ACT Conference 2016

I've agreed to speak at the next ACT Party conference three weeks today. I'll cover what's been happening in welfare - the good and the bad - and  what further reform could look like.

Here's a list of speakers, all of whom I am keen to hear.

Further details

Growth in psych conditions in the welfare system

Here's a tidy illustration of a phenomenon I occasionally blog about; the growing incidence of benefit dependence due to psychiatric or psychological conditions.

The blue line is the old sickness benefit; the green line, the invalid benefit.

The total number at June 2015 was 53,611.

At March 1999 the total was 24,194.

A 121% increase compared to a total population increase of around 21%.

More sickness? More diagnosis? Whatever the driver, it's actually a problem for the Ministry of Health to address yet its MSD that bears the budgetary implications.

The sky is falling ... not

Just reflecting on the back of yesterday's post, it must cause just a little bit of discomfit for politicians when they get it so wrong. No? I guess that if it did, they wouldn't be in the game.

November 2015

"New Zealand’s unemployment rate is now worse than Australia’s – an economy described as ‘fast becoming a basket case’, Labour Finance spokesperson Grant Robertson says.

“Last night Australia’s new figures put unemployment at 5.9 per cent. New Zealand’s is 6 per cent.

“Australia’s economy has been going through extremely difficult times of late. It has been a rapid downturn for a once-thriving economy.

“New Zealand has experienced a sustained period of economic growth that is now falling away. We should be doing much better than Australia. There is no way our unemployment rate should be higher than the across the Tasman.

“John Key and Bill English always blame overseas economic factors and turbulent times. But the GFC is over and other countries are doing much better. Britain, Australia and the US all have unemployment levels below 6 per cent and falling. New Zealand’s is forecast to top 7 per cent.share on twitter

“The stark truth is National hasn’t been able to turn growth into jobs. Now the economy is going downhill opportunities will be even harder to come by, even for those with jobs.

“This isn’t the Kiwi dream. It’s getting harder and harder to get into work or find a better job. Behind these figures are real people with families to support and ambitions to fulfil.

“National is failing them,” Grant Robertson said.

And just for good measure here he is talking to the Labour Party conference:


"151,000 New Zealanders are out of work, and the rate of unemployment is six per cent, with projections that it will head towards seven per cent next year. 151,000 people.  Think about that.  It is nearly twice the population of this city out of work.  It is nearly 50,000 more than when National took office.  In Gisborne one in every ten people is out of work. It is clear that John Key and Bill English see levels of unemployment like this as collateral damage in their blinkered economic vision."

Good fall in unemployment rate

Statistics NZ is reporting the unemployment rate has dropped to 5.3%.

It was 6 percent in the September 2015 quarter.

This is the lowest unemployment rate since March 2009.

A quick round-up from tables:


Female unemployment dropped more than male

Big fall for the 20-24 age group but small rise for 15-19

Drops for all ethnicities especially Pacific falling from 13.1 to 9.7%

Big fall in Northland from 8.2 to 6.2%

Only region showing an increase - 4.2 to 4.5% - is Otago

Ag, forestry and fishing recorded biggest employment increase in terms of numbers, followed very closely by construction

Internationally NZ moves from ranking 15th to 10th= in OECD


Bad news for Labour.

Unemployment has been considered one of National's few points of vulnerability.

Inter generational benefit receipt

These pie graphs show the percentage of beneficiaries aged 16-17 who had a parent(s) who were also on welfare.

For instance 56% of Maori beneficiaries aged 16-17 had been reliant on their parent's benefit for more than 80 percent of their teenage years.

For the large majority of all clients they had a parent  who had spent time receiving welfare.

Conversely only 7% had no match to parental receipt.

I suppose the left would call this the transmission of disadvantage.  It is also the transmission of values and expectations.

(Caution: I expect that in among this group will be young people with physical and intellectual disabilities whose parent has been receiving a benefit to provide care for them. These young people make up 23% of the total.)

Source

Ex Aussie prisoners emulate NZ criminals

Front page headline in DomPost reads,

Third of crims sent home now reoffending

30 percent to be precise. That's entirely predictable.

Pretty much on the rate for those released from NZ prisons. Australian prisons do no better at rehabilitation it would seem.

Additionally, the police say they expect the re-offending rates to "soar".

That, unfortunately, is what recidivism rates do.

It's not until the last sentence of the report that we learn,

"[Amy] Adams said the latest police figures were in line with New Zealand prisoner's general offending rates."

I guess it is easier to get people outraged about the ex-Aussies than our homegrown variety.

(If you wonder why I not infrequently blog about the prison population it's because of the strong correlation with welfare. As described in the latest Taylor Fry report:

"Offenders who have been convicted of a crime and served some type of criminal sentence are heavily over-represented in the welfare population.
· About a quarter of the 2014/15 beneficiary population have had a criminal conviction in their past; for males it is 4 in 10.
One in ten welfare clients has been to prison and one in ten has been convicted of a violence-related crime.
· There is a strong statistical relationship between clients who have been convicted and served a
sentence and long-term benefit receipt.")

Stark example of forced minimum wage hikes

The closure of many Wal-mart stores (with the re-establishment of new ones simultaneously) seems to provide very practical evidence of what happens when minimum wages are legislated too high.

Where the minimum wage was raised to $12.55 in Oakland, California the store closed. In the nearby city of San Leandro the minimum wage is $10 and the stores stayed open.

The difference between these three locations is the Oakland Wal-Mart has over a 25 percent difference in labor costs for entry-level employees than the San Leandro locations, says Mark Perry, an American Enterprise Institute scholar and professor of economics and finance at the University of Michigan’s Flint campus.
“Given the reality that Wal-Mart operates on razor-thin profit margins (only 2.8 percent last quarter), a 25 percent difference in labor costs for entry-level workers can be the difference between a store that turns a profit and a store that barely breaks even, or loses money,” Perry wrote.

A research fellow from the Heritage Foundation observes:

 “The true minimum wage is $0.00 an hour, Companies do not have to hire workers, and they will not pay them more than the value they create.”

That's the reality of the private sector.

Hence the movement for higher minimum or  living wages has now focused on the public sector where  economic facts take a back seat to forced wealth redistribution ideology.