NZ doesn't fit the mould

Apparently the US has a small welfare state because a majority of Americans believe that work is a determinant of success.

From the NCPA;

Capitalism, when combined with a relatively small government, is a well-established ticket to improved standards of living. However, many countries continue to oppose capitalism. The resistance of many countries to adopt capitalist economic systems has puzzled economists for decades, says Kevin A. Hassett, a senior fellow and the director of economic policy studies at the American Enterprise Institute.

In a recent study, economists Alberto Alesina, Edward Glaeser and Bruce Sacerdote found that pre-existing social attitudes toward luck may be the crucial determinant of the political path of a society. The authors uncovered a striking difference between American and European attitudes towards the poor:

* If you ask Americans whether they believe the poor are lazy, 60 percent agree.
* However, if you ask Europeans, only 26 percent say yes.

Historically, large welfare states have emerged in countries where citizens generally believe that luck determines income. According to the authors:

* If bad behavior (or laziness) is viewed as a source of poverty, then the welfare state is small.
* America has avoided the fate of Europe because its citizens disproportionately believe that luck is not that important a determinant of one's circumstances, but hard work is.
* If Americans are predisposed to believe that high incomes are generally merited, then they will be resistant to change.
* However, when capitalists succeed because of bribery and corruption, citizens become less convinced that the income distribution reflects merit, and are more willing to redistribute.

It takes more than luck to maintain a free society. If America is to avoid acquiring a welfare state the size of Europe's, the rule of law must be vigorously defended and the corrupt must be adequately punished, says Hassett.

But a recent NZ study found an even larger number of Kiwis blamed being poor on being lazy. A whopping 73 percent.

Yet New Zealand has become a large welfare state. The best reason I can come up with is that for decades now NZ has been 'ruled' by minority opinion. The special pleaders and anti-capitalists are running the show. The lobbyists are powerful and our parliament is not representative of how many New Zealanders feel about work and welfare. And political correctness has made people afraid to challenge the status quo.

Not the whole story

Susan St John, champion of welfare for children, telling us half the story,

Child Poverty Action Group economist Susan St John said the Budget made no effort to make it easier for beneficiaries to work by lifting the $80 a week limit on income they can earn before the benefit is reduced - a limit that had not changed for 22 years.

Limits for earned income have changed for those on the dole (who might also have dependent children.)

Until 1996 an unemployed person could receive the maximum benefit and earn NZ$50 (or $60 for beneficiaries with dependent children) a week before the benefit was abated. Under current arrangements an unemployed person can earn an income of $80 a week before the benefit is abated.

And although the $80 limit wasn't changed, for those on the DPB and WB, the amount of benefit lost between $81 and 180 was reduced from 70% to 30% for those with a youngest child over 14 in 2003. From the MSD press release,

This change to a social development approach is supported by the introduction of a new single abatement rate for DPB/WB clients allowing them to keep a greater proportion of any income they receive while on the benefit.

DPB/WB clients will be able to earn up to $80 a week on top of their benefit with no affect on their main benefit, and income between $80 and $180 reduces the benefit by 30 cents for every dollar received and by 70 cents for every dollar received over $180.

There are increases coming in the family support for beneficiaries with children. Family support is becoming a really big ticket item of government expenditure.

These are the figures from 2003-09 (actual to forecast)

$862 833 846 1,285 1,699 2,081 2,132

So as usual the CPAG are ignoring increases in assistance in order to strengthen their case for greater redistribution. Sadly it's what you come to expect from beneficiary advocacy groups.

Give parents and pupils choice

Flat tax and anti-smacking legislation

Sir Bob Jones was on Good Morning TV yesterday talking about tax, the Douglas era and how Roger's reforms were 'radical' in comparison to what was happening in the rest of the world. The Muldoon era of daylight robbery is discussed (actually 'discussed' isn't right - Bob thankfully does all the talking), the Laffer Curve effect, what's happening in Slovakia with their flat 10 percent tax, and why we should be following suit. It starts at 1:45.

(If you enjoyed Bob stay tuned for an announcement about my campaign launch where he will be guest speaker)

Then stick with the Good Morning (it soon won't be) and watch Beth Wood (Save the Children) and Ian Hassell (ex Children's Commissioner) argue with Bob McCoskrie (Family First) about the anti-smacking legislation. Quite teeth gritting stuff with the presenter clearly biased towards the proponents. This starts at 2:05.

