Maharey back but no better

Ex Minister for Social Development, Steve Maharey, is back today in the DomPost claiming his welfare policies worked and there was no need for National to re-invent the wheel.
 

There is not the space here to list the policies developed to implement the framework, but it is worth noting that they were the result of a concerted effort to draw on the best of international and national thinking.

Did it work? Yes. Unemployment fell dramatically and the number of people on the domestic purposes benefit declined.

Unlike in all other OECD nations, the increase in the number of people claiming a benefit because of a disability or an illness began to slow.

Note the green band and below represent people who generally spend many more years on a benefit than those on the unemployment benefit. The vertical axis shows percentage of the working-age population. So under Labour inroads into dependence was not the big-tick  achieve Maharey claims.

Evaluation showed that the policies made a measurable difference. Treasury was so impressed when $300 million was returned to it in one year that it made the advances in social policy a feature in its annual report.

Despite this, when a change in government occurred, it was as if a new start had to be made. A welfare reform working party was established and it operated as if in a vacuum.

Years of experience were wasted. Now, we have a new policy framework which seems to be based on the idea that benefit numbers are rising because people do not want to work. History teaches us that this assumption is not well founded. There are those for whom work is anathema, but most people take work if they have the skills for the job, it pays a wage they can live on and details, such as having a safe place for their children to stay, are taken care of.
Sole parents are a good example. Although current policy portrays sole parents on a benefit as young and irresponsible, they are typically women in their early 30s who have left a relationship. They stay on the benefit for a few years at most and then get on with their lives.

How much better current policy would be if it had built on previous experience.

Maharey is still grinding the organ. We now have new research that presents rather a different picture. For example,
 

On average, sole parents receiving main benefits had more disadvantaged backgrounds than might have been expected:

·          just over half had spent at least 80% of the history period observed (the previous 10 years in most cases) supported by main benefits

·          a third appeared to have become parents in their teenage years.

This reflects the over-representation of sole parents with long stays on benefit among those in receipt at any point in time, and the longer than average stays on benefit for those who become parents as teenagers.

 

 "How much better current policy"  is now it is evidence-based.

29 percent of DPB population added babies to their benefit

Media Release

29 PERCENT OF DPB POPULATION ADDED BABIES TO THEIR BENEFIT

According to just-released Cabinet papers, at November 2011, 29 percent of single parents on the domestic purposes benefit had included additional newborn children in their benefit.

Welfare commentator Lindsay Mitchell said that the paper  describes how parents who have additional children are more likely to have started on the DPB with a newborn (rather than having exited a relationship with a child), and have no record of having been employed before, after or during spells on a benefit.

The paper also describes the higher incidence of Maori adding children to a benefit. It says that the on-benefit birth rate has increased between 1997 and 2010 from under 35  to 50 per 1,000 women receiving the DPB .

Mitchell says these are the circumstances that have prompted the government to introduce policy to reverse this trend.

"It is well-documented that children who spend many years in workless homes experience poorer social, health and educational outcomes. There can be no justification for adding children to a benefit received  on the basis that the mother is already unable to raise her children independently."

Where are the jobs?

Last week I did a guest stint on the Radio New Zealand Jim Mora panel with Findlay McDonald and Gary McCormick. They were both objecting to the DPB reforms on the basis of, where are the jobs? I made comments along the following lines (without the pictures!)

When the demographic change New Zealand is facing is taken into account, it is clear that labour force is going to shrink in relation to the non-labour force. 

The graph below shows that the ratio of the combined 0-14 and 65+ populations is going to grow from around 0.5/1 today to 0.7/1 over the next twenty years. The demand for goods and services continues from the non-working population thus increasing demand on the working-age population. Hence it is so important for the government to set in place the legislation that requires beneficiaries to work when jobs are available.

Source: Facing Fiscal Futures
(http://www.treasury.govt.nz/publications/media-speeches/speeches/fiscalfutures)

Although it has grown, New Zealand still has one of the lowest rates of single parent employment in the OECD. This is, at least in part, a reflection of New Zealand’s historically
open-ended and relatively generous DPB.

