Street preventing choice and efficiency

The view of the author is that the privatisation process delivered benefits to:

• ACC by creating a more efficient and focused organisation,
• the overall scheme by properly defining the entitlements,
• insurers who made profits from the experience,
• employers by reducing premium rates,
• employees overall through improved rehabilitation and reduction in injury rates.

That is an excerpt from a review of the Privatisation of New Zealand
Accident Insurance Workplace Cover 1999/2000.

ACC Minister Maryan Street, who loathes the idea of competition and profit, is harassing National over any policy to re-privatise employers accounts. What caught my eye was her snide and petulant claim that National was simply "lining the pockets of their insurance company mates.”

Now that really is a fine example of the 'politics of envy' and what turns thinking people off Labour.

National's nineties record on welfare

A commenter from yesterday disagreed with my statement that National's recent record of getting people into the workforce is worse than Labour's.

The anonymous commenter says;

Again wrong. The single best effort here is Ruth Richardson in 1990 - all else pales beside this.

There seems to be a misapprehension about what National achieved during the nineties in respect of dealing to unemployment and general welfare dependence.

For the period 1990 to 1999 (October) the unemployment benefit numbers went from 139,625 to 143,707 peaking in 1992/93 at around 170,000.

Numbers on all other benefits continued to rise through the same period.

DPB 94,823 to 110,315
Sickness 19,511 to 33,043
Invalid 27,824 to 57,127

We all know that numbers on the unemployment benefit have plunged under Labour. Yes, they have enjoyed strong economic conditions in spite of their increasing regulation and interference. Yes, their achievements in respect of the DPB have been rather pathetic. Yes, there is a very real problem with the growth in the invalid's and sickness benefit, some of which represents what the OECD calls the "medicalisation of labour market problems."

But don't try and tell me National was a world beater at reducing benefit dependence because it simply isn't true.

The "major difference between Labour and National"

John Key was in Taranaki last night talking to supporters;

''I personally believe we're going to win the next election,'' he told the packed conference room.

New Zealanders could see the one major difference between the Labour and National, he told them.

While National's were the politics of aspiration, Labour believed in the politics of envy and it was not taking them anywhere, he said to hearty clapping.

This is the Nats election catch cry. I first heard it from Mark Blumsky sitting on the Face Off panel on NewstalkZB. (Slightly ironic it should come from a disillusioned one-term MP)

I can't disagree that Labour is besmirched with envy politics. A disdain for "rich pricks" and discomfit with private success seems to have gathered momentum this year.

But is National really "aspirational"? It's one thing to lay claim to a moniker but breathing substance into it is another.

There is a world of difference between the two types of worldviews but there is not a world of difference between what happens in New Zealand when either a Labour or National government reigns. I know National-supporting bloggers have listed differences but I can never remember what they are. Not a good sign.

What should a government be aspiring to? Surely to lift New Zealand's comparative economic standing in the world would rank right up there. But we haven't seen the Nats commit themselves to achieving the rate of economic growth it would take.

It is broadly accepted that education is the key to prosperity and independence but National are happy to largely preserve the status quo with the abandonment of their earlier bulk-funding policy and retention of elitist zoning. Meanwhile literacy declines.

It is best practice to let the private sector run services yet the Nats have run a mile from privatisation.

And Working For Families might help people in the short term but it traps them in the long. It is the very antithesis of aspiration. Yet the Nats will keep it.

So what am I left to think? That the so-called "major difference between National and Labour" - the politics of aspiration over the politics of envy - is nothing more than a seductive slogan.

Begging for regulation

Outrageous.

How should unhealthy food be regulated?

