Mr Tactless

Not quite Hone Harawira but....

Am I being pc because this guy makes me wince?

"What's so tragic about a 6.6 per cent jobless rate anyway?" asked Bank of New Zealand economist Craig Ebert.

Ex Treasury. Bloodless. Yeah, yeah and I'm a bleeding heart.

Mr Ebert obviously doesn't have friends or relatives who have lost jobs or businesses.

"A lot of countries would give their eye teeth for that sort of level, albeit we should hope for something a bit lower in due course. For a truly stuffed labour market, and economy, go back to the early 1990s, with 11.2 per cent [unemployment]."

Mr Ebert doesn't look old enough to have actually experienced the early 1990s. For the first time in my life I couldn't get a job and it is a most depressing, but empathy-building experience.

What really pisses me off is this supercilious attitude is what gives capitalism a bad name. Thoughtless prick.

Auckland tornado a socialist 'cause celebre'

It never ceases to surprise the lengths socialists will go to to exploit events. Even natural disasters.

Worker killed in New Zealand tornado

Subsidising youth into work looks good on paper but....

A fanfare was made yesterday about a further $55 million available to subsidise young people into jobs or training.

It is unpopular to argue against this initiative but I will.

1/ Primarily any subsidy distorts the labour market. As do legislated minimum wages. The first assists the employer and the second penalises. I am surprised the anti-capitalist Greens aren't arguing against the (0n-going) subsidy. Sue Bradford used to rightly argue against WFF on the basis that it subsidises employers.

2/ Subsidies favour one and punish another. The potential worker who attracts the subsidy takes opportunity away from the potential worker who doesn't. Probably an older Maori or Pacific worker with greater financial committments than the young person.

3/ There are around 64,000 (15-24) young people officially unemployed. 1,000 subsidised positions tackles only a small percentage. It is an inefficient use of taxpayer's money to solve the problem of youth unemployment.

4/ What 'can't be seen' is as usual ignored. That $55 million is taken from taxpayers who might have used it to invest in their own economically constructive ways.

5/ Yes. If youth are going to be paid the dole it is better to get something for the money. Which simply avoids debating whether or not youth should even be paid the dole having contributed nothing to the economy thus far. Why shouldn't they remain the responsibility of their parents? Afterall, their parental income is relative when it comes to qualifying for a student allowance. Why isn't the same criteria applied to the unemployment benefit?

6/ Some employers will abuse the subsidy, especially when the government demands they pay inexperienced workers a minimum rate. The criteria that jobs must be "opportunities that wouldn't exist if the Job Ops subsidy wasn't available" is a test easily met.

7/ Industries that can only employ skilled workers are disadvantaged.

8/ There is inherent unfairness in expecting one young person to pay for their own skills acquisition and subsidising the next.

9/ Subsidies should be no part of a policy programme run by a free enterprise party.If they are wrong in principle then ...they are wrong. Sneaking them in here and there to look like they are 'doing something' is an abrogation of their responsibility to introduce better policy. Like low flat tax and labour market regulation reduction. Typically National.

Income from govt - US vs NZ

Americans depended more on government assistance in 2010 than at any other time in the nation's history, a USA Today analysis of federal data finds. The trend shows few signs of easing, even though the economic recovery is nearly two years old.

* A record 18.3 percent of the nation's total personal income was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs in 2010.
* Wages accounted for the lowest share of income -- 51.0 percent -- since the government began keeping track in 1929.

In NZ 12.6 percent of personal income comes from government transfers. I can't factor in Medicare equivalent which would push up the NZ percentage but it is interesting that....

From 1980 to 2000, government aid was roughly constant at 12.5 percent.

(Hat tip Welfare State We're In, who points out that many people incorrectly believe there is no welfare state in the US.James Bartholemew has, by the way, been conracted to write a new book comparing welfare states around the world. I look forward to that. Big job.)

National bolsters war on drugs

Nothing much captures my imagination today. Perhaps worth a mention is National's replacement for John Carter's safe seat. Mike Sabin, the ex-policeman who wages war against P. His anti-drug advocacy doesn't stop at P.

"New Zealand ranking second only to the United States for cannabis use provides further evidence that our country is descending into the world's gutters," Mr Sabin said.

I wonder if National has a seat they can offer to Doug Sellman?

Teen mothers adding children to a benefit

Liberty asked yesterday;

What percentage of teen mothers go on to have 2 or 3 children while staying on the DPB?



