Benefit income versus income from work

 Another graph from Perry's latest report:

This is a depiction of core benefits compared to before tax minimum wage and after tax average wage. Note Accommodation Supplement, Winter Energy Payment and Best Start are not included.

The AS pays a maximum rate of $305 for a sole parent with two children. If one child was receiving Best Start that's another $60 and the Winter Energy Payment is $32.

If someone on the blue line (DPB/SPS +2ch) was receiving these extra payments it would push the line up to almost the 'after tax average wage' line.

I accept that rents are very high and the sole parent is still struggling.

But I come back to the reality that being a sole parent is a viable option if that's the environment in which you were raised. And it's only going to become more viable.

From April 1, 2021 beneficiaries can earn up to $160 before their benefit is reduced. This is a large rise from the previous $90 on Jobseeker and $115 on Sole Parent Support. 

Add that to the blue line and it'll push it above the 'after tax average wage' line.

It is an unavoidable conclusion that dependency on the state is set to grow.

Child hardship: controlling for education almost removes ethnic differences

Bryan Perry writes reports about incomes for MSD and has done so for years. I admire and respect his work.

Child Poverty in New Zealand, released today, contains the following child material-wellbeing graphs. Wellbeing is measured not by household income but by asking parents about what they can or can't afford in respect of lifestyle eg heat house or run a car and specifically for their children eg two pairs of shoes or a waterproof coat.

"The six groupings range from material hardship (red) through to very well off (dark green on the right). 

The next breaks the groupings into households where the highest educational qualification is a tertiary degree:

Perry comments re the second graph:

"There is a greater similarity for the material wellbeing profiles for these children across the ethnic groupings than there is when all children are looked at,though some differences are still evident."

The profile for Maori children almost inverts if the household features a parent or caregiver with a tertiary degree, and looks a lot more like NZ European or Asian.

Stuart Nash on unemployability

The following exchange took place between Mike Hosking and Stuart Nash on NewstalkZB (8:15) this morning:

MH: TV One last night, so you pay people $5,000 to move to a job ... claim is 1/ they quit when they arrive and scarper 2/ you guys at the Ministry no longer follow up. Why?

SN: Yeah, I heard that Mike and I'm not aware of that. I will follow that up because if it is happening it's completely against the spirit of the policy and programme. I'll see if it is happening and if MSD aren't following up or people are abusing the system in that way then that's wrong.

MH: And the Ministry has also given up on social checks. So the social responsibility that was brought in  by National in 2013 - you enrol your kid wuth a doctor, you get your kid into school, and that's part of being on welfare - you've given up chasing that as well because you claim it's too administratively difficult. How is that possible?

SN: I'm not aware of that Mike. But one thing we are doing and one thing we do do is ensure that people are work ready. So if you are on a Jobseeker benefit we work really hard to make sure you can get into a job and we've got one of the lowest unemployment numbers in the OECD...

MH/ Why do we have 115,000 people on unemployment longer than 12 months if there are so many jobs and they are all work ready?

SN/ What economists will tell you - and this is under any government - well, it varies between 3 and 4 percent of the workforce is unemployable. This is where the marginal cost of getting that person into work is just huge. What we do do is work incredibly hard with those people who want to get into work which is to be honest the vast majority of New Zealanders. There's always been, Mike, that rump at the bottom who don't want to work or it's very impossible to get them to work or there is some reason why they can't work.

 This is the first time I have heard a government MP talk about accepting unemployability. 'Shrug - it's just a fact of life.'

Neither am I aware of economists agreeing on some inherent level of unemployability occurrence. Economists do talk about a minimum unemployment rate of around 3-4 percent which will always exist as people move between jobs and are not working.

People couldn't become unemployable if there wasn't an alternative to working for money. The benefit system creates a vicious cycle. Paying indefinite benefits makes some people unemployable therefore requiring more benefits.

Just last week Nash said gangs aren't a problem ("You have nothing to fear")  and now he says unemployability should be tolerated. 

What a no-hoper - literally.

Seymour twice as popular as Prebble

David Farrar has gone back through poll archives to see if any other ACT leader ever surpassed David Seymour's current rating at 6% as preferred Prime Minister. Here's what he found:

* Richard Prebble (96-04): 3%

* Rodney Hide  (04-11): 1%

* Don Brash (11): 0.8%

* John Banks (12-14): 0.2%

You have to hand it to Seymour after so many years as a solitary MP. He never wavered. Exactly the kind of attitude and perserverance NZ needs. 