Ban advertising during children's TV (1658 votes, 23.4%)

Ban sports sponsorships (166 votes, 2.3%)

Label junk food (624 votes, 8.8%)

Tax junk food (898 votes, 12.7%)

Nothing - what we eat is a personal choice (3745 votes, 52.8%)

Now I ask you. How can what we eat be a personal choice?? It is the responsibility of the state to direct our diets. Everybody knows people are too stupid to look in the mirror and make any connection between too much KFC and being blobby. Last time I had a piece of KFC the fat it was cooked in dripped down my chin. DRIPPED DOWN MY CHIN. What we need is a Ministry of Mustn't Eat. It should be tasked with educating people that just like school choice and health choice, food choice is too much of a responsibility to be shouldered by the individual. It makes no sense for the state to own your life and your money and not your body too. We should all be grateful that those with better instincts than ours are preparing to step in and relieve us of our last vestiges of autonomy.

Bugger the majority.

Yes or no?

My mother was a teacher. She had a habit (and still does) of pulling me up on grammatical errors. A favourite was my misuse of the word 'borrow' when I meant 'lend'.

But one I always got her on is using a double negative. And it's very common. People will often fall into the trap by making a negative statement and then tacking "I don't think" on the end. So what is all this nit-picking about?

A report about Rodney Hide's Regulatory Responsibility left me struggling to draw a conclusion with this statement;

However the commerce select committee said it did not think the bill would not work as it would create legal headaches.

Perhaps we can find out exactly what is happening to this bill today when Rodney takes Leighton Smith's place for the morning as talkback host on NewstalkZB.

For Wellington and Christchurch listeners live-streaming is available here. Select Auckland.

Effects of raising benefits

This is a summary of some of the research into the effects of increasing benefit payment rates. It is from the Colorado Independence Institute during the early 90s. AFDC was the US equivalent of the DPB.

Though the issue is contested, many researchers believe there is a direct link between welfare and illegitimacy, and therefore a long-run link between welfare and crime. For example, a study by M. Anne Hill and June O'Neill (currently director of the Congressional Budget Office) found that a 50 percent increase in afdc and food stamp benefits led to a 75 percent increase in the number of women enrolling in these programs, a sharp rise in the number of years spent on afdc, a 43 percent increase in the number of out-of-wedlock births, and a 117 percent increase in crimes perpetrated by young black males. Researchers from the University of Washington found that a difference of $228 in monthly welfare benefits more than doubled a white teenager's probability of bearing an illegitimate child. Other U.S. and Canadian investigations show that even small increases in welfare benefits raise the odds of women going on welfare and becoming single parents. Roughly half the increase in black illegitimacy since the mid-1960s can be attributed to increased welfare benefits and easier eligibility standards, according to Hill and O'Neill.

Removing any incentive to work

According to the Dominion Post today a solo mother with two children on the domestic purposes benefit received $23,000 net a year - less than 55 per cent of the average income...

Currently working a 40 hour week on the minimum wage nets $24,960; a 30 hour week $18,720. The effective rate of taxation on earned income is slightly higher than on the benefit sum.

So it is easy to see why moving from a benefit to a low wage job is not "worth it".

Now if the In Work payment was added the net benefit income would rise to $25-26,000 - more than working a 40 hour week on the minimum wage.

People used to work because they had a work ethic. They wanted to pull their weight and be seen to be independent. Poor but proud. Today many will only work if it is financially advantageous. The government has to work with that reality. The CPAG wants to ignore it.

Discrimination?

The Child Poverty Action Group begins its case against the government tomorrow. They want the In Work payment (now In Work Tax Credit) paid to beneficiary families as well. They claim the exclusion of beneficiary families is discriminatory.

This is my argument against the CPAG (repeated);

If the CPAG win, essentially we will see an increase in benefit levels. An increase in benefit levels leads to an increase in the number of people going on or staying on benefits. CPAG want a short term gain and refuse to see the long term cost which cannot be in the best interests of children.

There is no guarantee the money reaches the children anyway.

And, most obviously, the incentive effect of the In-Work payment will be nullified if it is extended to non-working families.

The Greens and the Maori Party are supporting the CPAG.