It is impossible to answer the question based on the information MSD can provide due to a lack of historical data.

The above tables would indicate that 35,485 mothers (or female caregivers) aged 32 or less who started on welfare as a teenager had 58,004 children.

Some may have added 1; others more, so it is impossible to tell from the above data a specific percentage. But it is clear that Maori and Pacific mothers are considerably more likely to have additional children on a benefit.

There are also a number of other unknowns about the data for instance the dependence on a benefit may not have been continuous. And a very small number might be dependent on a benefit other than the DPB.

Birthright get it wrong

Stuff has picked up on a report released by the OECD mid-week. I subscribe to OECD social statistics releases and scrolled through the report it but it is typically full of out-of-date information.

The writer of the piece fails to say her headline statistic is from 2007. But strangely does date recent information. But here's what gets me frustrated;

Birthright national manager John Donaghy said there were about 219,000 single-parent families in New Zealand, most of whom were middle-aged.

"Unfortunately there are many people who basically poke at the 18-year-old person on the DPB who is seen as a weight on the rest of society, but actually they're a minority."

In March, 46 per cent of single parents were aged 25 to 39, and 20 per cent were aged 18 to 24.

How many times do I have to point out that teenage parents age. They stay dependent and they stay single. Hence we find that there is a spread of single parents across all agebands. The fact remains that up to a half began life as a single parent, usually on the DPB, as a teenager. That is why I bang on, or "poke at" that particular group.

Birthright are apologists for a serious problem that won't be resolved as long as they fail to understand it. As a volunteer I once attended a meeting between a seriously inadequate teenage mother and one of their social workers. The social worker, a pleasant enough young woman, was going through the motions - counsel, make a next-visit appointment and bugger off - whereas I was getting stuck into the filthy surroundings, showing the mother how to look after herself and her once-was-perfectly-nice home. (Another battle I eventually lost even though I won the girls trust. The usual happened. Rent arrears piled up and she disappeared.)

I am sure Birthright serves some purpose but politically they are aggravating the problem they were born out of.

Consensus on Brash

Isn't it indicative that Labour's cheerleader, The Standard and National's cheerleader, Home Paddock are essentially saying the same thing this morning.

Home Paddock blogs, Most votes are in the middle

The Standard blogs, ....what he’s [Brash] thinking is batshit crazy stuff that most New Zealanders want nothing to do with.

Doesn't that tell you how centrist and similar the two big parties are, no matter how much National protests.

Anyway, no matter. We are about to find out how big "most" is. Helen Clark used to say something at this juncture. But I will refrain.

Another dead baby

I feel bad because I look at the photo of this baby, this time, and I don't feel as much as I used to. Am I losing my humanity? I've cried in the past. Why? For the pain they may have endured? The waste? The thought of a limp, lifeless corpse that should be a warm, snuggly, chubby, wriggly, smelling- of- baby being?

Perhaps the edge is taken off what should be deep sadness, by anger. Perhaps mothers with older children are less emotional than mothers of very young and I am now in the former camp. I don't know.

But we should all resign ourselves to more of the same as the causes of child abuse and neglect, sometimes ending in death, continue to be enabled with state money and state systems. Perhaps not feeling deeper sadness is a protective mechanism. More probably it is just mental fatigue. Human beings are made to be resilient, to adjust, to get used to. That is what we do well.

I am sorry you were failed little thing.

Benefit numbers rise over the year

The March quarter benefit statistics just came out.

The numbers on the unemployment and invalid's benefit have been flat over the year.

BUT the numbers on the sickness benefit have risen by 7 percent. Thirty percent of the rise occurred in Canterbury. As the invalid's benefit is flat (0.02% rise) it may be that beneficiaries are being moved from that benefit to the sickness. Only an OIA question would answer that.

And the DPB numbers have risen by 3 percent. So, six months of work-testing the DPB has made no impression so far.

Numbers at March 31, 2011

DPB 113,077
IB 85,055
UB 59,940
SB 59,582

Brash "very old"?

Seventy is not "very old". In fact, believing that says more about the outlook of the person who said it than the subject of the claim. The statement tends to fall into that collectivist-thinking basket of ideas I hate so much. It's ageist. Some people in their seventies may be very old - near death's door because of physical and mental ailments and deteriorating health. Others have good health, sound minds and decades of life experience under their belts. Above all they have a living memory of a New Zealand when values were different. Some better, some worse. But some worth reviving as universal. Like possesion of a work ethic.