Churches refuse to register as third parties

Thanks to a religious group getting involved in the 2005 election we are now lumbered with the ludicrous and unfathomable Electoral Finance Act.

Now more religious groups want to get involved in the 2008 campaign and are claiming the EFA does not apply to them and they will not be registering as a third party.

The churches are distributing 50,000 copies of the first of five leaflets, on child poverty, coinciding with the Budget this week.

Methodist Church president Brian Turner said the Electoral Commission recommended that they should "err on the side of caution" and register as third parties under the new Electoral Finance Act. But they decided not to.

"We don't see it as electioneering or promoting any particular party against others, so we didn't see the need to register," he said.

The same churches made it clear just weeks ago they want benefit levels raised. They are in the same camp as the CPAG who are backed in their legal action against the government by the Greens and the Maori Party.

The leaflets and 2500 posters are being sent this week to Anglican, Baptist, Catholic, Methodist, Presbyterian and Salvation Army churches under the auspices of their umbrella group, the Council of Christian Social Services.

The Council of Christian Social Services is very political. They make submissions to the Social Services Select Committee and they are traditionally left-wing.

I hope that the Electoral Commission is very fair-handed in administering this Act - if that is possible. But somehow I cannot imagine the churches being prosecuted. It makes me very unhappy to have to urge the application of rules with which I don't agree but then again the rules were supposed to bring about a level playing field and the churches should not be above them.

Not stacking up

I am a little perturbed by this front page story from today's DomPost.

Pacific Islanders' crime rates, poor education and low employment are creating an underclass and a drain on the economy, a study says.

Issued last week, the document says Polynesians are less productive and less likely to contribute to economic growth. They have the highest unemployment in every age group....

Not according to the Household Labour Force Survey. Maori have slightly higher rates.

Polynesians are over-represented in crime statistics and have higher rates of convictions and prosecutions.

Assuming Polynesians continues to mean Pacific Islanders, their crime rates are not especially high. In fact the article later disputes this saying,

Statistics NZ crime figures show Pacific Islanders made up 9100 of 112,774 people convicted in 2006 - just over 8 per cent.

8 percent is pretty much in keeping with their share of the population remembering that they are a young population and the age group that most commits crime is around 18-25.

Yes. Pacific rates of imprisonment are higher than European but considerably lower than Maori.



They are more likely to need Government assistance for housing and income.

More likely than who? Of those working age New Zealanders currently receiving a benefit 7.6 are Pacific. Again in keeping with their proportion of the overall population. (Maori on the other hand make-up 31.5 percent).

I would be the first to defend a researchers right to publish an ethnicity study without being subjectively attacked but on the basis of what has been reported I can understand why Pacific communities are angry about the focus on their people as producing an underclass.

AND, as with Maori, it must always be appreciated that many Pacific people are doing jobs that, although not well paid, are crucial to the functioning of our institutions.

UPDATE: Having listened to an interview with the study author I understand that the research is about different immigrant groups and their contribution to economic growth. But now I am even more concerned because the statistics are about ALL PI people, 60 percent of whom are not immigrants. He clearly believes that PI people are a drain and will become a bigger drain on social welfare but when asked specifically about those figures couldn't respond. His conclusion is that more PI immigrants should not be encouraged until the problems are sorted. They shouldn't be taking jobs off other low skilled people like Maori.

Why not? If they are more willing, if they have a work ethic, why not welcome them?

Serving up red herrings and victimhood for breakfast

Not unusually I can hear my husband loudly remarking "Silly b----h," at the TV.

I know in a minute he will put his head around the door and tell me about the latest display of mammoth intelligence from some hand-wringer.

"What's that about?" I enquire not lifting my eyes from the keyboard.

"Oh the silly b----h says that it's the fault of the liquor industry that so many more women are drinking and driving. Apparently it's because they have been targeting young women with alcopop thingies. Marketing is to blame. "

"Well you know," I respond,"That these women advocates will never have a bad word said against females. It couldn't possibly be their fault that they are drinking and driving. It's got to be consumerism or capitalism or any damn thing but the individual."

The truth is people drink and drive because of a widespread culture of irresponsibility. Period.

Can you help?

My son is doing a social studies project to gain some NCEA credits. It involves a 6 question survey aimed at people who will be directly affected by the Emmissions Trading Scheme. If you could assist by answering his questionnaire could you e-mail him at

mitchellr@athena-college.co.nz

I know he would be very grateful.

