Beliefs that fly in the face of evidence

 According to the British Adam Smith Institute:

It is a truth universally acknowledged that the UK is in something of a housing crisis. Home ownership has been declining for half a century. 90% of 25-34 year olds face average regional housing prices 3 to 4 times their income, up from less than half 20 years ago. Rent as a share of income has been rising, making the prospect of saving for mortgage deposit increasingly remote. 

Odd. Afterall the United Kingdom has a capital gains tax, apparently the solution to our housing crisis.

Unable to gain popular support for one here, Ardern still believes NZ should do the same:

Despite ruling out ever introducing a capital gains tax, Prime Minister Jacinda Ardern still believes New Zealand should have one.

Asked on Newshub Nation if she had "betrayed" Labour supporters by canning plans to introduce one after the 2020 election, Ardern said no.

"I've certainly not had that feedback from people that they take that view," she told host Simon Shepherd on Saturday morning.

"Did I believe in it? Yes. Still do."

 

Stuff: "Little evidence of child poverty coming down"

Stuff is writing a series called 'The Whole Truth' running up to the election. It aims to fact-check campaign claims, party policies and achievements. Today they feature a piece on child poverty which also appears in the Dominion Post. I've included the entire short piece (because it is the simplest summation of the measures I've read) and added  a few of my own comments:

"There is little evidence, on the Government’s own measures, of child poverty coming down.

As one of her Government’s earliest acts, Prime Minister Jacinda Ardern brought in the Child Poverty Act in 2018. It established ways of measuring poverty and laid out a series of targets against them.

There are three primary measures of poverty in the Act, two of which are income-based.

For these income measures, a mathematical model is used to “equivalise”, or flatten, the incomes of different households.

This allows a consistent measure to be applied across households of all different sizes. Larger households need more income to manage than smaller households do.As a result, there is no specific income figure under which all households are said to be living in poverty.

However, the government’s first measure for child poverty does say that a child is living in poverty if they’re in a home with an income less than half the average, equivalised disposable household income, before housing costs are deducted. 

(The average disposable household income, before housing costs, is currently $46,700 a year, according to Stats NZ.)

What do the numbers look like using this measure?

Ardern set a 2020/21 target of lifting 70,000 children above this line. That would mean shrinking the 2018 measure of 16.5 per cent of children to 10 per cent.

As of June 2019, the latest available figures, this measure was down by only 1.6 percentage points to 14.9 per cent. Instead of 183,500 children in poverty, there were 168,500.

There is another, similar sort of measure, which has recorded similar results to date.

Again, a child is considered in poverty if they’re in a home with an income less than half the average, equivalised disposable household income, but this time after housing costs are deducted.

(The average disposable housing income after housing costs is $35,800 a year.)

The target for this measure is a 4 per cent shift, or lifting 40,000 children from poverty. 

The 253,800 impoverished children first counted by this measure in 2018 reduced 2 percentage points in the year to June 2019, to 235,400 children.

A third measure goes more directly at material hardship. It defines a child as impoverished if they live in a home that lacks six or more key indicators, such as a home that lacks shoes, fresh fruit or vegetables, the ability to see a doctor, or the ability to pay power bills.  

This measure is favoured by Children’s Commissioner Judge Andrew Becroft, who says it’s a better measure of a child’s life at home. 

On this measure, the number of children in poverty has increased by 4100 in the year to June 2019, up 0.4 percentage points to 13.4 per cent. 

The shifts on all three measures are so small that they fall within the margins of error for each. 

And due to the lag in the data, it’s hard to know how recent events have affected New Zealand’s poorest children.

Despite this, Ardern has frequently cited a Treasury estimate that the number of children in poverty would reduce between 10 per cent and 12 per cent due to policies like the 2018 Families Package."

She also claims that poverty has fallen on 7 of the 9 measures. However only one of the small reductions is outside of the margin of error (-2% vs + or -1.9%). The margin of error exists because the results come from a survey of just 20,000 households. 

StatsNZ itself says, "...most of the changes likely reflect the expected uncertainties present in all sample surveys."

The Minister for Child Poverty Reduction also ignores that more children are now on benefits. That was the case BEFORE Covid. At December 2019 there were 12,000 more children on benefits than at December 2017. The number of children on welfare should actually represent one of the measures.