And here's another thing. The population is ageing. For those who don't properly comprehend that term - possibly the owner of the ageist attitude - the proportion of people over 65 is growing in relation to those under. And they all have a vote. And life expectancy is growing. So a growing percentage of voters are less likely to judge a politician on their age - at least, having too much of it.

Brash has been upfront about what he wants. There is only room for one party that wants less government involvement in the economy so he has to try and use the ACT vehicle first. Anyone that has been around ACT for any length of time knows the high regard supporters hold him in. So if he just went ahead and formed his own party he will decimate ACT's vote anyway. In that context his strategy is fair to current ACT players.

National's lines on this are eminently silly, as described by Whaleoil whose political opinion is worth rather more than mine.

If Brash assumes ACT leadership and runs a campaign based on the 2025 Taskforce recommendations I am in the camp that believes he can get up to 10 percent of the vote.

Disclaimer: I am not an ACT member and learnt about the leadership bid through the media.

Aussie ahead again

Listen to any racing industry pundit and they will tell you NZ racing is in a perilous state. With globalisation many trainers have upped sticks and left for Australia or Asia where stakes are higher and training is more viable. Punters can bet with competing bookies internationally with ease and do. From my small knowledge breeding seems to be the only aspect of thoroughbred racing that is sound. And that is because so many good types are exported.

Sorry to drag us back to the seemingly insurmountable problem of catching Australia but here is yet another instance of where they are more open-minded and commercially savvy. They are racing today. Easter Sunday. All over Australia. Thousands of NZ dollars will flow into Aussie coffers while our trainers miss opportunities thanks to archaic law.

Kiwiblog takes a predictable position

Kiwiblog is pouring cold water on 'Don's decision' . Hardly surprising. A Brash-led ACT would drag default votes away from National; people who want far more economic austerity and long-term vision but would have ticked National as better than anything else on offer. For mine I would like to see Rodney stay in ACT but move aside. He is brilliant in many ways but not as a leader. I mean that as no criticism and have said it before. I see it because I would say exactly the same about myself (not the brilliant bit). Simply that there are some personality types that just don't want to manage people. There is no shame in admitting that.

What I am less happy about is Banks climbing on the ACT band wagon. He tried in 2008 and I opposed the idea. No reason to change.

Holiday?

An enforced 'holiday'. I will end up doing housework all day. Because when I am not at my shop working (suddenly the work has come in - hallelujah) I will be forced to confront the other environment. And there is no other escape. No horses to speculate on, no trips to the mall which I loathe but mini-me adores. Thank goodness I remembered to buy a bottle of sav yesterday so at least when I have finished vacuuming, washing floors, windows, laundry, mowing lawns, weeding, cooking a roast (not a leg of break-the-bank lamb :-() sighing over my munted car after someone fell asleep behind the wheel of their van and left me with no choice but to go into the sea or take a hit, cleaning the oven (now I jest), I can reward myself. Best I get on.

The cost of taxation

This is explained well by Laffer and summarised by the NCPA:

* To start with, individuals and businesses must pay the government the $1 in revenue plus the costs of their own time spent filing and complying with the tax code; plus the tax collection costs of the IRS; plus the tax compliance outlays that individuals and businesses pay to help them file their taxes.
* In a new study, Laffer and his colleagues estimate that these costs alone are a staggering $431 billion annually.
* This is a cost markup of 30 cents on every dollar paid in taxes.

If it is 30 percent in the US I can think of no reason why it would be any less here.

He then goes on to show how a simplified flat rate would add to economic growth:

* Consider a family that made $40,000 in the year 2000.
* If their income grew by 3.2 percent per year, the average long-term gross domestic product growth rate, their income by 2010 would be $53,110.
* Now imagine that the growth in the family's income was not 3.2 percent but 3.72 percent (the impact from halving the costs of our current complex tax system).
* Under this higher growth scenario, the family's annual income would have been $55,568 in 2010.
* The slight increase in the economic growth rate raises this family's purchasing power by 4.6 percent.

Do you think that the politicians and activists moaning about the rising costs of living could be interested in this counter-balance? In fact, the CPI would not be rising to the same degree if a flat tax were introduced, so you can add to the increased purchasing power the family would have. And not that I want to hold up government spending, but a lower flatter tax rate could be achieved without reducing revenue.

