Saturday, April 12, 2014

ACT 2014 policies

Not long ago ACT still had 2011 policies posted at their website. Now they have replaced them with a concise two paragraph overview in each area. Nobody has prompted me to them.

For instance, Welfare and Family:

ACT believes that the welfare system New Zealand developed from the 1970s onward has been a social and economic disaster.  While the intention of reducing hardship was noble, the incentive effects of the system have overwhelmed the resource provision effects.  The policies have led to dependency and indignity for hundreds of thousands of New Zealanders, with an intergenerational dimension.
ACT supports the current government’s initiatives to shift welfare from a paradigm of open-ended provision and resulting dependence to one of mutual obligation.  ACT would continue this process by reducing effective marginal tax rates for those shifting from welfare to work, outsourcing rehabilitation functions to private providers, putting lifetime limits on all welfare eligibility including Sole Parent Support, cracking down on benefit fraud, and scrapping the minimum wage.

There is a problem with putting "lifetime limits on all welfare." A small percentage of people have some form of mental or physical disability that precludes them from self-support, for some or most of their lifetime. But I can agree with lifetime limits on anybody outside of this group.

"Scrapping the minimum wage" would hopefully be accompanied by a taxfree threshold. That could be set at a level which would also enable "reducing effective marginal tax rates for those shifting from welfare to work." Otherwise achieving the second is very tricky indeed.

Here's Education:

ACT believes that education at this level is an investment in human capital that the government rightly makes.  However, the delivery of the service has been captured, at the primary, intermediate, and secondary levels at least, by a providing bureaucracy that limits choice and innovation for the purpose of self-preservation.
ACT believes that state education funding should be seen primarily as an asset of the parent and child, to be used at a school, public or private, of their choice.  ACT would diminish the role of the Ministry of Education in allocating resources, separate the property ownership role of the Ministry from the operations role, make Boards of Trustees more autonomous in their governorship of schools, introduce better mechanisms for State and Integrated schools to expand and contract according to demand, and increase the subsidy to private schools to the extent that it is expenditure neutral. 

Imagine the howls of outrage at the proposal to  increase the subsidy to private schools. But if that enables private schools to expand their rolls with a corresponding reduction in public school numbers (hence neutral expenditure change) that's a progression away from the state's near-monopoly. This policy is the headline grabber. The unions will ensure that.

One more for now. Immigration:

 ACT is and always has been the pro-immigration party.  ACT believes that immigration is a part of our natural heritage, and should continue to be so.  However, ACT also believes that government policy should seek to ensure that immigration remains a good deal for the domestic population.  To this end ACT supports the points system for new immigrants, ensuring that immigrants have readier access to work and do not have easy access to welfare, and lowering the tax burden so that the best immigrants may be attracted.  ACT is also committed to monitoring the emerging literature that suggests immigration may make the domestic population poorer through a process of capital widening.
All good with me but pleased to see that addendum about monitoring the effect on the socio economic status of the domestic population though "capital widening" may be unavoidable and only curbed by limiting immigration. The antithesis of the original  intent. But in general we don't do enough monitoring of policy.

BTW, the OECD 2014 Society at a Glance had a really interesting graph showing how NZ stacks up in terms of its foreign-born population, "our natural heritage". Almost one in four (23.6%) residents was born overseas. Up from about 18 percent in 2001. Very high in OECD terms.

NZ no longer leads western world in sole parent benefit dependency?

It used to. And if you look at the latest OECD graph below (NZ data from June 2013) you'd think it still did.

The brown bar is 'lone parents'. (Unemployment assistance does not feature on this graph as it is considered 'primary'. Check out the link for more information).

For NZ the number is 3.7 percent. Australia follows with 3.3 percent, then Iceland with 3.2%. Before their welfare reforms the US probably would have outdone NZ. (The Ireland bar is suspect. They have quite a high number of sole parents supported by the state. Clue.)

3.7 percent may not seem like a huge proportion but from it flows other matters which are very important like child poverty, ill-health and under-achievement. Matters which will be highly influential in the election this year.

BUT National can spin a good news story here.

By December 2013 the percentage had dropped to 2.8%.

How come?

The balance were moved onto 'primary' out-of-work assistance. Jobseeker Support.

They disappear off the graph.

More dubious inequality claims

Research from the NZ Council of Christian Social Services (or the journalist who wrote the article)  reported in the NZ Herald, relies on 2007 - 2010 data (see below)
The OECD report says household income in New Zealand has suffered a "large decline" since 2008 - NZ was put in the same basket for income as Mexico, Spain, Estonia and Greece.

But our own latest household income data shows rises since:  

  And the rises are across all income bands:


Still as the journalist was happy to rely on outdated OECD data I wonder why he didn't include this one?

Because between 2007 and 2010 inequality actually reduced and that doesn't fit with the story (which just highlights the inherent nonsense in inequality data. If the rich take a hit - surely what the envyists want - and the poorest stay on CPI/wage proofed state incomes, inequality reduces.)