Sole parent employment rates across the OECD, around 2007

Source: OECD family database (www.oecd.org/els/social/family/database)

So there is ample evidence jobs will be there, particularly in the care and health sectors, and ample economic imperative for more sole mothers to participate in the workforce.

However, to my mind, an even more important aspect of increasing their participation is the positive benefit for their children. Breaking the inter-generational cycle of welfare dependence won’t happen until children live with at least one working parent who is building their own expectations of a similar life.

Welfare reforms in children's interest

The New Zealand Herald  today published my response to a column by Susan St John, spokesperson for the Child Poverty Action Group.

Why Key won't budge on Super

On Friday John Key was on Radio Live with co-hosts Rodney Hide and Willie Jackson. Jackson was predictably getting into Key about the welfare reform, especially the requirement for women who have an additional child on the benefit to be available for part-time work, but Key was fending off the objections effortlessly and convincingly.

I rang in to say that I supported the reform but to ask, given most countries are raising the eligibility age for pensions, that life expectancies are moving out, that people are staying healthy for longer, why did he commit to keeping the Super eligibility age at 65 and does he regret it?

You can hear the answer here if you select Friday and 12.30pm (towards the end of the half hour slot). But listen to the whole hour because Rodney talking with the PM is worth listening to.

Essentially in 2008 National were aware that Labour were planning a widespread campaign of misinformation saying Key was going to raise the Super age and he wanted to put that to bed. (Ironic when you remember that raising the age was Labour's best policy in 2011).

Key also said that Treasury advised him that there were bigger problems to tackle than Super - rising health costs for instance. Super wasn't that big an issue apparently.

Rodney observed that the Retirement Commissioner thinks it is however and pushed him on that a bit. I get cut off so missed the exchange.

So really we are stuck with around $1.5 - 2 billion worth of unnecessary spending because of politics. I believe voters are prepared to accept a staged raising of the age (similar to what is occurring in the US) and refusing to budge is going to be a problem for Key in 2014. What should National do?

Just a tad windy here

>

Childcare use increases as parents work more

Statistics NZ have just released a survey about childcare use and working arrangements and the change between 1998 and 2009.  I have summarised some of the key findings from the tables available:

The total percentage of children in some sort of formal care rose from 51.9 to 53.9 percent BUT it dropped significantly for Pacific children. Public kindergarten, kohanga reo, play centres had drops in percentages attending whereas playgroup, childcare centres and organised home-based care rose.

Employed parents rose from 67.5 to 73.4 percent. The biggest rise was for Maori from 47.4 to 61.0 percent; Pacific rose 53.4 to 62.4; and European 73.5 to 73.9 percent.

Employed mothers rose from 54.1 to 60.9 percent; fathers from 84.5 to 88.6 percent

Parents who worked in the weekend rose from 22.6 to 28.0 percent; Pacific parents  had the biggest increase from 12.8 to 24.9 followed by Maori from 19.4 to 28.5 ; European rose from 24.0 to 27.5 percent. The percentage of sole parents working in the weekend rose from 16.2 to 28.1 percent.

Children aged under one had a fall in the percentage in any sort of formal care from 15 to 12.9 percent. All other ages registered an increase.

The percentage of children in 'no cost'  childcare rose from 13.5 to 29.5 percent.

The median weekly hours spent in care rose from 10 to 17 hours.

Percentage of children attending out-of-school care almost doubled from 3.8 to 7.5 percent. The are with the largest percent in out-of-school acre was Wellington; the spread across ethnicity almost even.

The maternal occupation that showed the largest increase was 'professional' which rose from 18.2 to 26 percent. The equivalent statistics for paternal occupation rose from 13.1 to 15.9 percent.

"Poverty is no excuse"

The latest issue of Rise, MSD's magazine, contains the story of Henare and Pam O'Keefe, a Flaxmere couple who have fostered hundreds of abused and neglected children over many years. It's well worth reading and uplifts rather than depresses.

But what are the leftist poverty-pushing politicians and academia going to make of this?

Poverty, says Henare, is no excuse for abusing your family. He thinks back to his own childhood, in a dirt-floor home with no electricity and wonders how his parents managed to feed them all. “But I can recall nothing, but good.”