1930-40s housing problem and political propaganda

 A poster at the BFD put up this comment and 1930s pictorial:

"I wonder if in election 2023 we will see back to the future advertising?"

Come 1943 and National was counteracting with this:

I wonder if in another 70 to 80 years - a lifetime - NZ will still be yo-yoing between the two?

'Cousins' the movie

I went to see the movie version of Patricia Grace's story 'Cousins' today.

Witi Ihimaera's 'Mahana' was a hit with me - 'White Lies' to a lesser degree -  so I thought I'd give this one a go.

Three female cousins of a similar age (born post WW11) form the core of the story.

One is estranged from an early age due to her mixed parentage. She is in the legal guardianship of a nasty, drunken, Pakeha matriarch who doesn't want the child to have anything to do with her Maori side. That plays out through the film.

It moves about chronologically alot. Between childhood; young adulthood and the present.

The child who is 'stolen' (words used in the film) suffers mentally and eventually becomes a homeless lady living on the streets of Wellington.

The cousin who balks against living in the homeland and being one half of an arranged marriage to cement tribal ties but more importantly land ownership, flees to Wellington and becomes a lawyer.

The remaining cousin fills her place in taking on the arranged marriage.

She ends up being the winner.

The lawyer will only come back to the heartland if she can find the stolen cousin.

The lawyer develops terminal cancer and coincidentally finds her long lost cousin who has just stepped out in front of a Wellington bus causing it to screech to a halt.

They return to their turangawaewae together  - one dead.

I was very moved. I shed a few tears. 

But I am not sure if my tears were for the death of the lawyer cousin, the trauma of the dislocated cousin or because I felt like the movie was holding me responsible.

Oranga Tamariki wards don't fare so badly afterall

Children are stolen; children are abused in state care; Oranga Tamariki is a racist institution, and so on.

They aren't my claims but they abound from various sources. You'll be familiar with them.

Yet when children and young people in state care are surveyed about how they are feeling currently their responses are fairly positive. Probably - dare I say it - on a par with most young people their age.

You can enlarge the graph here. P30. Research released today.

The first statement: 'Have people in my life who love me no matter what'

77% say 'Yes definitely' 20%, say 'Yes I think so'.

The lowest agreeable score was, 'Know my ancestry (whakapapa)' where just 25% said 'Yes definitely ' and 28% said 'Yes I think so'.

For me the first aspect of a young person's life is more important. The importance of feeling unconditionally loved is hard to overstate.

Not all young people in the care of the state have participated so that's a shortcoming. 84% participation rate is nevertheless good.

The survey results seem strangely out of sync with the failure of  OT opponents put about.

"You have nothing to fear"

 Here's Stuart Nash, MP for Napier:

Nash acknowledged that Hawke's Bay had a gang problem, but said arresting people was not the solution to the problem.

In terms of public safety, Nash said any form of gang violence “tends to be perpetrated against other gangs”.

“In terms of feeling unsafe, unless you’re a gang member, you have no reason to feel unsafe. The public are not everyday target. I understand gangs can be intimidating, but unless you’re a rival member or tied up in the drug trade, you have nothing to fear.”

Tell that to the toddler shot dead by a gang in Wanganui; tell that to a young nurse who was relieved of $2,000 he'd just withdrawn from an ATM by gang members and offered no assistance by the police; tell that to rape victims who serve as unwitting initiation objects.

What a terrible stance for an MP to take.

Cindy Kiro

Cindy Kiro's appointment to the role of Governor General is political. Judging by comments on Kiwiblog people have forgotten her time as Children's Commissioner. She advocated that every child should be interviewed or assessed before age two and again at ages five, 13, and 17 - a heavy-handed unnecessary state intervention to avoid stigmatising particular groups. 

She helped Sue Bradford push through the anti-smacking legislation saying, "...we know more about parenting and child health and development now than we did in our parents’, grandparents’ and great grandparents’ times."

Warding off an interviewer asking about Maori child abuse she said, "I think people need to get a little careful when they start this business," and propagated false child death statistics in defence. She never owned or corrected them after their inaccuracy was identified. 

She overspent her Ministry's budget and was criticised for spending too much time overseas and staff turnover. 

Kiro is not a smart appointment.