Vision versus reality

Labour's vision for state housing was as per the poster,



The reality was described thus,

Interviewer:Even as late as 1958 when Les Baily was seconded by the Department of Education to begin organising recreational activities for the children of the Hutt Valley, conditions and attitudes had not greatly changed.

Les Bailey:I was looking around that area, I always felt sorry for them in some ways with the predominance of state housing that was put into the district. All you saw was bare lawns, there wasn't a tree growing anywhere, no shrubs, no gardens, no places where kids could play freely, you know? — and there certainly was a lack of playground space. It wasn't a very attractive area at that time.

Sure they had the riverbank, the riverbank in those days wasn't the playing fields that are all there now, there weren't the stop banks in and so on.

Interviewer: This is the Hutt River?

Les Bailey: The Hutt River, yeah, and there was a lot of these pretty scrubby sort of areas down there and I imagine that perhaps that is where some of the Mazengarb report activities — as reported by them — took place.


And today those areas are even worse, particularly the 'shopping centres' (euphemism for takeaway shop, more takeaway shops, second hand shops selling over-priced junk, Credit Union, Housing NZ and Work and Income Offices). And the government is still forking out,

State house tenants say the sooner the Government starts insulating their homes, the better.

This week's Budget will include $53 million to make all state houses warmer and dryer within five years.

Peter Petterson has been in his state house in the Lower Hutt suburb of Taita for 30 years and says the upgrade is much needed.

"They are cold, you've got to use heaters. Some of the older people stick on some more clothes and blankets."

Mr Petterson says it is a shame the upgrade is happening after his children have grown up and moved out, but at least his grandchildren will benefit when they come to stay.


Labour's vision under Mickey Savage was never realised. All that happened was people were made dependent, robbed of their initiative and ambition, made poor, and frequently bitter and resentful. And still the socialists press on.....

What real commitment looks like

At last, a real plan to regain New Zealand's economic standing in the developed world. According to Radio New Zealand,

The ACT Party says slashing the number of MPs and offloading state businesses, would lift economic growth and leave the average New Zealander $500 per week better off.

They're part of 20 pledges that party leader Rodney Hide is promising to carry out, if ACT holds the balance of power after the 2008 general election.

Mr Hide is also committed to flattening tax rates, cutting state spending and remodelling climate change policies.

Mr Hide says the plans would help lift New Zealand from being poorer than the lowest ranked states in Australia and the United States; Tasmania and Mississippi.

He says the proposals would boost annual growth, by 5%.

The 20-point plan is here

Maori Party welfare policy

This is a late comment in response to an interview of Tariana Turia by Gordon Campbell. Never before have I heard Tariana spell it out so clearly. Their 'tough talk' on welfare applies only to Maori men, not Maori women.

Campbell: You’re saying welfare is bad for Maori, so we have to break the cycle by introducing a compulsory element -

Turia : We’re talking Maori unemployed. We’re not talking about Maori women on benefits.

It is shocking attitude. This is why.

The Maori Party condones Maori women raising their families on the DPB. With this action they are destroying the role of Maori men as fathers and providers. What is the imperative for having Maori men in jobs when they have no direct role to play in supporting their families beyond paying child support which, by the way, rises as they work their way up the food chain.

There are five times more Maori on DPB than on the dole. Maori childrens' needs are no different from any other. They need security, structure, predictability, and consistency, from both parents. When these things are missing there will be problems. These are more likely to be missing when they are being raised on welfare than when they are being raised by two parents earning a living from work.

And this differentiation highlights another aspect of the Maori party. Their policies are not only racist but sexist. But then traditionally Maori culture features a good degree of sexism. This policy does not bode well for the prospects of their tamariki.

As an afterthought Willie Jackson recently made this observation. That many of today's Maori leaders had strong fathers.

Assuming Kiwis will accept lower wages

That's what the Wall St Journal is saying our government's plan to implement an emissions trading scheme is predicated on.

The cost, for farmers and industry alike, is likely to be prohibitive. The New Zealand Institute of Economic Research, an independent consulting firm, recently estimated that the government's plan would result in 22,000 job losses by 2012, or 1% of today's employment. That translates into NZ$4.6 billion ($3.6 billion) annually in lost GDP, or a NZ$3,000 cut in each household's annual spending.

This analysis assumes that as greenhouse gas fees make Kiwi industry less competitive globally, businesses and jobs will move overseas. The government disputes this conclusion, mainly because its own analyses assume New Zealanders will be willing to take lower wages. That's debateable, to say the least.