Who is going to win? We have seen the Ministry of Social Development forced to settle out of court previously for discriminating against a single male parent who had full custody of a child (the mother had full custody of the other child/ren) by not allowing him to be on the DPB. But in this case, should the government lose, there would be a significant financial impact. Around $3-400 million more would be paid to parents on benefits. (From the beneficiaries point of view that's about a 14 percent pay rise.)

Beneficiaries already receive family support for each child. It varies according to age and ranges from $57 to $95 per week. Payments increased in April 2005 and April 2007. I wonder if I could take a case to the Human Rights Tribunal claiming discrimination because I do not receive these payments?

Or, more to the point, perhaps I should try discrimination on the grounds that I do not receive the In Work tax credit. The government has set arbitrary conditions on who receives them. The one that excludes me is an income test. The one that excludes beneficiaries is a work test. If the CPAG can get the work test removed perhaps I can get the income test removed.

UPDATE: A couple of months back I put out a media release about the CPAG being "at loggerheads with the OECD" on the matter of what strategy is most effective in reducing child poverty. I was pleased to read in the Dominion Post this morning that the government will be calling two representatives from the OECD as witnesses in its defence against the CPAG.

Mad Matt

What a load of codswallop from Matt McCarten today. If he was right about ACT than I would be an utter misfit. I would never have been placed on last election's list, let alone within cooey of becoming an MP. First he launches into the Business Roundtable;

Its ideology is quite simple: we're all essentially greedy and we should be free to make as much money as we can. If we exploit others in the process - well, that's just the free market at work. Now it seems Labour may be defeated this year, it appears to be getting ready to get back into the driving seat. No doubt it would have been behind the recent manoeuvre to bring Douglas back into Act.

We are all essentially self-interested. Greed and self-interest are completely different things. They produce different outcomes. The NZBR would concur with Adam Smith's defence of self-interest. In a personal sense I am self-interested. Those things that matter most to me are to be protected and cared for or I will become unhappy. I am protecting my own interests when I protect those of my children, family and friends. Business is the same. Self interest in one's own business success requires creating an environment where everyone employed or traded with is gaining something. When exploitation occurs - personally or professioally - unhappiness and failure result.

The NZBR is behind Roger Douglas's re-emergence? The person behind Roger's re-emergence is Roger. I am sure some people have been persuaded to stand for ACT indirectly via the NZBR simply because they promote (very well) sound ideas similar to those ACT promotes. We share the philosophy of individualism. This grand plan conspiratorial stuff is just self-gratification of the loopy left temperament.

It would have been devastated when John Key, a moderate, took out Don Brash as leader. Therefore it had to resort to a Plan B and coax decrepit Douglas out of retirement. With the support of his Roundtable cronies, Douglas is now effectively co-leader of the Act Party. I'm wary of political ideologues who claim our economic and social ills can only be cured if we adopt their plan. Apparently, Douglas and Act have a new 20-point plan. Most of us are probably tempted to roll our eyes about this nuttiness. But don't think they are harmless fruitcakes.

So what's your plan Matt? Drive New Zealand right off the bottom rung of the OECD ladder? All pre-election policy is a plan. Could we have some credit for being transparent about ours? No. I didn't think so. Because that blows another right-wing conspiratorial theory - the cloak and dagger hidden-agenda one. That's the one you now save for John Key.

Unfortunately for the far right, there is a major block to their success - the Maori Party......Therefore it should be no surprise the Business Roundtable released research it has sponsored which runs along the supposedly reasonable line that as we now have MMP, the Maori seats are unnecessary and allow a disproportionate number of Maori in parliament. Funny how the Roundtable didn't produce a report about the over-representation of white males in parliament.

.....The Business Roundtable doesn't give a fig about the role of Maori - good or bad. The report is merely propaganda to influence the public so National sticks with its promise to hold a referendum on Maori seats. Ask our country's 86 per cent non-Maori population if these seats should remain and the answer is a foregone conclusion. They will go, as the Roundtable intends.