Just a thought that follows on as I muse about NZ's tax system, Peter Dunne, as Revenue Minister, is a waste of space. But imagine Hide in that role. And then imagine if Honest John actually told us who he wants as Ministers before the election.

Teenagers on a sickness benefit

MacDoctor makes mention of Professor Innes Asher hand-wringing over the rising number (Table SR.1) of teenagers on a sickness or invalid benefit. I pointed out that the majority of grants for an SB during 2007 were for pregnancy. But I suspect that overall the rise is because of the growing diagnosis/ incidence(?) of psychological and psychiatric disorders amongst teenagers. This is the cause for general growth across these benefits.

From my OIA file:



As MacDoctor points out Innes says;

“There was a large increase in the number of young people receiving the sickness and invalid benefit between 2002 and 2007 (the largest increase was in the 18-19 age group). “Why was there such an increase in young people on invalid and sickness benefits? How much is due to mental and physical disease as a result of the increase in child poverty?”

She refers to the increase in child poverty in the 1990s and those children now becoming young adults.

Yet statistics show;

June 1990 9.7 percent of sickness beneficiaries were aged 15-19
June 2009 5.4 percent of sickness beneficiaries were aged 16-19

Children of the 1970s were also victims of growing child poverty?

Incidentally, in 1990 67 percent of sickness beneficiaries aged 15-19 were unmarried women. Hint.

Progressive tax - US versus Sweden

Funny how the word 'progressive' usually has good connotations. Not when it comes to tax (unless you are a socialist). NCPA reports;

U.S. Tax Code Is One of World's Most Progressive

The United States has one of the most progressive tax systems in the world, and has become much more progressive in the past 30 years, says Richard Rahn, a senior fellow with the Cato Institute.

* The top 1 percent of taxpayers pay 38 percent of all the income taxes despite having just 20 percent of the income.
* The top 10 percent of taxpayers pay 70 percent of the income tax while having just 46 percent of the income.
* At the other end, the bottom 50 percent of taxpayers pay just 2.7 percent of the income tax while having 13 percent of the income.

This has resulted in a situation in which a relatively small minority of taxpayers pay the bulk of the taxes, while most American pay little or no income tax. This is causing an increasing disconnect between benefits from government and what most citizens pay for. One result is a greater polarization in the political realm where a majority of citizens increasingly demand more government benefits for which they want others to pay.

The Swedes were on this same destructive path, but they reversed course over the last couple of decades and made their tax system far less progressive, even though their tax rates at all levels are above most of those in the United States. The result has been a tempering of demand for new government services as people at all income levels realize they will be the ones paying for those services and not some mythical "rich" person. The side benefit is that Sweden, as a result of tax and other reforms, now has one of the highest economic growth rates in the world, says Rahn.

Source: Richard W. Rahn, "Tax Inequity," Washington Times, April 11,2011.

And additional information from Sweden;

Sweden may need to push through tax cuts at every budget if it is to reduce unemployment further, Finance Minister Anders Borg said.

“We have a lot of work to do to secure full employment,” Borg said at an event today arranged by Svenska Handelsbanken AB (SHBA) in Stockholm. “It will require that we make changes to taxes and spending in practically every budget going forward if we are to come down to unemployment rates in line with the best European countries.”

The government yesterday raised its economic growth forecasts for 2012 and 2013 and predicted budget surpluses, allowing it to cut taxes when most other European countries are grappling with austerity measures. The fastest-growing European economy will expand 4.6 percent this year, 3.8 percent in 2012 and 3.6 percent the following year, Borg said yesterday.

The krona strengthened 0.2 percent against the euro to 9.0224 at 9:40 a.m. in Stockholm. It jumped 0.9 percent yesterday following the government’s forecasts.

Unemployment fell to 7.9 percent in February from 8.2 percent the previous month, Statistics Sweden said on March 17, citing non-seasonally adjusted figures.

My conclusion?

A lot less government is still preferable BUT where it exists, paying for it should be as equitable as possible. Nothing would persuade me that paying an average tax rate of 57.77% was a good thing. Those economic growth rates in Sweden are similar to what NZ had in the mid 2000s without paying exorbitant (relatively speaking) tax rates. And the US has had similar rates under similarly progressive regimes as described above. There are far more factors affecting economic growth than tax rates alone.

(Out of interest, in NZ, based on income tax alone;

* The top 2 percent of taxpayers pay 17 percent of all the income taxes despite having just 20 percent of the income.
* The top 12 percent of taxpayers pay 49 percent of the income tax while having just 46 percent of the income.
* At the other end, the bottom 45 percent of taxpayers pay just 8 percent of the income tax.)