UK reforms to reduce benefit fraud

With respect to welfare, New Zealand appears to be following wherever the UK goes at the moment. The government has promised legislation that will deal with benefit fraud this term.

 "A second Bill containing an overhaul of benefit categories and a clamp down on fraud will be introduced in July."

Currently people who commit benefit fraud but are still in the community can simply stay on the benefit albeit with repayments (of fraudulently acquired sums) deducted. So it is interesting to see what Britain is doing:

New powers in the Welfare Reform Bill will introduce tougher penalties to deter fraudsters:

• Abolishing the option of accepting a caution

• A minimum administrative penalty of £350, or 50% of the overpayment, whichever is higher, with four weeks loss of benefit, even for attempted fraud

• Extended loss of benefit for offences, which result in a conviction, of 13 weeks for a first offence, then 26 weeks for a second offence and 3 years for a third offence

• An immediate 3 year loss of benefit for serious or organised benefit fraud or identity fraud

• A new £50 civil penalty in cases of claimant error which results in an overpayment due to negligence or failure

More misrepresentation of welfare numbers

Sometimes an idea gets purchase and is very hard to shift.  For example, under Labour, during the economic boom, the numbers of people on welfare plummeted. That is only true for those on the unemployment benefit. But here are two examples of recent statements  supporting this erroneous idea. Remember too that the reforms in the spotlight this week relate primarily to the DPB, so the reader assumes that when commentators refer to beneficiaries they mean those under discussion.

Duncan Garner:

Labour reduced the numbers of people on benefits drastically in 2004/05 when the economy was going gangbusters.

Gordon Campbell:

Less than ten years ago, a booming economy had reduced beneficiary numbers to historical lows.

Are either of these statements supported by the following graph?

(Click on the graph because it is difficult to see the grey shaded area that represents the unemployment benefit).

Tip of the iceberg

This is grim, but what can be said about Raurangi Marino?

That are thousands more potential Raurangi Marinos out there?

Put the  pieces together.

Gang members sire more children than most men.

 "Every Mongrel Mob man creates a line - that is the number of children they can produce. So they will have a couple of girlfriends and they might have a wife, and they will have mistresses, and they will be in on-and-off relationships," he said.

The number of gang members incarcerated is growing.

The number of inmates with gang affiliations has doubled in the past five years and the Corrections Department is developing a programme to help offenders break their ties. Gang members are almost twice as likely as other prisoners to reoffend within 12 months of leaving prison, at a rate of 41 per cent compared with 22 per cent.

The percentage of Maori children who are abused or neglected is way out of kilter with their share of the general population and shows no sign of declining.

And the economy that fuels all this, welfare, is disproportionately taken up by Maori with 46 percent of their females aged between 20 and 30 on a benefit.

And this is relevant also.


In Nga Iwi o te Motu, the late Michael King wrote: 

[Peter]  Buck  wrote  in  his  annual  report  [as  Native  health  officer],  “The [Maori]  communism  of  the  past  meant  industry,  training  in  arms,  good physique, the keeping of the law, the sharing of the tribal burden, and the preservation of life. The communism of today means indolence, sloth, decay of   racial   vigour,   the   crushing   of   individual   effort,   the   spreading   of introduced  infections,  diseases,  and  the  many  evils  that  are  petrifying  his advance.” [Maui] Pomare added: “The Maori having been an active race and always having been kept in a state of excitement by wars and the rumour of wars,  can  now  only  find  vent  for  his  feelings  on  the  racecourse,  gambling and billiard-playing, with an occasional bout in the Land court”.

And in gangs.

Gordon Campbell's misrepresentations

I have been commenting on Gordon Campbell's blog , once again rebutting his emotive and inaccurate claims about welfare, and welfare reforms. Here is one I haven't tackled yet:

Blaming the welfare system for the current existence of poverty is like seeing the incidence of Third World diseases in this country, and blaming it on the existence of hospitals.

