NZ Initiative: Thatcher's watch

The NZ Initiative included the following graph in this weeks Insight:

Lord Monckton lays a complaint with Victoria University

Worth a look.

Heart-warming to see some academics being taken to task.

"Deep thoughts..."

Another e-mail in-box arrival. Those my age and older will identify with 17:

Deep thoughts for those who take life way too seriously

1. Save the whales. Collect the whole set.

2. A day without sunshine is like......night.

3. On the other hand, you have different fingers.

4. Remember, half the people you know are below average.

5. He who laughs last thinks slowest.

6. Depression is merely anger without enthusiasm.

7. Support bacteria. They're the only culture some people have.

8. A clear conscience is usually the sign of a bad memory.

9. How many of you believe in psycho kinesis?...Raise my hand.

10. OK...so what's the speed of dark?

11. When everything is coming your way, you're in the wrong lane.

12. Everyone has a photographic memory. Some just don't have film.

13. How much deeper would the ocean be without sponges?

14. What happens if you get scared half to death twice?

15. I couldn't repair your brakes, so I made your horn louder.

16. Why do psychics have to ask you for your name?

17. Inside every older person is a younger person wondering what  happened.

18. Just remember---if the world didn't suck, we would all fall off.

19. Light travels faster than sound. That is why some people appear bright until you hear them speak.

20. Life isn't like a box of chocolates. It's more like a really hot curry. What you do today might burn your ass tomorrow.

Conservative Party defends beneficiary freedom

The Conservative Party is defending beneficiary freedom of choice:

“Another freedom has been lost this week,” says Conservative Party Leader Colin Craig, “as the National Government have voted to dictate to beneficiary parents how their pre-school children will be educated.”
“The Social Security Amendment Bill appears to have, as an underlying assumption, that beneficiary parents are somehow unable to make the best choices for their children. This simply isn’t true; many of these parents are doing a great job in sometimes very difficult circumstances. They don’t need a bossy government dictating their choices,” he says.

But tax-payers have to put up with beneficiaries dictating their choices. There are probably thousands of parents who would like to stay home with their children, maybe even home school them but have to go to work to pay the taxes that support single parent's freedom of choice.

Craig is putting the cart before the horse. He should be defending the freedoms of those who are forced to fund other people choices, limiting their own in the process. We need to shrink the dependent sector to increase choice across the board.

National is creating demand for the pre-school infrastructure necessary (at least temporarily) to get more women working and off welfare.  The numbers can't come down without it. A social spin-off is some, not necessarily all, children are going to benefit from pre-school education.

Like Craig I'm a fan of woman staying home if they want. But not if they have to force someone else to fund it. Likewise I can sympathise with those who want to home school but not if someone else has to pay for it. 'Freedom' can't properly describe choices paid for by somebody else.

Truth column April 4-10

My Truth column from April 4-10

A well-known journalist recently had a pop at Radio New Zealand for being too left-wing.
Not being a listener myself, I can’t say if he’s right or wrong.
But I was once a guest on Kathryn Ryan’s Nine to Noon show discussing the blow-out of numbers on the sickness and invalid benefits (more than 10-fold since 1970).
The environment was clinical and coldly inhospitable. Perhaps my views about too much incapacity being self-inflicted had something to do with the ‘ambience’.

More

The lifespan of a democracy

 Arrived in my e-mail box and caught my attention:

In 1887 Alexander Tyler, a Scottish history professor at the University of Edinburgh, had this to say about the fall of the Athenian Republic some 2,000 years prior:
 

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, (which is) always followed by a dictatorship."

"The average age of the world's greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence:

From bondage to spiritual faith;
From spiritual faith to great courage;
From courage to liberty;
From liberty to abundance;
From abundance to complacency;
From complacency to apathy; 

From apathy to dependence;
From dependence back into bondage." 

The Obituary follows:

Born 1776, Died 2016

Where is NZ right now?

Plummeting fertility after 1960

JC commented yesterday about the steep drop in Maori fertility after the pill was introduced.

There's likely a fascinating story to tell on Maori fertility. According to my Yearbook 2000 Maori women had 6 kids per female in 1960 but when the Birth Control pill arrived that plummeted to just over 2 per female by 1990 before a steady recovery to the present level. Even the arrival of the DPB in 1973 didn't slow the descent. So why did these women take such drastic control of their fertility back then, and why did it increase from 1990? The story is almost certainly rooted in changes in work, social changes, a precipitous fall in religious observation and marriage and Govt policies.

I agree. Any rapid change in social behaviour provokes curiosity. Here's a couple of charts, the first for Maori and the second for all births:

The second chart shows the same pattern occurring across all females. Maori just dropped from larger family size.

Women took control because they could. Maori and non-Maori.