This has nothing to do with Maori. It's the far right removing obstacles so it can get in a government it can influence to finish off the neo-conservative agenda begun in 1984.

That the NZBR (and by implication ACT) "doesn't give a fig about the role of Maori" is a ugly misinterpretation. One can care about people as individuals without agreeing to tribalist, collectivist notions and practices. That is the most important concept and maybe Matt McCarten just can't comprehend it. If New Zealand prospers (and prosperity is undeniably linked to freedom, not government) the people who will experience the greatest improvement in the quality of life are those who currently have the least.

Matt, if you are right, and the Business Roundtable and ACT are run by 'greedy, white, rich men' wouldn't they also be of the selfish 'I'm- alright- Jack ilk?' Why would they be spending their time and energy and MONEY bothering with ideas, philosophy and politics? Especially in their 60s and 70s. It doesn't stack up Matt.

I wish

From an interview with the Sunday Star Times,

Brash says while he was largely happy with National's policy platform in 2005, seeing it as a necessary compromise, he wonders whether he might have gained more votes campaigning as a conviction politician.

We will never know. But it's not too late to have another go Don. All you need is people around you who share the convictions you hold about what is needed to turn this country around.

Green/Maori Accord

Back in February I blogged the reasons why a Maori/Green Accord is a distinct possibility.

Today's Green conference has brought more talk about such a possibility.

The Greens and the Maori Party holding the balance of power after the next election would be a very dangerous situation for New Zealand to find itself in.

Political cross-dresser

How quickly a leopard can change its spots. Reason describes the new Mayor of London's transformation from libertarian to authoritarian. Fascinating piece. Populism is so seductive.

Art and schools

To give you an idea of how schools utilise technology while still learning hands on creative skills have a look at this. I am amazed at the variety of drawings that came out of the 20-odd children I worked with yesterday. They each had a copy of a photo of an afghani child (I had already drawn in pastel so was familiar with the subject). I demonstrated how I would tackle the subject using oil pastels and they followed. It was a real pleasure. The children are aged 9-10.

Who is he kidding?

Some lawyers really do lay it on thick. A brutish, callous 19 year-old was yesterday jailed for two years after his vicious attack, caught on camera, on a 17 year-old. The defence counsel says, as the offender heads off to prison, the turning point in his client's life would be when he got out of prison and had to take responsibility for his young partner and their expected child.

What??? He should be nowhere near a child. Hopefully his 'partner' will run a mile. But I've known silly girls who romanticise and mope after their incarcerated love objects. Parting is such sweet sorrow....

Give me a break. Likely the judge had similar thoughts running through his head. His parting comment to this individual was, "For what it's worth, I do not think you could care for a guinea pig."

Let's hope someone from care and protection services was paying attention.

Front page but it's not news

The following appears on the front page of the Dominion Post. It's not news - not in sense that news implies something 'new'.

Dr Van Herck, who is originally from Belgium and has been working in New Zealand for 2½ years, said many able-bodied sickness beneficiaries should be on the unemployment benefit instead.

"A lot of people on sickness benefits say Work and Income staff have sent them and just expect you to sign the form."

He had seen one woman who had been on a sickness benefit for 19 years because of asthma but smoked a packet of cigarettes a day. Work and Income had offered her several quit programmes. "She admitted she was too lazy to go."

Another sickness beneficiary's documented reason for not working was they "could not be bothered".

He signed off both beneficiaries but wrote on their forms that they needed follow-up and reassessment.

On the day he saw the asthma sufferer, he also saw a man whose leg had been amputated above the knee and who worked full-time, despite pain. Another woman continued to work after a stroke.

"They are paying taxes to sustain somebody with asthma smoking a packet of cigarettes a day. Many GPs have complained; it becomes a culture of handouts."

