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.

More

Blind to the forest for the trees

Details are boring and irrelevant when it comes to the government-run systems of benefits and tax. But those details keep thousands of people in employment. And they provide a focus for divisive politics. The two main parties are perpetually entangled in debate over details and rarely seem to take a breather step back and examine the underlying idea. Then the incongruous situations arise where one says my detail is better than your detail. But both are wrong.

This is highlighted in yesterday's blog about the unpaid parliamentary intern-ship organised by Carmel Sepuloni. Yes, it is a good thing for the young lady in question to be getting some work experience (in something other than how to run other people's lives would have been preferable), even if it was unpaid. But it clashed with the benefit rules (at least until the MP intervened). And the rules- aren't- really- rules perception of WINZ is at the heart of welfare misuse. By necessity, where government presides over people's lives, so do rules.

Today throws up another silly details scenario.

Child Poverty Action Group says the definition of ‘family scheme income’, which came into force on 1st April goes too far.

Spokesperson Susan St John says it is fair that income from trusts and ‘portfolio investment entities’ (PIEs) is now counted when calculating Working for Families, Student Allowances and the Community Services Card entitlements. “But the new definition includes regular gifts of money from other family members, for example, if an outside family member pays for something like the electricity bill.”

While gift duty is abolished for the rich, regular transfers which total over $5,000 to struggling low income families are penalised. Transfers totalling $5,001 means $1,000 loss of Working for Families tax credits.

These low income ‘working families’ are not the ones hiding money in PIEs and trusts. The government ought to be encouraging grandparents who can afford it to help their children. In the recession, without such help many more working families will resort to loan sharks and foodbanks.

CPAG also queries how such as scheme could possibly be administered fairly. “And there are other anomalies,” says St John . “For example, payments for daycare made by a working grandparent is captured by ‘family scheme income’. But if the grandparent looks after the grandchild themselves it is not counted. The overall value of the help is the same but the impact on the way IRD treat it is very different”

St John says “Under the changes one-off cash gifts are exempt, raising the prospect that families will be planning their transfers much more carefully in the future”

Unusually I agree with Susan St John's opinion that transfers of money between family members eg a grandparent paying for a grandchild's childcare costs, should not be means-tested for the purposes of WFF. But if WFF didn't exist neither would interminable wrangles over how it should be administered. The government shouldn't be interfering in people's private financial affairs full stop.

Every day the news is full of where lines are drawn, because the principle has long been ceded. Scrapping over screeds of ridiculous rules and regulations. Vast resources of wasted mental and physical energy; money and time.

Then if you have any energy left to point out the undesirability of the whole kit and kaboodle you are labelled an extremist. I give up.

Naive and arrogant Labour MP

A blunder by someone who should know better.

Labour MP Carmel Sepuloni expects someone volunteering in her office - because she has no money to employ them - should also receive an unemployment benefit. Then she chastises WINZ for enforcing rules regarding the compulsory attendance of unemployment beneficiaries at a seminar, which her 'intern' missed.

I have copied her post and the ensuing comments in case it disappears;

Get it together WINZ
Posted by Carmel Sepuloni on April 11th, 2011

So about three weeks ago a young Samoan women came in to my office asking ever so nicely if we could give her some work experience.

She recently completed a National Certificate in Business Administration but hasn’t been able to get work because she has no work experience.

I told her that I didn’t have any money in the budget to hire someone else but she pleaded with me to let her volunteer her time. I agreed to put her on a Parliamentary Internship to provide her with the work experience she needs as well as to support her in what ever way I can to assist her with getting in to paid employment.

Then what happened….

A week in to her starting I get a call from a WINZ case manager asking if I would agree to her being on a subsidised work scheme i.e. WINZ subsidise her being in paid employment for me. I told them - nope, I have no money and therefore can not pay her and I’m not even sure if parliamentary regulations would allow for me to do that anyway.

I explain to the WINZ guy that I will assist her as best I can with getting the work experience she needs as well as support her in trying to find work. I explain to him that I’ve even set it up, as a legit Parliamentary Internship. He tells me that he understands and that this sounds like a great opportunity for the young woman and that if she’s still actively seeking paid work, then that would be fine.