The writer, Thomas Manch, has unusually mentioned the equivalisation method. This means a large family with a relatively high income can appear in the poverty data. A household income gets equivalised down progressively based on household members.

Finally, the data is only till June 2019 - almost 15 months old. If the June 2020 data is released pre-election the PM will undoubtedly blame her lack of progress on Covid.

And that will represent yet another obfuscation.

Where does NZ's GDP drop sit comparatively?

NZ's  GDP fell by 12.2% in the June Quarter.

Here are some other country comparisons:

(Click on source for interactive image)

The yellow bar (10.7%) represents the average of the G7 countries: Canada, France, Germany, Italy, Japan, the UK and US

Taxation out. Revenue Raising in.

Have you noticed that Labour no longer has a Tax Policy - only a Revenue Policy? Grant Robertson uses the term constantly. Now I see the Greens have joined in with a press release entitled, All Healthy, Now We Need To Revenue Raise.

They sound like a charity talking about the need to fundraise. But that involves persuading people to part with their money for a worthy cause.

Revenue raising requires legislated forcible removal of poeple's wealth for expenditure they may not agree with or benefit from. 

How stupid do they think we are?

Tax wasn't love and neither is revenue raising.

PREFU forecasts

Forecasts of Jobseeker and Emergency benefit numbers over the next few years are very fluid.

According to today's PREFU:

"The number of Jobseeker Support and Emergency Benefit recipients is expected to increase by 89,000 by 2020/21 compared with 2019/20 and then increase further in 2021/22 to peak at 279,000, before reducing to 246,000 recipients by 2023/24, 84,000 (an increase of 52%) more recipients than 2019/20." P56

That immediately struck me as lower than prior forecasts. This chart shows the earlier BEFU forcast:

Personally I still think it is too early to make any reasonable projections. 

You might argue the PREFU projection is more optimistic in the short term (more politically palatable?) but it is more pessimistic in the longer term.

 

Stop the world, I wanna get off

I've become a huge golf fan. Because I started playing. 

A close childhood friend came from Australia to celebrate our sixtieth birthdays together and she brought me her old clubs. Checked them in on her flight ensconsed in a bag and carrier. 

Briefly, around 32, I played for a few months and introduced her to the game. Then I got married, had a family and never held a club again. But she did. And she brought me her old clubs (replaced by a new supa dupa set) to rekindle my interest and entice me to go on an Australian golfing holiday with her at some future date.

So I joined the Hutt Park Club which has a slightly rumpty 9 hole course with a primary retail operation and driving range. Now I am addicted.

Every night I watch various instalments of the Master's Tournament. The players are my characters. It's like watching movies. Who will beat adversity this time? Who will hold his nerve this time?

Anyway, I'll get to the point of my post.

I'm watching the crowds following Tiger Woods ... in any of the five years in which he won the Green Jacket. And soaking up the sheer exuberance of the fans, his family and Tiger himself when he finally let's the emotion erupt at the 18th.

Is this jubilant, pressing crowd, thousands spread across the course, a thing of the past?

Are we ever going to come back to our senses as a world and relish what we love?

Golf is currently my thing. But you must have had that moment when you stopped in your tracks and said to yourself, "Is pre-Covid the freest we were ever going to be?"

Because it's not just Covid. We're are all well aware of it.

It's social media mindless collectivism which is powerful beyond reason. Think about that. Power beyond reason.

What is going to happen to Comedy in this aggressive, angry, anti-self expression age? When on-line self-appraised 'benign' bullies wield more power than those they wrongly label 'racists, xenophobes and misogynists.'

As we are progressively  sometimes literally held responsible for the so-called sins of our great grand fathers and denied the products of their culture, what great new standard is it we will all be made to hold ourselves to?

Can we not be imperfect humans, irrevant humans, irascible humans, imaginative humans from here on in?

If not, I'll vacate far more happily than should be the case.