What it is going to take to break this culture? First there has to be a consensus that 'bludging' just isn't acceptable. Until that happens isolated individuals will struggle to stand up to the intimidation or sheer persistence. Alongside the culture of handouts is the culture of making excuses for people. The opposite doesn't demand that we stomp all over people punitively. What it requires is more people showing, teaching and expecting aspiration and ambition.

Sometimes those people just aren't available in the lives of beneficiaries. But they exist in the community. And I have seen the difference 'mentoring' relationships can make.

Then I have also seen the resistance of people to any effort to help and encourage them. In which case we need to relearn a culture of just saying 'NO'.

Questions

National's Simon Power is playing to the law and order buffs. I should know, being one. Here he highlights how many people on home detention are absconding.

Mr Power said the Government had put its obsession with reducing the number of prison inmates ahead of public safety.

Obsession? If Labour is obsessed the statistics don't reflect it.


The graph above groups the sentenced prisoner population according to current eligibility for discretionary release (either on parole or home detention). Prisoners in the category “no discretion for release” include those whose sentence does not allow early release on parole or home detention, as well as those who are eligible but have yet to pass their parole eligibility date. “Discretionary release eligible” refers to those who have passed their parole eligibility date or home detention eligibility date but have yet to be released or have been granted leave to apply for front end home detention but have yet to be released.

The data reflects the influence of parole laws introduced in 2002, which meant that parole eligibility occurred earlier in the sentences of longer-term prisoners. However, this has not meant that prisoners have been released earlier. Instead, the number of sentenced prisoners currently eligible for release, but who have yet to be granted release by the Parole Board, exceeds the number who are not eligible for release.


As it stands 48 out of 2,500 home detainees absconded. My point is, if National says it can do better, then they are saying they will eliminate all the risk. That would entail keeping all 2,500 home detainees in prison.

So will they be making a commitment to abolishing home detention and building prison capacity? What exactly is it that National are going to do better than Labour?

Maori Party and Poverty Elimination

Has the Maori Party poverty elimination policy been costed???

My goodness. This (I notice it is not co-issued by Tariana Turia AND Pita Sharples which is usually the case) puts the Maori Party to the left of the Greens.

The Maori Party says:

* Provide a universal benefit for parents raising children. If families are already well off, recoup the benefit from tax on higher incomes. (Universal benefits reach the neediest families most effectively.)

* Set a baseline for poverty at 60% of the average wage, and a deadline of 2020 to eliminate child poverty.

* Exempt the first $25,000 of income from tax.

* Raise the minimum wage to $15 per hour.

* Remove GST from food. (The government says this would make the tax system too complex, but that argument hasn't stopped them granting all sorts of exemptions from the Emissions Trading Scheme.)

* Investigate other sources of revenue - capital gains tax, bank transaction tax.

I will attempt some VERY crude costings and please feel free to put me right if I err.

1/ A universal benefit for parents. Which parent? How much? In 2006 there were 515,000 families with dependent children. A modest universal benefit of $20 per week would cost $536 million. But why should a parent with one child receive the same as a parent with 5? The old family benefit (scrapped in the early 90s) used to be paid per child. In which case it would cost over $1 billion.

2/ Set a baseline for poverty at 60 percent of the average wage. The average income from wages or salary was $893 a week in June 2007. So at 60 percent every family head (employed or otherwise) would receive $536 a week. That's around double the current benefit rate. With roughly 114,000 parents on a benefit, instead of $1.5 billion the welfare bill would be $3 billion (and that doesn't include family support and accommodation supplement.)

3/ Exempt the first $25,000 from income tax. That would cost (very roughly) about $11 billion.

4/ Raise the minimum wage to $15. (Cost to business about $1.2 billion)

5/ Remove gst from food. $2.4 billion (DPF figures)

That's $15.9 billion. To be raised from incomes and income over $25,000. That's about 1 million workers paying an extra $15,900 a head in tax.....

...or whatever effort and wealth-creation tax the Maori Party prefers.

When they have driven all the workers away they won't have to worry about divvying up the pie any more. There won't be one.