A week later (beginning of last week). I find out from this poor young woman that WINZ have cut her benefit. Despite the fact that the last case manager I’d spoken to, had said it was fine – another WINZ case manager had wrongly assumed that the young woman had deliberately (and without good reason) missed a WINZ seminar that she was suppose to attend as an Unemployment Benefit recipient.

I rang WINZ that day when I find out and leave a message (outlining the situation) on the phone of the case manager that had made this decision (a different case manager from the one I spoke to the previous week). I don’t get a response from her, but the very next day the young woman undertaking an internship in my office, gets her benefit reinstated.

Get it together WINZ! Not all of these poor young people are going to have an MP on their case, who can ring up and leave rather firm voice messages for you when these mistakes happen. The vast majority of our young people are wanting to be engaged with work or study but at this point in time, things are against them and they need additional support. Don’t treat them like criminals out to commit benefit fraud and/ or bludge of the system.
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6 Responses to “Get it together WINZ”

1.
jennifer says:
April 11, 2011 at 1:37 pm

Are these the new ‘front line’ services that big Paula keeps crowing about?
2.
Richard says:
April 11, 2011 at 2:49 pm

Surely unpaid internships are exploitation, or does Labour not believe in the minimum wage anymore?
3.
Frank says:
April 11, 2011 at 3:13 pm

On the information you just provided, you inappropriately excercised political influence over a public servant who appears(on the facts you have chosen to represent) to have done exactly the correct thing.

You cannot do voluntary work INSTEAD OF being available for full time employment:

http://www.workandincome.govt.nz/manuals-and-procedures/employment_and_training/programmes_and_services/voluntary_work/voluntary_work.htm

So maybe give some more details to prove that “WINZ got it wrong”? or maybe even better – ask Work and Income directly?!
4.
peteremcc says:
April 11, 2011 at 3:22 pm

How come you’re happy for this woman to work for you just for the experience and for zero pay, yet you don’t want to let me or her or anyone else work for the experience and $10/hour (which would be more than she’s getting at the moment from WINZ)?
5.
David says:
April 11, 2011 at 4:30 pm

How many other volunteers do you have in your office collecting a benefit ?
6.
Lindsay says:
April 11, 2011 at 4:49 pm

Someone on the Unemployment Benefit must be available for paid work. Your ‘volunteer’ must meet those conditions. It’s quite straight forward. It would appear Work and Income are doing their best to ensure unemployed beneficiaries are doing everything in their power to get paid work and you are attempting to thwart their processes.

Attitude

This headline from Radio NZ irks somewhat;

'Super-rich' yet to contribute to quake appeal

If I were 'super-rich', and in a position to make a substantial donation, I would be waiting for representations to be made to me about exactly how the money would be used. And reading on, it would appear that is the reason that donations haven't yet been forthcoming. But the headline plays to the knee jerk resent-the-rich sentiments of too many Kiwis.

Other people just get on with it. Like Catherine Bailey who organised a art auction fund-raiser at the local pub and called on Eastbourne artists and businesses to donate works and raffle prizes. When returning an easel and sample art to me Sunday (I offered a pastel portrait voucher which apparently went for $200) she said they had raised around $7,000. Good for her. That's what the country needs. More doers.

Susan St John - whiny, one-eyed economics

From today's NZ Herald;

Bernard Hickey's column last week elicited this response from Susan St John, associate professor of economics at the University of Auckland business school.

Bernard Hickey says dropping "middle-class welfare" such as Working for Families would be the fastest way to reduce the budget deficit.

His analysis displays no understanding of family economics at all.

Unfortunately, the antipathy to Working for Families is now widespread and he helps smooth the path for the Government to slash this programme.

But Working for Families tax credits simply adjusts tax to take account of family size and to share the costs of raising the next generation.

In Australia, one-child families, including those on benefits, receive maximum assistance of A$10,200 ($13,000) if there is a baby bonus paid, A$8815 for a child aged 1-4 and A$7738 for a child aged 5-13.

In New Zealand, if this one-child family is on a benefit the most they can get from Working for Families is $4472. A family defined as "working" qualifies for the In Work Tax Credit, but they can only get the full entitlement of $7592 if their total income is less than $36,868.

Contrast these with the Australian figures when our dollar is only worth about 75 per cent of Australian currency.

If we do away with the meagre Working for Families tax credits, how will we stop the exodus of our young struggling families to Australia?