Damien Grant on cannabis legalisation

Good discussion from Damien Grant, a committed libertarian. I must be getting intellectually lazy because I want someone to convince me which way to vote instead of making my own mind up. And Grant seems like a good candidate coming down on the 'yes' side due only to the immorality of prohibition, my major impetus towards the same decision. But in the process he highlights the sheer nuttiness of the proposed legislation. This in particular rankles with me. With regard to the new governmental agency to be established, the Cannabis Regulatory Authority :

The Authority must prioritise non-for-profit applicants for licences and applicants that can “...demonstrate a commitment to delivering social benefit to the community or communities…”

I mean, why? The idea is to end the failed prohibition of marijuana by allowing pot-heads to buy their weed from a shop rather than a criminal gang, not tack onto a simple retail operation a range of social justice obligations.

More of the virtue signalling lunacy the Kiwibank is indulging in. Who knows what sort of legislation will develop once given the Green light. I keep feeling as if I am being sold a lemon. What's worse, a useless Green lemon.

So sorry Damien. I am still on the friggin' fence.

I may abstain.

Labour's welfare plan: Recycled policy which flies in face of evidence

 According to RNZ today:

Under Labour's welfare plan, the training incentive allowance for higher skilled courses would be reinstated, and people on a benefit and working part-time would be able to earn more.

The training incentive allowance (TIA) was scrapped because of Treasury advice to the first Welfare Working Group (Rebstock 2009):

Fifty-one percent of DPB recipients participating in an intervention took the Training Incentive Allowance, which MSD found to have no effect on the time a beneficiary was likely to spend off benefit – in fact the study found there was a chance TIA slightly increased the average time spent on benefit. MSD did note there was a chance that TIA may have an unobserved long-term impact (after seven years) on time spent off benefit.

The TIA allowed people people to extend their study and spend more time dependent. Given National's goal was to reduce dependency it was decided to spend the money elsewhere. From memory in more basic skills training aimed at getting more people, particularly poorly educated mothers, into the workforce.

Labour would also increase abatement thresholds so people could earn more in part-time work - up to $160 a week, before their benefit is reduced, about eight hours on the minimum wage. At the moment benefits start reducing for any earnings over $90 a week for someone on Jobseeker support.

The thresholds would also increase for Sole Parent Support the Supported Living Payment.

"This will enable people to keep more of what they earn and increase the financial incentive to stay in or take up part-time work."

It actually encourages people to cap their work hours and spend the rest of the time on welfare. Instead of people becoming independent of welfare they take advantage of a mix.

Labour is truly devoid of new ideas in the welfare area and has spent three years simply undoing measures that National had implemented for good reasons in the previous nine. 

But it's even worse. They have undone policies championed by the last Labour government, such is the influence of the Green party.

Working age benefit receipt nudges up to 12.1%

Working age benefit receipt has nudged up to 12.1%. At the height of the GFC it reached 12.4%

In the week to September 4 a further 1,702 people went on a jobseeker benefit.

However 6,203 came off the Covid Income Relief payment (that's the difference between grants and cancels weekly.)

It seems odd that the two numbers aren't closer until you read that,

There were 7,538 cancels off CIRP for the reason ‘End of Entitlement’ during the week ending 4 September 2020. A CIRP client may not have received their full entitlement at the time of the cancellation, and will receive the remainder of the entitlement over subsequent pay-dates.

So there seems to be some lag in the system meaning cancellations won't immediately lead to a transfer to a Jobseeker benefit. And some people who have been recieving the CIRP won't qualify for the Jobseeker benefit either.

It's all a bit of a mess.

Labour is no friend to low income Maori and beneficiaries

 I've spoken out against benefit dependence for a couple of decades. It's not personal. I have no bone to pick with individuals. My opposition has always been to the 'system' which draws people in and traps them, and the cockeyed incentives that reward lack of life-ownership. My idea of getting people off welfare was never to misery them into it. Letting them taste the experience of work and mates and good earning prospects is the best road to long term independence. Not forgetting that some people - a minority - have little choice but to stay on welfare due to accident and illness.

Here are two charts from Stats NZ showing how much of their income Maori and beneficiaries are forking out for rent and cigarettes compared to others. At the March 2020 quarter:

The Labour government kept up the tobacco tax hikes through to 2020 and significantly increased landlord costs driving up rents.

They are no friend of those they pretend to be.

Children's Commissioner thinks more children on benefits is OK

 

Since becoming Children's Commissioner, Andrew Becroft's strong left leanings have become increasingly apparent. In this interview he gets right into blaming Rogernomics and neoliberalism for child poverty. 

But this is the soundbite I heard:

Becroft says the present Government has done more than any previous regimes to help kids out of poverty. 