Goff can't copy Gillard

Two months ago Australian PM Julia Gillard made her first major economic speech of the year about getting people off benefits.

She has just re-iterated her focus on work in a further address. This is how she defines what Labor, her party, stands for;

In her speech to the Sydney Institute last night, Ms Gillard said Labor was ''politically, spiritually, even literally the party of work. The party of work not welfare, the party of opportunity not exclusion, the party of responsibility not idleness.''

Immediately one mentally contrasts this to the New Zealand Labour Party, and reflects on the latest attempt by one of their own to define his party. Something to do with geese.

Uninspired political leaders often look overseas to see what their counterparts are doing. But there isn't a cat's chance in hell that Phil Goff will come out saying what Gillard said. It would be judged utterly implausible and generate further public derision.

Which is very sad because it was once quite true. Ironically, when we had an Australian PM.

Power goes too far again

According to the NZ Herald;

Extended family and close friends of child abusers could face up to 10 years in prison if they turn a blind eye to abuse and do not report it.

Justice Minister Simon Power yesterday introduced changes aimed at protecting children from abuse and neglect, including a new offence making people who are close to a family liable if they do not report abuse to the authorities.

Another step too far.

It'll be interesting to see where the Maori Party fall on this one. Given Turia's drive to make more families responsible for their own to reduce family violence, will she support National on this one? It could play either way. More state involvement always leads to less personal responsibility. On the other hand the new punishment might be described as enforcing greater responsibility. No. I hope, along with the Greens (ACT are hopeless in this area) the Maori Party will denounce this.

It is clear that getting CYF involved in family problems is not necessarily the cure-all. It isn't difficult to conjure scenarios where a family member might be loathe to go to them or the police preferring to deal with a situation themselves. What about a mother who sees one of her children abused by a violent partner but the others left alone? She can plan to leave. In the interim she suspects that bringing the police into the picture will exacerbate matters. Ramp up the violence. Involve the other children. She makes a choice to try and resolve her situation herself and with help from other close friends she trusts and tells about the violence. They are also now culpable.

They weren't "doing nothing" but they failed to report the abuse. Will the two parts of the equation be separated?

I see other problems as well. The threshold for abuse and neglect is legally very low. A grandparent who has always smacked to discipline, and still does, should be reported by the parent lest he or she risks a jail term? Yes, my objection sounds vaguely silly but it's valid.

And what about people involved with families as volunteers or mentors? Someone working with a violent family who's task it is to change that behaviour? What if they fail and the police become involved. Retrospectively, is that person - who has become a "close friend" - now culpable?

And was the abuse actually seen, or is 'suspected' enough to make an associate take a walk? Imagine the finger-pointing when one person is going down.

We all know what kind of people Power is trying to net here. But his solution is going to be fraught.

One last question. If it's such a good idea why has it taken until now to think of?

Dressing down CPAG

Oh joy. Someone other than me having a go at the Child Poverty Action Group. Big ups to Dr Rosy Fenwicke for her column in yesterday's DomPost;

OPINION: KIWI mothers are battlers too. Donna Wynd and Susan St John need to be enlightened about this fact before they consign all mothers in New Zealand to the state-funded victimhood they seem to be advocating in their column Enlightening the Welfare Working Group.

Sometimes events beyond our control conspire to undermine our abilities to look after ourselves and our children, which is where a caring community kicks in.

The Welfare Working Group seems to be offering hope with help and the Child Poverty Action Group is offering help without hope to Nikki - the solo mother example. It is the second option that riles me the most.

Let's look again at Nikki. She has two children aged six and three and works part-time at night to help support her family. Let's not talk about a nebulous no-good partner, but give the father of her children an identity - Sam.

Sam and Nikki, for whatever reasons, have decided to split. Nikki keeps her night-time job because she likes it and it is the place where she is treated like an adult after day-long childcare. Sure, she is tired but sometimes she gets help from her family.

It does not require magic to continue working and looking after children. New Zealand mothers (and fathers) do this every day and we cope. Support is nice but not always available.

Accessible, safe and affordable childcare close to the workplace is essential, or mothers of children aged under five are not able to work. Once this is properly addressed, there are no barriers, other than choice, to a mother working after having children. Lots of us do it (alone). We have to. Our kids are fine.

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