And if we retain Working For Families which, remember, people somehow managed without before they were bribed by Labour in 2005, how do we stop the exodus of childless young to Australia and further afield?

I have two children. When we decided to have a family we didn't expect any financial help to do so. People similar to me are also leaving for Australia. They don't immigrate looking for handouts. They immigrate looking for better incomes from work and less whining from Susan St John types.

I am so sick of the hand-out mentality, the we're-raising-the-next-generation-of New Zealanders crap. How the hell do people know if they are raising the next-generation-of-New Zealanders when so many will live and contribute elsewhere. Thanks to the continuing screwing over advanced by socialists.

Restoring family responsibility

Tariana Turia had an opinion piece in the Dominion Post during the week. My response was published in today's paper;

Wealthy parents should pay more

That's the latest idea afoot in Australia. Wealthy parents, already paying school fees, are an "untapped" source of further funding apparently.

WEALTHY parents should pay a levy to upgrade the nation's rundown schools, according to the headmaster of Australia's oldest private school.

Tim Hawkes, head of The King's School at Parramatta, said the levy should apply to well-off parents who send their children to government schools, which he described as an untapped funding source.

Well-off parents already paying school fees to send their children to private schools would also have to pay the levy.

Gee. I bet that has made him popular with his customers.

Of course I fundamentally disagree with the proposal for any number of reasons. How is wealthy defined? Many wealthy parents already pay a lot more to educate their children so how is 'fairness' achieved? Why punish effort and entrepreneurship and reward the absence of it? I could go on.

But the reason I thought the article from The Age worth comment, is the response from readers. The poll (at 6 am) shows only 33 percent agree with the idea. If the same sort of thinking got an airing in the NZ Herald I believe the 'yes' vote would be significantly higher.

And the difference is why Australia is leaving us behind for dust.

Welfare - a hopeless bind

What a hopeless situation this country has gotten itself into with regard to welfare. Hopeless. It is laid out starkly by Simon Collins in today's NZ Herald. Hardship itemised alongside the inability of welfare payments to meet the cost of living of a single parent despite those payments being greater than the average weekly earnings of a female living in Auckland of $798. The mother concerned receives $827 after tax. Her main problem is she is spending over half of it on rent.

It is no wonder that NZers love to invest money in property. There are so many families, often single parent, that can only afford to rent. And the presence of WINZ in the market keeps the rental charges artificially high.

There are only two answers for this mother. Move or share rental expenses. Neither prospect is easy to face but people cut their cloth. It's part and parcel of life.

Working isn't going to lift her income and if her condition worsens she may be unable to. If I was in her shoes I would move out of Auckland. Does she have parents she could stay with temporarily?

On one hand I am sympathetic. But on the other when you compare her problems with those faced by many Christchurch residents, relatively speaking, they pale in comparison.

I have met Pam Apera. A sensible woman. But she should not be putting her hand in her pocket. Silly, silly. I know. I have done it and so have other volunteers I have worked with. It's against the rules for very good reasons. Oswald will tell us why.

The parent has to take control of the situation and make some tough decisions.

CYF advise "don't be stoic"

There has been an increase in crime, domestic violence and alcohol-related incidents in Canterbury towns hosting families who have left Christchurch after the earthquake. Overcrowding and stretched resources are being blamed. But this advice from a CYF worker stopped me in my tracks, so to speak;

It was "no time to be stoic", and people should seek CYF help before they reached "breaking point", she said.

Being stoic is actually how some people cope. Time was when exercising self-control was considered a virtue, a strength. I suppose modern sensitive types would now describe a stoic as anal-retentive.

In any case people who are committing alcohol-fuelled crime or abuse weren't being stoic anyway. I suspect that their behaviour isn't out of character. The circumstances have just ratcheted it up a notch or two; given them an excuse to be more self-indulgent than usual.

And along come CYF telling them they shouldn't have bottled it up. There, there. Let it all hang out. Wear your heart on your sleeve, cry on as many shoulders as you can find. But above all, come to us.

What the hell for? People would be better off going to the local church (although, in this day and age, the church would probably refer them on to CYF, such is the sell-out to socialism).

