Friday, November 02, 2018

Increased cash hand-outs reduce incentive to work

Seems obvious to you and I, but a fact that the Left has long resisted. Their response is always to indignantly insist, "...people want to work."

But MSD doesn't necessarily agree. At least the actuarial arm which produces an annual Benefit System Performance Report.

Below is a graph tracking exit rates among Jobseeker-Work Ready (JS/WR) beneficiaries. The associated commentary notes that recent exit rates are lower than during the GFC!

But notice also the bold type sentence below the graph. Paying those JS beneficiaries with children MORE has reduced their exits off welfare.

This slowing exit rate is further broken down into with or without children:

The report goes on to state:

 Establishing causality is difficult, though the widening of the gap appears to correlate with the introduction of the Child Material Hardship Package (CMHP) in April 2016. Benefit rates were increased by $25 for families as part of this package. 

It then speculates:

 Changes to the accommodation supplement from 1 April 2018 could have similar effects, although accommodation supplement is also available to low income families.
It doesn't mention the significant increase to Family Tax Credits (including the Best Start $60 weekly baby bonus) from July 2018 but presumably the same applies.

Further into the performance report comes another gem of commonsense:

IRRS is more generous than AS and can act as a poverty trap.
This means that Income Related Rents - whereby the state house tenant only ever pays a fixed percentage of his income - is a more generous subsidy than paying part of a tenant's rent in the private sector. 

The "poverty trap" describes what happens when the tenant is disincentivised to improve his income (through employment) because he will lose a substantial portion in increased rent. It's similar to the disincentive Child Support imposes. Not infrequently the two disincentives coincide.

There is a very real concern that state housing turnover has slowed up considerably due at least in part to this 'generosity' (causing lengthening waiting lists and recourse to emergency accommodation.)

This sentiment is reiterated later:

In previous reports we highlighted that the design of IRRS, AS and TAS creates financial disincentives for clients to move out of public housing and into the private market and employment.

Yet greater generosity of benefits and other assistance is synonymous with the current government which steadfastly ignores that the associated disincentives come at a devastating social cost, particular to children.

The socialist approach to alleviating poverty merely entrenches it.

Thursday, November 01, 2018

Travesty over child poverty stats breaks at last

NZ Herald reports today:

Child poverty rates unknown as targets about to become law

I blogged about this over 2 weeks ago but far more 'important' issues have dominated. A fine example of how personality politics suppress matters of important policy.

This is the PM's priority policy. And it's based on statistics. It's bad enough that relativity defines 'poverty' but when the relativity is not even reliably measured, policy only deteriorates from bad to worse.

Wednesday, October 31, 2018

Graph of the Day

(The first bar is 2017; the second, 2018)

Maori now account for the highest share of Jobseeker dependence, reflected in the regional differences.

MSD comments:
We can and must do better to support Māori clients. While there are many programmes and services that are successful in achieving positive outcomes for Māori clients, the outcomes gap between Māori and non-Māori is getting worse. 


Monday, October 29, 2018


MSD has rewritten the old Social Security Act. Today they publish some legislative terminology changes.

Old term     
Attention and supervision substantially in excess of that normally required 
New term
Substantially more attention and supervision than is normally required.
Reason (for change)
Plain English


Old term
Normal functions
New term
Everyday functions
More inclusive language
Is 'normal' ok or not? Probably not but you can't say 'everydayly'.

What concerns me is the time and expense that went into the exercise bearing in mind:

The new Act replaces some outdated terms with more inclusive language and plain English. MSD is updating all its websites, forms and letters with the new terms.

Heavens to Murgatroyd!!

Yikes. That dated expression should no doubt also be 'updated'.

Any ideas for a 'plain English' or 'inclusive' alternative??

Nailing it

Final paragraph from this week's Free Press, ACT's weekly email newsletter nails it:

New Zealand’s real problems are not identity politics, no matter what the left may think. They are that the welfare state has failed. Too many kids don’t get educated. Too many working aged adults are on welfare. Too many are in jail because there is too much crime and they’re never rehabilitated. Housing has gone from a commodity to a ponzi scheme. Our productivity growth is anaemic. With government's and councils’ approach to regulation, it’s amazing anyone still does anything. That’s why we need an ACT Party in New Zealand.