Friday, December 13, 2013

CIR Asset sales referendum result

A third say YES. Good result. Probably reasonably representative. A minority of National voters didn't want the sales. Nothing to see here. Waste of time and money.

Preliminary Results of Citizens Initiated Referendum

Media releases
The Electoral Commission has released the preliminary result of the Citizens Initiated Referendum on the question Do you support the Government selling up to 49% of Meridian Energy, Mighty River Power, Genesis Power, Solid Energy and Air New Zealand?”
2013 Citizens Initiated Referendum Preliminary Result
Number of Votes Received
Percentage of Total Valid Votes
For the response
For the response
Informal votes*
Total valid votes

RNZ panel discussion about poverty

Radio NZ invited me to participate in Jim Mora's panel discussion on poverty today. I would have loved to address David's Slack's lead-in comments about "intelligent redistribution" and the American experience but that would have used up too much limited time. Starts at 11:00.

"The politics of empirical truths"

This piece, by Peter Saunders, resonated with me and probably will with you:
The politics of empirical truthsidea3

In a lecture delivered at Munich University in 1918, the great German sociologist, Max Weber, outlined the qualities required by anyone considering a career in politics. He ended with this warning: 'Only he has the calling for politics who is sure that he shall not crumble when the world from his point of view is too stupid or too base for what he wants to offer.'
That counts me out, then.

Having spent the last 14 years working for public policy think tanks in Australia and Britain, I have become increasingly frustrated by the 'stupidity and baseness' of politicians who refuse to acknowledge awkward empirical truths. Even when, occasionally, a politician summons up the courage to tell people facts they would rather not hear, he or she immediately comes under pressure to withdraw their comment, and even apologise for it.  

Rod Liddle recently offered one example in the UK edition of The Spectator. He highlighted an apology issued by the Attorney General, Dominic Grieve, who had warned of a culture of 'endemic corruption' in certain Asian countries (notably Pakistan) from which many British ethnic minorities originate. As Liddle showed, Grieve's warning was fully justified, for Pakistan is one of the most corrupt countries in the world, and the UK Electoral Commission has expressed concern about bribery and vote-buying in certain Pakistani communities in Britain. But although he was right, Grieve issued a grovelling apology.

This problem of thought crime and self-censorship is not limited to issues of race and ethnicity. It extends to discussion of gender and class differences too.

Last week, for example, a UKIP Member of the European Parliament, Stuart Agnew, was censured by his own party after claiming that men outnumber women in top jobs partly because many women choose child-rearing over career building. But he was right. A 2009 survey found only 12% of British mothers want to work full-time, and a 2008 report found two-thirds of working mums would still want to reduce their hours even if improved child care were made available. In Norway, where mothers can choose between free child care (if they continue working) or cash payments in lieu (if they raise their children at home), four-fifths choose to stay home.

Again last week, the Mayor of London, Boris Johnson, landed in hot water for pointing out that one reason upward social mobility is not more extensive is that some people lack the intelligence needed to perform high-level jobs. Again, he's right - this is something I have been documenting for the last 20 years, and Boris is the first prominent politician in all that time to acknowledge it. But in politics, evidence is often irrelevant. Deputy Prime Minister, 
Nick Clegg, attacked Boris for his 'unpleasant, careless elitism,' Cameron hastily distanced himself from him, and the BBC and newspaper journalists declared open season on him for several days afterwards.

Max Weber wouldn't have been surprised by any of this. He taught that political leadership is about charisma, the mobilisation of emotion among your followers. Evidence can be left to faceless bureaucrats. Populist leaders in search of votes work on sentiment.

If like the CIS, you are in the business of shifting policy agendas through appeal to evidence and reason, this emphasis on emotion and sentiment can represent a major frustration. But as Weber concluded in his Munich lecture: 'Only he who in the face of all this can say 'In spite of all!' has the calling for politics.' 

Peter Saunders is a Senior Fellow at The Centre for Independent Studies. 

Thursday, December 12, 2013

Paid parental leave extension unwarranted

Media Release


Thursday, December 12, 2013

The government is reportedly reconsidering its opposition to extending Paid Parental Leave from 14  to 26 weeks. This comes despite Treasury advice that there would be "minimal benefit from increasing the length of parental leave."

Welfare commentator Lindsay Mitchell said last year Treasury analysed who was using paid parental leave, labour market outcomes, and child health outcomes. It found that, "...there is not a strong evidence-based argument to support extending the length of paid parent leave."

Treasury's report states, "...the majority of mothers return to work when the baby is six months old...". Marginal benefits to labour market participation and child health and well-being would therefore be small. Additionally, it notes, "...the most vulnerable children are likely born into families where parents are not eligible for paid parental leave...".

In a discussion about improving income adequacy it found that the arguments are "weak" as "the current access group are likely to be middle and high income women with stable employment." Of the 32,000 paid parental leave recipients in 2011/12, 58 percent were earning over $40,000; 27 percent were earning over $60,000.

Treasury also noted a possible negative impact for employers, particularly small to medium enterprises, as their costs are, "...likely to be more significant as the length of parental leave increases." This could give rise to greater discrimination against child-bearing age females in the labour market.

The implementation of 26 weeks  Paid Parental Leave will cost $327 million by 2015/16. Unchanged, the cost would be $176 million in 2015/16.  An annual increased expenditure of $151 million for "minimal benefit" seems highly questionable. The benefit to the government may lie in gaining electoral favour in 2014.

Wednesday, December 11, 2013

The Nats buy votes too

The government now appears to be entertaining Labour MP Sue Moroney's Bill to extend Paid Parental Leave from 14 to 26 weeks.

Opinion polls have shown strong support for extending paid parental leave.

In a nutshell, most parents with newborns already stay off work for 6 months. They fund the difference themselves. That's because they can afford to.