They flowed into the workforce looking for better living standards. Infant mortality was dropping so fewer births were needed as  'replacements'. Abortion was easier to access. Family benefit was constantly decreasing in real value. Marriages were ending faster. Woman were increasingly marrying older reducing their child-bearing window of opportunity.

Effect of the DPB is at the margins, but possibly apparent during the (recessionary) 1990s for Maori fertility.

Any other ideas?

(The fertility rate pre-1960 is also interesting reflecting WW1 and 11 and The Depression.)

CPAG attack John Key and Paula Bennett for promoting myths about sole parents and the DPB

Late last month the Child Poverty Action Group launched a report written by Virginia Dale, "Myths and Facts: Sole Parents and the DPB"  

Unpicking the myths ; "This  backgrounder  uses  examples  from  politicians  and  commentators  and  contrasts  their statements with factual data that is readily available from Government and other websites and publications. "

The 'myths' quoted are from John Key, Paula Bennett, Don Brash, myself and unnamed sources.

Let's work through it and check their 'facts'.

 Of these sole parents [all with dependent children], nearly 36% were in full time paid work, and 19% in part time paid work. These employment rates for sole parents are better than the UK and Australia, although just below the  OECD  average.

She has used OECD data from here.

NZ's rate is only "better" than the UK and Australia because the data is more recent (2008 versus 2005 and 2004 respectively.)

More recent OECD data (see slide 5 here) shows the UK and Australia with higher sole parent employment rates by 2009.

The majority (81.4%) of sole parents on the DPB are aged between 25 and 64 with 1.7% of individuals  making  up  the  18-19  age  brackets.

The percentage has consistently been between 2 and 3 but dropped to 1.7 percent after a few hundred teenage parents were moved onto the recently created Young Parent Payment. The writer used December 2012 statistics. If she'd contrasted December 2011 she would have found the percentage was 2.8 and wondered (perhaps) why it had suddenly dropped by 39 percent.

18 and 19 year-olds have never made up a large percent of the total DPB numbers because they represent just a narrow age-band. Looked at differently, the higher percentage that 18-19 year-olds constitute, the better. That would mean they are leaving the DPB sooner. She has also ignored 16 and 17 year-old single parents.

 Myth 1: Breeding for a business
[Labour’s policy has led to] the situation where people have been, for want of a better term, breeding for a business. John Key, 2002

There  is  no  evidence  that  anyone  ‘breeds  for  a  business’  or  that imposing  work  obligations  change  fertility  outcomes.  Relationship  breakdown  is  a  major cause of women becoming sole parents. At the 2006 Census, two thirds of sole parents had  been  previously  married  or  in  a  civil  union.

This claim is astonishing. I checked her source for this and found it came from a Waikato University Facts sheet "Sole Parents, Teenage Fertility and Ex-nuptial Fertility."

Of the two thirds referred to above

o   8 per cent were still married (median age 43 years)
o   20 per cent were separated (median age 43 years)
o   24 per cent were divorced (median age 46 years)
o   13 per cent were widowed (median age 63 years)

So if at 2006 your elderly Mum was alive but your Dad has passed away, she'll be in this group of 'sole parents'? Look at the median ages. These are not generally sole parents with young dependent children and as such are totally unrelated to the DPB. I'm utterly flabbergasted by this University-produced fact sheet (and explored it further here). What are elderly widows and middle-aged divorcees doing on a fact sheet related to sole parents, teenage fertility and ex-nuptial fertility? Unbelievable.

The median age of those on the DPB is 32. The median age of sole mothers who had never married or been in a civil union is 33. There's correlation.

 When  a  spouse  dies,  or  the  relationship becomes violent, access to the DPB contributes to the protection and well-being of the child.

Small point but when a spouse dies the widow has access to the widow's benefit - not the DPB (although that will soon change.)

...employment levels among sole parents move with the overall state of the economy. In the mid-2000s when there were increasing general levels of employment, there was a marked increase in the employment rate of sole parents. The numbers on the DPB fell. This ‘gain’ disappeared when the onset of the recession in 2008 led to rising unemployment.

Yes, but when NZ had the lowest unemployment rate in the developed world, December 2007, there were still 98,154 people drawing the DPB. Most, but not all, were single parents.

Now the writer cites one of my blog posts:

Myth 4: DPB pays more than the average female worker’s wage

DPB pays more than average female worker’s income...choosing motherhood over work is entirely economically rational. Lindsay Mitchell, Welfare Commentator, 2010

Her link from the paper to my blog does not work because the final 'l' has been omitted. Intentional? But here is the post she refers to and I stand by. It shows that the average weekly earnings for a female in 2010 were $519  whereas someone living on the DPB in Auckland with two children was receiving $580.