Labour happy for babies to be born onto benefits

When Paula Bennett was Minister for Social Development she wanted to stop people adding children to an existing benefit to avoid work. So the subsequent child rule was created. If a beneficiary adds a child to a benefit, when that child turns one, the parent will still have the same work-obligations based on age of the previous child - part-time between ages 3 and 14; full-time thereafter - hardly onerous.

Now Sepuloni wants the rule removed. This is an extract from support material that accompanies the bill to achieve this:

I take issue with the adjective "small" to describe the number of people who have added a child to a benefit and are currently affected by Bennett's rule. Almost 9,000 in total.

2,533 have added a child to their benefit when the next oldest was 14 or older (which is why they are currently on the Jobseeker benefit).

Let's call it careless procreation at best. It is not good for the babies to be born onto benefits. To say otherwise defies commonsense.

But note that the government analyst who wrote the support material says "lighter" work obligations are beneficial and:

Apparently lighter work obligations will allow mothers to take up education for "long-term careers".

These are females who don't know how to stop having kids when they are already in a bad situation!

A shining example of the naive and foolish ideology of the left.

Another one bites the dust

The only op-ed writer left worth reading at Stuff, Martin van Beynen signed off today:

As an opinion writer, it's easier to identify what you oppose rather than what you support. I don't like being told I'm to blame. I don't like zealots and young know-nothings telling me what to do. I don't like wokeness or virtue signalling or cancelling people for some trivial perceived infringement of current sensibilities. I don't like being told I'm privileged or that I had it too good because of being pale and male. I don't like tailoring my views to suit a new zeitgeist. I don't like the implication that everything done to improve people’s lives prior to the latest orthodoxy has been a disastrous failure and that some new system will bring in a utopia.

So there's another voice looking for a new home.

They are piling up.

Chris Trotter foolishly invokes Micky Savage

I think Chris Trotter was in his cups writing about the Budget yesterday, including this line: "To hear Robertson invoke the memory of Ruth Richardson’s “Mother of All Budgets” ... delivered 30 years ago as the final crushing blow against Mickey Savage’s welfare state..."

Is that a joke? The welfare state Savage designed was stringently policed. There was no benefit for any individual who caused their own incapacity to work. Criminals and drunks had no eligibility. Single women who became mothers had no eligibility. Even deserted married women struggled to access assistance. 

By 1991 Savage's welfare state had metamorphosised into a massive mess with sixteen percent of the working age population on a benefit. Until 1970 there was never more than two percent. Savage would have approved of Richardson's reforms (numerically exaggerated in the re-telling) intended to undo the intergenerational dependence and dysfunction that had developed.

Now the country is running headlong into free-for-all, no-questions-asked reliance on the state. As Trotter points out, Clark and Cullen resisted this. And they were right to do so. They consistently maintained work was the best way out of poverty (which includes child poverty).

The kind of values needed to raise children with their wellbeing absolutely utmost cannot be learned from a government. They cannot be replaced by unearned income.

Savage understood human hardship but he also understood human motivation.

MSD priorities

Recently we learned that MSD was moving its fraud investigators away from beneficiaries and onto businesses.

"...between 40 and 50 MSD staff who usually worked on benefit fraud would be working on subsidy investigations for another 12 to 18 months."

In other words, leave the non-productive alone and go after the productive - those keeping the economy afloat by working and paying taxes.

This seems par for the course now.

I note today in the Budget detail this advice from MSD:

Right now, people getting Jobseeker Support – Health and Disability don’t need to renew their medical certificates. This will continue to be deferred until the new process starts.

This applies to over 78,000 individuals.

The "new process" begins next year and entails a new medical certificate process for Jobseeker clients with a health condition, injury or a disability that affects their ability to work. It’ll be more flexible and based on their health practitioner’s advice.

It's almost certain that for some this will be a fairer process based on their genuine incapacity. But there's an equal argument that these rules need to be stringent to deter malingerers. (Most doctors will welcome the easing. They do not want to play the role of benefit gatekeepers.)

Let's quickly recap on other rules that have been eased since 2017.

Single mothers no longer have to name the father/s of their child/ren. The father pays no child support.

Single mothers who continue to add children to their benefit are no longer subject to a subsequent child policy which kept their original work obligations intact.

Annual jobseeker reapplications and stand-downs are still deferred.

And despite what Mike Hosking said on NewstalkZB this morning about sanctions increasing under Labour, he was only referring to sanctions for having an outstanding arrest warrant. I expect the Covid disruptions to courts has provoked that.