"We were well-placed to deliver this year, but I guess COVID wrecked all that. I just hope we don't drop the ball next year." 

He cited the Families Package and linking benefits to the average wage as achievements by the current government.

If NZ was "well-placed to deliver"  earlier this year then the Commissioner must be comfortable with 12,000 more children being on benefits.

At 31 December 2019 there were 206,395 children aged 0-18 reliant on caregiver on a main benefit (185,930), Young Parent Payment (1,531) or Orphan/ Unsupported Child benefit (18,934). That's 6 percent higher than at December 31, 2017.

Of the 59,637 births during 2019 10,882 babies were welfare-dependent by year end. Nearly one in five. Over half - 57% - were added to an existing benefit.

New Zealand's child poverty problem cannot be solved when high numbers of children live in non-working homes. Raising benefits and reducing the income margin between work and welfare will only incentivise more people to opt for welfare. This normalises benefit dependency for their children and the habit becomes inter-generational.

In 2008 Finance Minister Michael Cullen said, "...it is desirable to create a margin between being dependent on a benefit and being in employment....

The Labour Party isn’t the party that says living on a benefit is a preferred lifestyle. Its position has always been that the benefit system is a safety net for those who are unavoidably unable to participate in employment. From its history, the Labour Party has always been about people in employment."

The more the current Labour government ignores this, the more intractable the child poverty problem will become.

Same goes for the Children's Commissioner.

What we don't know is probably more relevant to policy

 A just-released MSD paper examines the family structure of Maori children.

Two data sources were used, Census and Growing Up in NZ. 

First the Census data:

You will notice that these numbers cannot represent all children. They are too low. The paper explains:

We selected children who were able to be linked across all three censuses by Stats NZ. Overall, 59 percent of the child population aged 0–4 years in 2001 and captured in the linked census files was linked to data in the two subsequent censuses (2006 and 2013). Among tamariki Māori, this drops to 53 percent. Some of the ‘missed’ links can be attributed to demographic factors, such as emigration and mortality, but a larger proportion of these false negatives are likely due to incomplete or inconsistent identifying information on children, which means they are not able to be linked. 

The paper states:

"... the share of tamariki Māori ever living in a family with two-parents only (67.5 percent) was significantly lower than among all Aotearoa NZ children (80.2 percent)."

I am wondering why a comparison wasn't drawn between Maori and non-Maori? So I made another table subtracting the Tamariki Maori data from the All Children data.

Now the gap between Tamariki Māori ever living in a family with two-parents only (67.5 percent) and non-Maori NZ children (84 percent) widens.

Another finding (mine) 50.1% of Maori children aged 0-4 in 2001 were in a non- two parent family. This compares to 30.6% for non-Maori.

But this is still tenuous stuff due to all the missing data.

And it gets worse with the GUiNZ data.

It's probably enough to quote from the paper:

These [GUiNZ] longitudinal data allowed for the examination of family structure over multiple time points across early childhood. In this report, we examine family structure data available at antenatal, and when the focal child was 9-months, 23-months (ie nearly 2-years old) and 45-months old (ie nearly 3.5-years old). Family structure was not available at the 54-month wave (ie when the child was nearly 4.5-years old) – the wave in which child outcomes were measured. In total, we were able to include family structure measures at four time points.

In the externally available GUiNZ dataset, family structure is coded by the GUiNZ research team into four mutually exclusive groups from a household roster reported by the primary respondent (mostly the biological mother). These are:

1. living with two parents and no other adults

2. living with one parent and no other adults

3. living with one or two parents, and other adults who are kin

4. living with one or two parents, and other adults who are not kin (and potentially other

adults who are kin).

It is important to note four primary limitations in this conceptualisation of family structure. (My emphasis)

I am constantly frustrated by data limitations because relationship status between parents, and parents and children in some cases, is ignored.

I am not a political conservative. But science finds committed parents (mostly manifested through a marriage) stay together more than any other co-producers of children. Their children demonstrably benefit from this. Most sociologists - and governments by extension -  are impervious though.

Low institutional trust by ethnicity

 Despite considerable variation between groups Parliament is the least trusted institution regardless.