Lindsay Mitchell appears to be adding on things like the accommodation supplement and Working for Families: The net basic rate for the DPB of $293.58 (2012) with an extra $92 for the first child and $65 for the second from Working for Families. The accommodation supplement will only meet part of her housing costs, now much greater as she has children. 

 I used the official MSD figure of $580 which obviously includes all top-ups to the basic rate.

 This myth directly contradicts the myth that ‘work is the way out of poverty’.

No it doesn't. Firstly jobs change. People join an organisation and move up or work more hours. But perhaps even more importantly, work, and associated environments, are often where people meet new partners. Forming relationships and sharing costs is another way out of poverty.

Myth 5: Welfare traps people in poverty

[The Welfare System] de-motivates and traps people who are perfectly capable of being independent. Lindsay Mitchell, Welfare Commentator (2010).
Facts: 
There is no evidence for the claim that welfare demotivates those who receive it. It is equally likely that the experience of being on welfare is sufficiently awful to provide an incentive to move into work at the earliest opportunity. The problem is availability of good secure full-time work .The Beneficiary numbers move in line with the general state of the economy, that is, when  employment  is  available,  beneficiary  numbers  decrease.  This  would  not  happen  if people were ‘trapped’ on welfare.

As mentioned above the numbers on the DPB did not drop substantially when the economy improved. Unemployment benefit numbers did but that's not what this paper is about. The writer doesn't disprove that those who remained on welfare during the economic boom weren't trapped. In any case she goes on to talk about the high effective marginal tax rates associated with trying to leave the DPB which I agree are a problem.

While the total numbers in receipt of the DPB may remain similar for long periods, there is a high turnover: 25% of those currently on the benefit have received DPB for under a year, 66% have been on it for less than four years, and only 10% have been on it for ten years.

 

These percentages relate only to 'current' spell. Many leave welfare and return and the clock starts afresh. When MSD researchers looked at sole parents on welfare at the end of 2005

·          just over half had spent at least 80% of the history period observed (the previous 10 years in most cases) supported by main benefits. I tire of this wilful misrepresentation of dependency duration.

Myth 11: DPB separates children from their fathers
The DPB has clearly contributed to many children growing up without fathers, often without even knowing who their father is. Past Leader of Act Party Don Brash, 2005.
 

Why describe Don Brash as past leader of the Act Party when the quote is taken from his time as leader of the National Party? Political bias is why.

Look I'm not even going to tackle this one. It is absurd to deny that the DPB hasn't affected the rate of single parenthood and subsequently, the number of children who grow up without a father in situ or possibly unknown to the child. There is ample international evidence to the effect that the level of welfare payment correlates with the rate of single parenthood. If fathers aren't substantively financially supporting their child or their child's mother  it's a fair assumption that some, if not many, aren't around at all.

I note that CPAG has not pushed this paper hard. It only came to my attention when I visited the Auckland Action Against Poverty site this morning to see what they are saying about the welfare reforms legislated last night.

If I am guilty of promoting myths, the CPAG is even more so.

Most newborns born onto welfare are Maori

Continuing with Sunday's theme of the gradual decline of the financially independent, working, two-parent, Maori family the chart below shows that 59 percent of newborns added to an existing benefit, usually the DPB, are Maori:

The data is sourced from a cabinet paper.

It represents 4,800 newborns - a five year average over 2006-2010.

The count includes newborns added from the date of their birth,  to a benefit that has been in place for 42 weeks or more, and where there are older children.

Interestingly the paper suggests reduced employment opportunities for men are lessening the likelihood they'll be a family breadwinner. But Pacific people have higher unemployment than Maori and are not particularly over-represented in either their share of the DPB (10 percent)  or the rate of adding children (12 percent).

So that's a crock.


Then over the course of the year in which they are born, many more babies will go onto a newly granted benefit resulting in 21 percent of all babies being dependent by year-end.

I seriously stuffed up

My apologies to the Herald. I misread their reporting on the latest welfare reforms. Too much haste. On returning from walking the dogs I re-read my post and realised MY mistake.  Hang head in shame.

On faith versus fact

Yesterday someone made an absurd (and irrelevant to the post) claim:

The fact that Maori birthrates are higher is not an indication that they are more promiscuous. But more an indication that non-maori have more abortions.
Teenage pregnancy rates are exactly the same.
Teenage birth rates are different because of NZ European Abortion rates... Who is worse - someone who has a baby as a teenager or someone who murders an unborn..?

What I wonder about is where this sort of thinking comes from? In this day and age it is very easy to check the veracity of your claim before making it. But I suspect this man, young man (?) has latched on to an idea that suits his ideology - anti-abortionism -  and never felt a desire to question or doubt it. Perhaps he'd gotten the idea from a source he trusted.