Overall sanctions are decreasing. The following are quarterly:

Timeless evidence the Budget ignores

 "... there is an unavoidable trade-off between providing generous assistance to the poor and improving incentives for people to work and provide for themselves. On average across OECD countries, there is a fairly strong correlation between the effectiveness of tax and benefit systems in reducing poverty and the level of family joblessness. The correlation coefficient is 0.63 – implying that every 1 percentage point increase in the level of poverty reduction achieved by the welfare state is associated with an increase in the number of jobless families by 0.63 percentage points. Among the English-speaking countries, the correlation is even stronger (about 0.92), so that Australia and the United Kingdom reduce child poverty very significantly and have very high levels of joblessness among families; while Canada and the United States reduce poverty much less, but have much lower levels of joblessness (although they have much higher poverty among working families with children). That is, in the English-speaking countries the argument made by Adam, Brewer and Shepherd (2006) appears to apply – more generous support to poor families is associated with higher levels of family joblessness."

Source

As I have said repeatedly that  Jacinda Ardern's fixation with reducing child poverty will be realised only at the cost of more children growing up in benefit-dependent families. 

"...findings show that poor children reliant on government transfers, when compared with poor children reliant on market incomes, have lower living standards and a number of compounding shortfalls that can be expected to place them at greater risk of negative outcomes."

Source

No coherence in Labour's thinking or approach

 According to Bryce Edwards on RNZ: 

"...pressure to deliver to those most in need is now just too great for the government to ignore, and rumours are building that a benefit increase will be announced."

A benefit increase would be consistent with Labour's general approach to welfare.

But how does it tie in with the new immigration policy?

"...the country must move away from its reliance on a low-skilled migrant labour force."

The PM stressed on RNZ this morning, " Those on temporary work visas make up 5 percent of the labour force - the highest share in the OECD" with a definite implication that 'highest' was a bad thing.

But if benefits are made more attractive (along with already increasing ease of access) then New Zealanders are not going to fill the roles that migrants willingly do.

Here's an example:

Jade is on sole parent support, but she does not want to be on a benefit.

She wants to study, but she has decided to wait another couple of years, so she can spend more time with her nine-year-old daughter.

I initially received this as audio and thought I must have misheard, and she said 9 month-old daughter.

I was wrong. 

A benefit is not provided so a parent can spend more time with their 9 year-old who is presumeably at school for most of the day. Jade could support herself - or very nearly - doing any number of jobs that low-skilled migrants do.

Sorry but I have a problem with people with this sort of attitude.

And I am very grateful and inspired by people who come to New Zealand and uncomplainingly fill crucial roles. We need more of their work ethic and self-reliance here.

 

Why stats matter

You want to know what the average household income by ethnicity is. Seems straight forward. You take a survey of about 20,000 households, ask about how much income they receive (from various sources), assign an ethnicity and average it out for all households that fall into each ethnicity. Here is the result:

From the raw data:

European   50,562

Māori 40,760

Pacific peoples 38,204

Asian 44,198

MELAA 43,385

Other ethnic group 43,155

Total 47,775

Um. Don't these averages seem a little on the low side given so many households have two (or more) workers?

They are. That's because of the process called 'equivalisation'. The 'gross' incomes are equivalised according to the number of household occupants. The greater the number of people reliant on the income, the lower the equivalised income will be.

What would be more revealing is the unadjusted or 'gross' household incomes. Unfortunately these do not appear in the published tables. But I can tell you that the average total gross income is $107,196 which is a darn sight higher than the average $47,775 after equivalisation.

Remember the poverty stats are derived from equivalised income - not gross.

So a family with four children may be reported as poorer than the family with two children living next door even though their gross income is higher.

You may say, so what? 

Why they matter is because these stats drive taxation/redistribution policies. They influence how much is taken from Paul to give to Peter. Doesn't matter how hard Paul worked, what sacrifices he made, how careful he was not to have more children than he could personally afford to raise. If he is defined as 'rich' and Peter is 'poor' you know the outcome.

It's interesting that StatsNZ motto is now:

About Aotearoa, for Aotearoa

Data that improves lives today and for generations to come

Depends on whose lives really.

Men are lazy, delusional and selfish

 Men are not pulling their weight around the house. Apparently if they did the economy would be $1.5 billion better off.  Deloitte's who are making the claim says “You have to put a number on it to get people’s attention.” Surprisingly frank about how manipulative axe-grinders are.