I do blame the welfare system for the current level of 'poverty'. James L Payne puts it best:

Any pattern of repeated giving reinforces whatever prompted the gift … thus we arrive at a great paradox, what I call the ‘aggravation principle’ of sympathetic giving: repeated giving prompted by the misfortune of recipients tends to increase the misfortune.

Treating disease does not increase the incidence of it.

At least I understood Sue Bradford

New Green MP Jan Logie has blogged about her opposition to the measures that will affect a woman who adds a child to her benefit.

"Anyone who has reflected on their own behaviour, let alone worked in family planning or youth health, will acknowledge that fertility and sexual relationships are very complex. We have to acknowledge all the possible reasons people have sex, and there are hundreds, and the things that can go wrong and result in an unplanned pregnancy are also many fold. The ideal of safely negotiated sexual relations that use barrier protection and a back- up contraception must be recognised as the ideal rather than the norm.

This may sound like an argument for the provision of contraception, but bodily integrity and sexual agency are two things we must value above budget lines."

I confess to having trouble getting past the "hundreds" of reasons that people have sex.

To get pregnant, keep warm, have an orgasm, for exercise, to avoid an argument, for money....Yep. Six and I'm starting to get stuck here. I should be ashamed to show my lack of imagination probably. Oh, I just thought of another one. To stimulate labour. Did you know that one?

And what does this mean? "...bodily integrity and sexual agency are two things we must value above budget lines." Sounds very high-faluting. I need help with that one too.

People should be free to do whatever they like in the bedroom but they can't be free to force the consequences on someone else. How hard is it to grasp? A better choice of words might be advisable...but you get my drift.

One thing, at least I understood Sue Bradford.

Treasury view of welfare reforms and Youth Pipeline

The most significant welfare reform for me is that private providers will be contracted to manage 16,17 and 18 year-olds.

According to the NZ Herald:

From July, up to 14,000 teenagers aged 16 and 17 who are not in education, work or training and teen parents aged 16 to 18 will be coupled with a private provider to help them with budgeting courses, parenting courses, training or job-hunting.

Their basic costs such as rent and power will be paid by the state, and they will have a payment card for living costs that can be monitored to ensure they do not buy alcohol or cigarettes.

Cabinet has released a paper that discusses the welfare changes up and coming. Some sections have been removed.  In the paper there is reference to the Youth Package and Youth Pipeline. I am guessing these are the names the youth reforms has been given. Under Treasury comment, it states:

As at October 19 [2011] Treasury does not support Youth Package and Youth Pipeline IT systems. The business case was assessed as being high risk under the Risk Profile Assessment and Better Business Cases criteria....in particular we have questions about the extent to which the Youth Pipeline system is suitable for extending for wider welfare reform, the degree of risk.

I assume they refer to risk for the taxpayer as opposed to risk for the beneficiary.

Treasury also thought that the JobSeeker Support (replacement for unemployment benefit) should include sole parents with a youngest child between 5 and 14. "It would also send a clear signal that sole parents are expected to be 'jobseekers'."

They also believed that qualifying criteria for the Supported Living Payment (replacement for the invalid Benefit) should be made on an individual basis as opposed to "generalising based on particular disabilities. In some cases beneficiaries  with severe disabilities will be able to work, and the agency should be given the ability to support these people into greater independence."

Interesting.

Welfare Reforms - the good and the bad

My interview with Larry Williams NewstalkZB on the back of a pre-record with Paula Bennett about the welfare reforms (re)announced today. Continues here.

The opposition responses focus on the lack of jobs. This misses the point that legislation has to be put in place that requires people to take jobs as they become available. And I have made the point many times that the rapidly ageing population is going to radically increase demand for social and health-caring labour capacity; ideal for mothers entering or re-entering the workforce.

The Greens are tackling the 1 year only exemption from work obligations for those mothers who add a child to their benefit, claiming that mothering in the early years is absolutely critical. If stay at home mothering produced the happiest, best-adjusted children then the DPB-raised cohort should be head and shoulders above. It isn't.

