far right removing obstacles so it can get in a government it can influence to finish off the neo-conservative agenda begun in 1984.

That the NZBR (and by implication ACT) "doesn't give a fig about the role of Maori" is a ugly misinterpretation. One can care about people as individuals without agreeing to tribalist, collectivist notions and practices. That is the most important concept and maybe Matt McCarten just can't comprehend it. If New Zealand prospers (and prosperity is undeniably linked to freedom, not government) the people who will experience the greatest improvement in the quality of life are those who currently have the least.

Matt, if you are right, and the Business Roundtable and ACT are run by 'greedy, white, rich men' wouldn't they also be of the selfish 'I'm- alright- Jack ilk?' Why would they be spending their time and energy and MONEY bothering with ideas, philosophy and politics? Especially in their 60s and 70s. It doesn't stack up Matt.

I wish

From an interview with the Sunday Star Times,

Brash says while he was largely happy with National's policy platform in 2005, seeing it as a necessary compromise, he wonders whether he might have gained more votes campaigning as a conviction politician.

We will never know. But it's not too late to have another go Don. All you need is people around you who share the convictions you hold about what is needed to turn this country around.