Ex National MP Marilyn Waring wades in, “Men underestimate how much unpaid work their partners do, which means all the rest of their answers are highly questionable because they are working from a fiction, not facts.” 

Not just lazy then but delusional to boot.

"Men were also fiercely defensive of their leisure time". Selfish too.

That's backed up by men picking the best jobs. "Men also tended to favour work that involved fun things like power tools."

Of course all of this male failing can be corrected if the government steps in and makes some "good policy decisions."

Except... just a minute... along comes a bright young woman who doesn't think men are lazy, delusional and selfish. 

“It’s quite fluid for my generation. There’s no expectation to conform, which I quite like,” she said.

Stick that in your pipe Marilyn.

Asian parents give lie to the NZ narrative

The non-challenged New Zealand narrative is that housing costs are a major driver of child poverty. 

Rents are unaffordable, houses are damp and mouldy, and children go hungry and ill as a consequence.

Consider these newly released graphs from the Department of the Prime Minister and Cabinet (DPMC):

Asian children live in homes with the highest ratio of housing- to- income costs.

Asian children have the lowest experience of damp, mouldy homes.

Asian children are the least likely to go hungry.

Looks a lot to me like Asians prioritise renting or buying at the limit of their capability; that they seek better properties and better neighbourhoods and take responsibility for any damp or mould; and that even on tight budgets they know how to feed their kids.

Asian parents give lie to the New Zealand narrative.

Defining ethnicity for the purposes of measuring child poverty

The Child Poverty Related Indicators report on housing, food security, school attendance and potentionally avoidable hospital admissions. The problem - or absurdity - is that each indicator uses a different method of defining child ethnicity.

• Housing affordability and housing quality indicators: ethnic groups are reported using the total response method. People were able to identify with more than one ethnic group; therefore, figures will not sum to the total population. People who responded ‘New Zealander’ were classified as ‘other ethnic group’.

• Food security: respondents can identify with multiple ethnicities, including specifying an ethnic group not listed.

• School attendance: students were able to identify with up to three ethnicities. Students are counted under each ethnic group they identify with and once in "Total".

• Potentially avoidable admissions: The ethnicity reported is based on prioritised ethnicity for a patient within the hospital inpatient system. This prioritises people to Māori, then Pacific, and then Other ethnicities. A person identified as having more than one ethnicity will be prioritised accordingly and will only be counted once under each ethnicity category for each PAH event.

Take the first, housing. If a child falls in the housing hardship group, and has two or more ethnicities, he is counted twice or more. So there is a bias towards overstating a housing hardship problem for children of mixed ethnicity. 

Conversely, with hospitalisations, even though each child is counted just once, because Maori ethnicity is prioritised, there is a bias towards overstating the Maori aspect of hospitalisation. 

Just two more reasons why the Child Poverty Related Indicators need to be taken with a grain of salt.

Massaging child poverty indicators

 

This is a graph with which I am familiar. If anything there is an upward trend in 'all cause' child hospitalisations.

So I was somewhat surprised yesterday to hear the good news from the PM's department Child Poverty Related Indicators Report that 'potentially avoidable hospitalisations' (PAH) are trending down.

"Over the five years to 2019/20, rates of potentially avoidable hospitalisations have been decreasing."

Odd.

So I went looking for the detail that might explain the seeming contradiction (beyond the fact that from March 2020 Covid meant people didn't go to hospital.) Here's the blurb on PAH:

 Potentially avoidable hospitalisations

The Ministry of Health does not routinely collect data on potentially avoidable hospitalisations. In order to present data for this indicator, the Ministry of Health used the National Minimum Dataset (Hospital Inpatient Events) and developed a specific methodology based on analysis from academic literature and discussions with experts. The methodology report has been published by the Ministry of Health (Ministry of Health. Indicator of potentially avoidable hospitalisations for the Child and Youth Wellbeing Strategy: A brief report on methodology. Wellington: Ministry of Health. 2020).

A "specific methodology" designed solely for the purposes of creating a new indicator which...

... is required to help the government: 

-better understand the social determinants of child and youth health

-monitor the collective efforts of the health sector and other sectors on improving the health status of this population subgroup.

Forgive my cynicism but could one include in that list 'to help the government look good?'

What we have is actual hospitalisations rising while 'potentially avoidable hospitalisations' are falling.

Doesn't that mean 'potentially unavoidable hospitalisations' are increasing?

Is that good news? Here's the headline:

'More Children Being Unavoidably Hospitalised'

Talk about spin.