That aside, give the Kiwis credit for honesty. Having signed up for Kyoto, they're actually talking about shouldering the costs of meeting their commitments. Whether or not they end up regretting it, other countries will now have a chance to see what the anticarbon crusade does to an economy.

So how do you feel about being the guinea pig?

Waiting

One of the good aspects of life is anticipation. Optimists like setting themselves goals. Looking forward to something is often as enjoyable as the event. But 'waiting' can be quite a different story.

Having endured a fair bit of pain recently I finally succumbed yesterday and went to the doctor. Beginning the process of eliminating possibilities she referred me to a specialist. Thank goodness for the private system. She could secure me an appointment within 24 hours. When you can't sleep without painkillers you do not want to hang around.

So I read this piece about waiting times in the Canadian public health system with great sympathy for the individuals who cannot afford private care. Of course, the same applies in New Zealand.

Excessive waits for health care services endured by Canadian patients have imposed huge costs on the nation's citizens according to a study from the Centre for Spatial Economics.

Other major findings:

* The study of medical wait times in all 10 of Canada's provinces found excessive delays for four key procedures--total joint replacement surgery, cataract surgery, coronary artery bypass graft surgery, and magnetic resonance imaging (MRI) scans--cost the nation an estimated $14.8 billion in 2007.
* This in turn lowered federal and provincial government revenues by a total of $4.4 billion, the report noted.

However, it is individuals who bear these costs. When the government controls all of health care, it looks for ways to save money, and the easiest way to save is to deny care or ration care through long waits, says Charles M. Arlinghaus, president of the Josiah Bartlett Center for Public Policy.

Rationing care by using waiting lists puts a heavy strain on an economy by incurring high costs through reduced worker productivity, says Devon Herrick, a senior fellow at the National Center for Policy Analysis. Canadian Medicare uses rationing by waiting because the cost of lost productivity is borne by the individual and employer, whereas the cost of actually providing needed care falls on the public system.

For example:

* Excessive waiting for total joint replacement surgery was the most expensive byproduct of Canada's health care rationing, at nearly $26,400 per patient.
* That was followed closely by MRIs ($20,000), coronary artery bypass graft surgery ($19,400), and cataract surgery ($2,900).

Herrick disagrees with the study's policy prescription, saying private care options would be more effective than increased government investment in the system.

"Canadians should be allowed to pay for care privately if they so choose. It is unconscionable to forbid patients from paying for care the public system cannot provide them in a timely manner," he says.



Absolutely unconscionable.

Just another Royal Commission

The Kiwi Party want another Royal Commission on Social Policy.

We have had two Royal Commissions on Social Policy in recent times. One in the 70s and one in the 80s.

The first stressed the principles of allowing beneficiaries to participate and belong (and gave us the DPB) and the second confirmed those principles.

A third commission would see a much stronger lobby for re-stating these principles (which rest on wealth redistribution and ignore the destructive incentives inherent in the process) than any opposing voices. The Kiwi Party must already know the same forces that lined up behind the anti-smacking legislation would line up at a Royal Commission arguing for 'inclusion' 'social justice' and other social democrat warm fuzzy concepts.

I can understand their political motivation for calling for another commission but am very sceptical that it will achieve anything beyond giving another platform to the poverty industry protagonists and keeping printers in work as they churn out volumes of reports.

ACT Tax Policy

Larry Williams interviews Rodney Hide about ACT's new tax policy. (Interview begins at 38.20)

The policy includes removing the 39c rate and making the first $10,000 of income tax free thus giving every earner on the average wage a $50 cut.

This is a good start because it is simple and it is heading in the right direction. It will also widen the gap between benefits and low wage work and stop this silly business of taxing kids with paper rounds or part-time McDonald's jobs.

Green concoctions over Comalco

What utter hypocrites the Greens are. Jeanette Fitzsimons;

Ms Fitzsimons says Rio Tinto should have no special allowances under the emissions trading scheme. She says although the operation is an important part of the economy, it is not so important that it should get special privileges ahead of ordinary New Zealanders.

This is the party that argues for tariffs - special privileges - to protect manufacturers.

Their entire social policy relies on greater redistribution of wealth - special privilege for some and penalties for others.

They urge government sponsored special treatment for NZ made products.

They support 'fair trade' which picks winners at the cost of other producers.

The Greens love privilege versus penalty. That is what gives them their power to plan and control human beings. Now they pretend to 'fairplay' by invoking their concern for the ordinary taxpayer. That'll be the ordinary taxpayer they want to pay for their grand desire to lead the world in the fight against climate change.