If Bill English approves this it's a middle-class handout. A vote-buyer. Nothing more, nothing less.

DomPost letters

Tuesday, December 10, 2013

Jacinda Ardern and red herrings

Labour's Jacinda Ardern to Paula Bennett in parliament today:

Jacinda Ardern: What will her Government do to address low wage rates in New Zealand, given that 40 percent of the children living in poverty are being cared for by adults in paid work but who are still not earning enough to survive?

1/ Clearly they are surviving.

2/ Being pedantic, around 6 percent of children  'living in poverty' have parents who receive income from benefits and work.  34 percent receive incomes from work alone. But even they are getting more in tax credits etc than they are paying in tax. The government is already addressing low wage rates.

3/ This is the important point.

The 265,000 children (living in households receiving less than 60 percent of the equivalised  median household income after housing costs) are not all experiencing hardship (as measured by the Living Standards survey.)

That's because the income data is derived from a sample survey of 3,500 declaring their annual income.

Some families experience a year of low income for a variety of reasons. Unemployment, fewer contracts, a new business start-up, illness, accident, relationship break-up etc. BUT they do have savings and assets to draw on. That is partly why less than half of the 265,000 children 'living in poverty' are actually experiencing hardship.

Ardern's question is designed to shift attention from beneficiary families to working families. But children in working families will (generally) only experience transitory or temporary 'poverty'. They are not affected in the lifelong way that children who spend most of their childhoods in beneficiary families are.

Monday, December 09, 2013

Talking Child Poverty on Newstalk ZB

On NewstalkZB earlier this evening talking to Tim Dower about the latest Child Poverty report.

One of the e-mails that Tim read out later was, he said, representative of  "a developing theme". It said,

"I assume extreme poverty is being able to afford Sky Sport but not Sky Movies."

I didn't support the line that there is no poverty. I've seen kids in houses where they get sick because of crowding and unhealthy, unhygienic surroundings. Probably the same house has Sky.  But  the chronic poverty of benefit dependence exists. It's spirit and soul sapping.

Children's Commissioner Child Poverty Report

Some of the data from the forthcoming report is depicted at this site. This is their graph for the trend.

Another graphic shows that 51% of the children in poverty live in single parent families.

Here's a graph showing the number of single parents families over a similar period.

Again, the subsidisation of single parent families has been a major contributor to the growth in the numbers of children living in poverty.

And the best answer the Children's Commissioner can come up with is more subsidisation.

An unrepresented constituency?

A NZ Herald editorial begins,

There will always be a constituency for the Act Party's founding principles of individual freedom, personal responsibility, small government and lower taxes.
It does my heart good to see those principles re-stated. Unfortunately the writer goes on to enumerate the many problems that have faced the party over the years and concludes a come-back is unlikely.

So the constiuency that "will always be", which I believe is bigger than ACT's best result would indicate, will essentially go unrepresented in parliament?

I hope not.

Sunday, December 08, 2013

"Blaming parents is pointless"

The Children's Commissioner is about to publish an apparently "shocking" report about the increasing number of admissions to hospital for "poverty-related illnesses". The Herald on Sunday editorialises,

"Child poverty should not exist in this country. Blaming parents is pointless."
 What or who then should be blamed?

A few weeks back I wrote something about this question. It was published on Breaking Views so apologies if you have already seen it.

 Without doubt one of next year's major election issues will be child poverty. Most of the voices heard on this issue, including the Children's Commissioner, blame the problem on inadequate wealth redistribution. Either wages or benefits are too low. Child poverty is therefore a product of the collective economic system and solving it becomes the responsibility of government.
I disagree. We are commonly told that approximately 270,000 children live in homes with incomes that fall below 60 percent of the median household income. Less focus goes on who these children are and why their parents are poor.

Around two thirds live in benefit-dependent homes; of those, around three quarters live with a sole parent. Yes, there are poor children with working parents but the poverty they experience tends to be temporary versus chronic. Their parents may experience short-term unemployment, or fewer working hours, especially during a recession but poverty is not entrenched. This scenario is quite different to that experienced by children who are born onto a benefit and spend much of their childhood there.

More than one in five children in New Zealand will be dependent on a benefit by the end of their birth year. The percentage improves only slightly in good economic times and worsens during bad. Because of the rapidity of the recourse to welfare it can be no surprise to most of their parents that their child would be born into economically difficult circumstances.

Over the years these children accumulate in the child poverty statistics. As Treasury observes…"around 1 in 5 children will spend more than half of their first 14 years in  a household supported by a main benefit."  So what began as a fifth of all children born in any given year extends out to become at fifth of all children at any given time.

This phenomenon is the main contributor to New Zealand's much publicised child poverty problem. The results of this reproductive pattern of behaviour get discussed broadly, but the behaviour itself is largely ignored. The misdiagnosis of the child poverty affliction leads to the wrong treatment, or at least calls for the wrong treatment.

For instance, in 2011 Labour and the Greens both proposed increasing welfare payments by paying the In Work Tax Credit to beneficiary parents. This would produce a short-term effect of increasing incomes but risks drawing more children onto welfare as the gap between wages and benefits, already very narrow, becomes non-existent. Internationally, attempting to reduce poverty via the benefit system has been shown to increase the number of workless households. The solution to child poverty is not increasing the number of children dependent on the state.

The current government has taken steps to discourage people from viewing a sole parent benefit as a legitimate alternative source of income to employment. It needs to go further by setting clear time limits and re-framing welfare as emergency assistance. It is nevertheless on a better track towards reducing child poverty than any proposed by the potential alternative government.

Trying to achieve economic, and arguably even more important, emotional security for children through the benefit system is like trying to get rich playing the pokies. It's never going to happen.