Public support for welfare dwindles

Writing for The Observer Andrew Rawnsley describes the division between taxpayer support for public health and support for welfare, the two biggest items of government expenditure. His assessment would probably hold true in this country:

"... the public has developed very different attitudes towards these legacies of the postwar Labour government. The core principle of the NHS – that health care should be provided to all regardless of the ability to pay or how you have conducted your life – continues to enjoy enormous support. Few regard the health service as perfect, but it is better regarded by the public than most other national institutions. People still believe it is worth spending taxpayers' money on the NHS, which is why David Cameron gave its budget some protection from the squeeze imposed in other areas.

That sort of approval no longer exists for the benefits system. There is instead hostility to the idea that welfare should be an unconditional safety net. The public still has quite generous attitudes to specific groups that are seen as vulnerable, especially children, the old and the disabled. But there is a very wide and entrenched view that the benefits system is directing too much money to the wrong people. This is illustrated by some recent polling by YouGov for Prospect. It found that 74% of voters think that Britain shells out too much on welfare and should cut the amount spent on benefits. Only 17% disagreed."

Go further Banks

John Banks is making noise about the proposed $1.6 million tax-payer funding of New Zealand's Got Talent.

John Banks is unimpressed at the injection of $1.6 million of taxpayers' money to help fund 'New Zealand's Got Talent'. Part of the cost of making the series is coming from public arts and culture funding. But the ACT leader says while the show is nice to have, it's something the country can't afford when we're borrowing millions a week to stay afloat. He thinks a commercial sponsor should be found.

Of course I agree, but would nevertheless make this observation. If I had to choose where I least minded the 'arts and culture' funding going it would probably be on a mainstream popular show like this. Rather than some avant-garde, minority-taste 'art' of which we have seen many dreadful examples. At least a talent show which ultimately rests on  public voting  can actually sort out the wheat from the chaff. Unlike those elitists who accept funding applications for pointless installations at public galleries - the only kind that will host them.

But Banks should really have gone further (and may have but not been reported) and objected to the entire arts and culture budget which has grown obscenely during the recession. Heritage, Culture and Recreation spending in millions from 2007 to 2012 (final year is an estimate):

2007 $844
2008 $1,107
2009 $1,002
2010 $1,281
2011 $1,966
 2012 $2,490

Who is Damien Grant?

A Herald on Sunday column after my own heart (although I have commented with a partial defence of the subject used to highlight his point). But who is Damien Grant?

The top 2 per cent of taxpayers, 58,000 of them, pay 17 per cent of the tax total. An average of $65,000 each, and that doesn't include what they pay in GST or company tax.

And when these citizen-heroes open their newspapers on a weekend they read that, despite paying vastly more than their fair shares of taxes and their money going to feed a bottomless welfare pit, we are facing rising levels of inequality and declining competitiveness.

 More

Update. By pure coincidence, now I have googled him, I see Cactus Kate wrote a blogpost in 2006 with exactly the same title, "Who is Damien Grant?"

Fewer births in 2011

In past years I have blogged about the rise in the teenage birth rate.

Now it is falling. NZ Statistics recently released the 2011 (year ended December) birth statistics.

The 2011 birthrate per 1,000 15-19 year-olds has fallen three whole points from 2010.  It was 28.8 (per 1,000 females aged 15-19) in 2010 and has dropped to 25.8 in 2011 - in 2008 it had climbed to 32.8

This is encouraging but I am not sure what is driving it. There was a similar drop from the late 1990s to the early 2000s (and similar numbers).

In 2011 there were rate-drops in every age group as the number of births fell from 63,897 to 61,403.

Changes as big as this do represent some behavioural/thinking change I think. The recession? But during the last recession of the early nineties births peaked. This recession they are falling, with a slight lag:

The steep incline during 2006-08 may have been an effect of WFF. That might be described as an 'artificial' increase resulting in an apparent decline thereafter as 'normal'  behaviour resumed.  Abortions have also fallen and the morning-after pill is now available. There are, of course, other underlying sub-group trends categorised by income, ethnicity, and age.

I do wonder though whether  (the prospect of) tougher welfare conditions is having some effect. Last time National was in government and they talked tough on the DPB, introduced work-testing (in 1998 from memory) there was similar decline in the teenage birthrate.

We live in "sinful and tyrannical" times

"To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical." -- Thomas Jefferson