Talk about wolves in sheep's clothing.

Why we need more ACT MPs

"With government controlling more and more of our economy, the fact that crooks have to go where the money is causes more and more of them to turn to government employment. However, there is probably an even stronger reason for individuals to become politicians. That is the power which accompanies political office. Many idealists think they know better than the ordinary person what is good for that person. They consider themselves a cut above the ordinary individual who just isn’t smart enough to know what he or she should do. Idealists seek government power to impose their ideas upon the rest of us. They may be personally honest insofar as not thinking of lining their own pockets with money but have little compunction about bolstering their egos with government power. This attitude explains the environmentalists, the do-gooders, and others whose ego causes them to seek government power to impose their ideas upon those of us who just want to make our way in a free market in open competition with everyone else."

— Harry Hoiles, editorial from The Register [June 2, 1979]

This is why we need more MPs who will defend the free market and neutralise the above individuals.

ACT and the anti-smacking legislation

This is for the benefit of the Libertarianz Party who had their conference at the weekend and implied ACT had no position on the anti-smacking legislation. The above (which says Let Parents Choose and featured photos of Rodney and Heather)is part of an ad campaign run in the Sunday newspapers a few weeks back. Rodney and Heather also joined the anti-smacking march from Civic Square to Parliament in late March and voted against the legislation. Libz would do better to get on with their own promotion instead of running down the party which is closest to their ideals.

WFF - get rid of it

Naturally it has now dawned that Working For Families will discourage partnered women from the workforce. There is no consensus over whether that is a good or bad thing. Conservatives tend to like women to be in the home raising their children and leaving more employment opportunities open for men. The social democrats still believe strongly in equality and choice for women. The second part of the social democrat goal is about where I sit EXCEPT it must not be achieved through redistribution. Simply, if women want choice - home or work - they can pay for it.

Anyway, today's NZ Herald editorial has this to say;

The drop in employment can be greater than the rise in unemployment because the latter excludes people who are not actively looking for another job.

So long as those people are not urgently in need of a paying job - the greater number of them are women and the decline follows a rise in the "working for families" benefit - the figures are less of an economic concern and may even be a plus for the economy in present circumstances.

The trouble is, with WFF, all we are doing is dividing up the pie instead of growing it. There is at least a consensus (barring the Greens) that we do need economic growth. So I do not accept that the figures constitute "less of an economic concern". And neither would it seem do the new Australian government which is promising "a giant review of tax and welfare."

Effective marginal tax rates are a particular problem for partnered women with children, who see little value in working when their family benefits are withdrawn. The Government aims to get more of these women into the workforce.

I remain convinced - though the chances of ever proving my instincts are right are remote - that governments should just butt out of social arrangements. The more they try to centrally plan societies the more they stuff them up. They get caught on a never-ending see-saw of readjustment, wasting enormous resource and energy in the process. A low flat tax and the minimum of social assistance would see people organise themselves into situations that are beneficial both economically and socially.

Bits and pieces

This will be interesting as it unfolds. A pharmacist on charges of supplying pseudoephedrine. Pharmacists supply pseudoephedrine every day all over New Zealand. In this case the charge accompanies those of possession of pseudoephedrine and possession of the equipment to make 'P'. Perhaps the first charge should actually be (or correctedly reported as) knowingly supplying pseudoephedrine for the manufacture of methamphetamine.


Bloggers make news again. From a piece about Judith Tizard in the Herald on Sunday;

"I understand Tizard is kept quite busy by being Helen's Mini-Me at all those Auckland cocktail parties..." wrote one emailer to the kiwiblog forum. "She's not stupid, just moody and, well, not the hardest working Labour MP by a long shot," wrote blogger Liberty Scott. "One thing is for sure, Judith won't be remembered as a mover and shaker, but as one of those odd MPs who is really there because of family heritage."

Love the comment at the end of the piece. Tizard says she doesn't want to be in cabinet because, "It's an awful waste of a Monday."


And the Sunday Star Times reports beneficiaries are worse off now than after the benefit cuts of 1991, 'worse off under Labour'. Will Labour peg core benefit rates to average wages? I think they just might promise to with the spin being 'as we have reduced benefit numbers by so many we can now afford to "invest" more, particularly in those families with children.' The Maori Party and Greens will agree. That'll secure the quarter-million-strong beneficiary vote for a left government.