Having talked this through with my own 'economic adviser' he wonders whether this isn't a cultural policy designed to return NZ to the economic approach that prevailed before colonisation.

Still missing the point

Today's Dominion Post editorial is about the Kahui twins and the Kahui family. It runs through the all too familiar list of high-profile child murders and concludes;

Many of their cases have common features: alcohol and drug abuse, lifestyles fuelled by crime and benefits, mothers with children to different fathers, delays in seeking medical help and a refusal to cooperate with police once a crime has been discovered. Many, too, occurred within Maori families.

Maori are not alone in abusing their children. Every culture has its dirty secrets, but there is no escaping the fact that Maori children are disproportionately represented among the victims.

Maori Party co-leader Pita Sharples says this is because Maori are over-represented in poverty-stricken and under-achieving communities.

He may be right, but that is an explanation, not a solution. The killing will not stop till relatives and neighbours of mistreated children recognise that they owe their loyalty to society's most vulnerable members, not to those who abuse them.

Again this misses the hub of the matter. Again we are seeing the responsibility shifted to people other than the mother and father. The killing will not stop until those individuals bringing babies into the world make a commitment to them. But too often they are too young themselves; too consumed with having a good time whether that's getting on the piss, partying, taking off to play the pokies, smoking P. It's all about escaping life and responsibility. What is the reward for behaving any differently? Loneliness (a baby isn't much company), ostracism (you can't hold your piss) hostility (you're a nark).

It is no good appealing to the cuzzies when it is quite likely they are the source of malevolent 'peer pressure'. Where the whanau is any good the babies have long gone usually to grandma.

It takes an incredibly strong individual to raise a child well in this sort of environment and the fact is there just aren't that many to be found. Lifestyle welfare has created a feckless and inhospitable setting for children. Caring 'relatives and neighbours' can't compete with it.

What would they fight about?

This is a quote from Judy Kirk addressing the National Party northern regional conference on the matter of the EFA,

I don't think it's a damned good idea, Mike Williams; I think it stinks and I think you and your party should be ashamed of yourselves and what you have done to this democracy. You're not prepared to fight with us on ideas. You'd rather break all conventions and ram through anti-democratic legislation. Well you will fail.

Can you guess which part of the quote had me choking?

You're not prepared to fight with us on ideas.

Just which ideas would they find to fight over?

- That the purpose of government is to equalise people's incomes and outcomes?

- That the purpose of government is to use taxpayer's money to do what the private sector can and should do?

- That the purpose of government is to usurp private property rights when it suits?

- That the purpose of government is to intervene in the social and moral spheres of New Zealander's lives when it sees fit?

Now those debates would be worth hearing. But they could never occur between National and Labour whose prescription for government is the same.

What Cindy Kiro really thinks

The New Zealand Herald reports on a survey commissioned by Family First about behaviour and attitudes to smacking since the passage of the anti-smacking legislation;

Children's Commissioner Cindy Kiro said yesterday that she had not seen the survey.

But she urged people to move on and learn better parenting skills.

"The key message is, 'For goodness sake, can't we move on?' So much energy has been wasted debating this."

That's an interesting attitude in itself. Very. It reveals that the Children's Commissioner does not care for discussion or debate when it comes to what she wants to do. To those of us who would put up objections, the key message is actually, "you are wasting your energy". Presumably we will be wasting our energy opposing any other of her initiatives like mandatory screening of every baby's home life.

The Office for the Children's Commissioner should be disbanded. It is partisan, it is authoritarian. And worse still, of the matters that it seeks to control, which has improved since its inception? The number of established child abuse cases? Bullying in schools? Youth violence? Adolescent pregnancy?

The only real success the office has achieved is in rubbing good parents up the wrong way while spending their money touring the world promoting New Zealand as some sort of world beater. How ironic.

As the Commissioner is so very fond of 'sending messages' here is mine; I will decide what is and isn't a waste of my energy. I am not here to roll over at your behest.