Is that directly related to low voter turn-out I wonder? I don't particularly trust parliament but I still vote. I don't trust select committees to be impartial. Neither do I trust the current speaker to be neutral.When OIA responses are severely redacted or reports withheld  I don't trust claims of transparency.

Why is Asian trust the highest? Is it comparative to their country of origin parliaments?

I like graphs that pose more questions than they answer.

Cruel "benefit cuts"?

 Someone mentioned to me that the government were going to cut benefits. "They're cutting our incomes!"

What??

Turns out they were talking about the "benefit cuts" combined advocates are now calling the end of the winter energy payment.

For instance:

Incomes are scheduled to be cut by up to $63 a week for many of New Zealand’s lowest-income households in less than a month, but Child Poverty Action Group (CPAG) and Auckland Action Against Poverty (AAAP) are both urging the Government to immediately raise family incomes instead, as an ongoing crisis-response measure. Families and couples receiving benefits and New Zealand Superannuation are set to get $63 less a week, and singles $41 less a week, from 1 October when the Winter Energy Payment (WEP) period ends.

But this is disingenuous.

The winter energy payment is a subsidy on higher heating costs through winter.

Those costs reduce as we move into spring and summer. 

Labour can't take a trick at the moment.

The WEP was 'kind'.

But taking it away is 'cruel'.

NZ fertility falls to just 1.69

News flash.

New Zealand's fertility rate has fallen to just 1.69, the lowest in a century. We hovered around replacement rate - better than most western nations - for decades but that pattern is well and truly over.

I wrote a paper about this subject which Family First published last year. Here is a historical graph.

Falling fertility is almost uniform across the developed world. Elsewhere only India (just over replacement level)  and Africa are seeing growth and even in those populations the growth is slowing.

Centrist parties = policy creep

Paid Parental Leave (PPL) is quite a recent development.

In the 1990s you could take unpaid leave up to a year, the circumstances in which my first was born. I was amazed to find the company I worked for had to keep my job available to me for 12 months.

Alliance MP Laila Harre introduced a PPL private members bill but in 1998 it was voted down.

However, after Labour was voted in at the end of the nineties, they adopted it as general policy in 2001 to be introduced soon after.

From there the entitlement has grown incrementally.

Most recently it was extended to 26 weeks.

Now National is effectively promising another extension through their $3-6,000 child services entitlement.

The point of my post is to highlight that having two centrist parties means entitlements can only grow as they vie for your votes by promising ever more.

Do I have $75 for National's new child policy?

 Right now, not really. At $226 million that's roughly what it will cost each taxpayer (courtesy of my matchbox calculations of 3m payers.)

All new parents can access up to $3,000 in services. National MP Louise Upston told Heather du Plessis Allan this could be, for instance, extra paid parental leave days so you can count on the maximum entitlement being drawn on. For mothers with "higher needs" the entitlement could go as high as $6,000. Not sure how 'higher needs' will be defined.

Now, remember, this is on top of the Best Start policy Labour introduced which gives $3,000 cash annually universally in the first 365 days and to most in the first three years.

Why aren't parents using that funding to 'buy services'?

I mean, where does this largesse end?

Have you made up your mind re cannabis vote?

 A Horizon poll says the decision is split 49.5% vs 49.5%.

I am somewhat ashamed to say I am still vacillating.

The age group I fall in exactly reflects the 50/50 split.

One prediction I will make is if traditional voting behaviour holds up, it won't pass. 

BTW the reporter was incorrect in describing ACT's view. ACT does not have a position supporting the change.

Expenditure on emergency housing more than doubles in a year

 Yesterday I posted about the unsustainable practice of housing people in emergency housing, namely motels, holiday parks, backpackers, etc. Here are the grants and amounts per quarter up to June 2019:

Here is an update:

Compared to the March 2019 quater the expenditure has more than doubled. In fact it increased 134 percent.

The downsides of technology

Had a collosal melt-down today losing access to my artist blog. For some reason the address it was linked to has disapeared (it was a Windowslive address) so I can't get into it. The blog will stay there 'forever' as I can also never delete it. So I've had to start up a new one linked to yet another email address, Lindsay Mitchell Artwork, for updates. To establish it I've put up some paintings not at the artist site. A very frustrating day also occupied by hand altering artist business cards after Clear decided they would no longer offer email services. Who can afford to throw away hundreds of cards?