It recalled an ocassion which taught me to be more thorough. I was giving a presentation on the US welfare reforms and a catholic attendee stood up and claimed the reforms had pushed up the abortion rate. I thought she was wrong but wasn't 100 percent certain. She repeated it as absolute fact. As I was prepared to admit I didn't know and she was adamant she did, I came off the worse in terms of credibility.

I contacted her later to say she had in fact got it wrong. But the damage was done. She'd won support for her objection by being dishonest but resolute.

Anyway, for Ben, if he comes back, here's a scan from a paper amongst my files. It's 1997 but the relative teenage fertility  patterns have not changed substantially.

Tax avoiders bad: tax takers good?

Mark Hubbard drew my attention to a post about tax avoidance by Massey University tax lecturer Deborah Russell:

Despite everything you might hear, most New Zealanders mostly pay their taxes, on time and in full. We’ve got a very good compliance rate here. Somewhere between 80% and 90% of taxpayers pay their tax on time, and over 60% file their returns on time.

Like we have any option? The case for citizen buy-in is impossible to assess or prove when the law forbids choice.

People who won’t pay their taxes free ride on other New Zealanders.
Tax aoviders not only free ride on other New Zealanders, but they undermine the whole tax system. Tax compliance is a trust game: if people think that other people comply with tax law, then they are more inclined to do so themselves. But if they think that other people are rorting the system, and not paying taxes, and squirreling money away, then they lose confidence in the system, and start to avoid paying taxes themselves. The reasoning is straightforward: who wants to be the only schmuck left.

This interests me because it's exactly the same thought process I've heard blamed for benefit exploitation in Europe. The reason for the decades-long increase in people relying on state hand-outs is attributed to progressive capitulation from those thinking, "If you can't beat them, join them." The more normalised living off the state becomes, the greater the benefit uptake will be.

The one defense that these tax avoiders might try is that their activities are perfectly legal...But even if the procedures used are legal, it’s not clear that they are ethically acceptable. This is in fact the closest I can get to understanding exactly what a rort is: it’s something that is technically legal, but nevertheless pushes the law to such an extent that it is immoral.

Again the "perfectly legal" tax avoidance defence has its parallel with the 'perfectly entitled' tax take defence. Many have become far more concerned with legal entitlement to benefits than moral.

But look what follows:

We’ve heard a great deal of nasty rhetoric about people on benefits in recent years, but very little about the scungy behaviour of tax avoiders and tax evaders.

By Russell's logic, we should be hearing "nasty rhetoric about people on benefits" if the behaviour of tax avoiders and evaders is also "scungy". If people who don't pay tax are "free riding" so too are those who take it when they do not need to.

The problem is both groups are failing to accept her "common good" philosophy.

This isn't a defence of greed or laziness. But without the "common good" ends realised only via state force, those character traits would be visited upon their bearers - not you and I.

That portrait of Margaret

Back in my 'student' days, art student that is, back when I was reasonably apolitical, I wanted to paint a large scale portrait of someone famous. It was an exercise in capturing a likeness really. I can't recall why or where but I came accross this amazing photo of Margaret Thatcher back in the 'big hair' days.  It was the composition that drew me in; that and the expression in her eyes. Now I wouldn't even know where to find the original image though a google search might locate it.

It seems to me it could do with a few more coats and is far more detailed than anything I'd produce today. It lacks weight. Perhaps, typically, I lost interest when it came to the clothing. But I wasn't displeased with it at the time.

Of course it unleashed a few derisive sneers and raised eyebrows amongst some of my folk. Not for the attempted grandness but because I grew up in a 1960s Labour household where Harold Wilson had been loved, like Mickey Savage. Benevolent Harry and his lovely labradors I remember.

My parents hated Thatcher. Or that's what I recall. Though I never knew or cared why. They just gave me the overwhelming impression that she was callous and hard. As children, even young adults, do, I believed them without giving it very much thought.

Later though realised what an amazingly determined and steely character she was. And of course I came to understand and believe in the same political and philosophical values she espoused - free markets and individualism. "There is no such thing as society..." doesn't mean every man is an island. It means that in the final analysis any true right or responsibility lies with the individual. Assign them to groups and they cause conflict.

So I dragged out my portrait today and we'll have it sitting on the mantelpiece in her honour. RIP Maggie.

4 in 5 Maori children born outside marriage

The earliest statistics kept on Maori ex-nuptial births were in 1968. The percentage of Maori children born outside marriage would have been even lower pre-1968.

Does marriage matter? Of course it does. Married people tend to be wealthier, are more likely to stay together, and provide their children with greater security and opportunity. A great deal of Maori disadvantage is due to the picture below.