Some good old-fashioned stoicism, or even a resemblance of it, is exactly what is needed. No, I don't know what some of these people have been through, but there is always someone worse off than yourself and if they are parents, they have greater responsibilities than to their own emotional expediencies.

Yesterday a woman came into my shop taking a break from Christchurch. She wanted to talk about what had happened and I was very happy to listen. She wasn't hand-wringing or feeling sorry for herself. She was calm and philosophical. But she was upset about a nearby couple living on a lifestyle block, with all the latest and best possessions, who couldn't handle their material loss and had split up. She was very sad for the children. She felt the parents should have been strong for their children.

Stoic, perhaps.

Welfare and refugees

A criticism of Libertarianz immigration policy at Crusader Rabbit yesterday prompted me to have a closer look at the NZ situation. The discussion assumed that all refugees are Muslim (not true) and therefore, to be blunt, not wanted. It is a view that has some validity if refugees are eventually a source of trouble (crime, welfare dependence, and intolerance to other cultures.) However, to treat all refugees as a single class of people is collectivist, an approach I will always take issue with. I abhor collectivism because I will always advocate and fight for the rights of individuals. Detractors at Rabbit will argue that Muslims will collectively override the culture of individualism given a chance. And that is also possibility.

I argued that the Libz policy of allowing unlimited refugees as long as they have a private ongoing sponsor is reasonable. I might be persuaded to change my mind about limitations but not the idea of sponsorship. Private sponsorship would probably have a self-limiting effect anyway.

In NZ, the particular problem with refugees is they are dependent on the public purse from the outset and frequently remain that way. This does not assist integration. It means refugees remain out of the workforce with no demands on them to learn English and new skills, if they choose not to.

There is a paper entitled Does a rising tide lift all boats? which examines how the US compares to NZ in its refugee resettlement programme. It is not written by a New Zealand public policy wonk which is immediately obvious in its clarity of structure and straightforward writing.





The result?



The paper goes on to point out that the refugees characteristics on arrival appear to be fairly similar, "and certainly not disparate enough to be the basis for marked difference in the outcomes."

The passage encapsulates what is wrong with the social compact New Zealanders apparently have with their government (though I do not believe for a moment it is a compact by consensus). Is a refugee stuck on a benefit more equal? Is she more free?

And exactly the same can be said about New Zealanders.

The company Tizard keeps

I must be leading a sheltered life. I don't know any sulky 15 year-olds who smoke too much dope. So I have no idea how they behave. What have I been missing?

Maori - unrealistic standards?

As a result of someone pulling my leg over the Maori translation of Ministry of Women's Affairs I had a look at said website this morning. Surprising - or is it? - how much of it is devoted to Maori.

By sheer coincidence this month is the 100th anniversary of the first convention of the Māori branch of the Women's Christian Temperance Union (WCTU) held at Pakipaki in 1911. Maori were enticed in their droves to sign up to a pledge promising not to smoke or drink. But I never knew about the third requisite.

Temperance Pledge

He whakaae tene naku kia kaua ahau e kai tupeka, e inu ranei I tetahi mea e haurangi ai te tangata, kia kaua hoki ahau e whakaae ki te ta moko. Ma te Atua ahau e awhina.

Translation:

I agree by this pledge, not to smoke tobacco, not to drink any beverages that are intoxicating, and also not to take the ta moko. May God help me.

Ta moko has long interested me and I've painted many tattooed subjects. Countless women died of septicaemia as a result of the practice and one hundred years ago the process was painful, dangerous and barbaric. But that has been replaced with safe modern day techniques and I imagine the idea of bowing to a European/other culture request to forsake ta moko today would rightly be reviled.

But isn't there a hint of an analogy in there?

(Leaving aside tobacco) isn't the answer for leading a good life finding some middle ground or moderation or better way without total abandonment? For many Maori there seems to be only the high road or the low road. All or nothing. And I suppose the same must be said for some Pakeha. But there does seem a stronger delineation with Maori. "Churchies or crims" as I have heard one Maori friend remark about a family which ended up making the worst sort of headlines.

These concepts - good and bad - even make an appearance in public service contracts today:

Tapu/Noa Sacred/profane The recognition of the cultural means of social control envisaged in tapu and noa including its implications for practices in working with Maori Service Users.

Are Maori setting themselves unrealistic standards? And then, too often, failing spectacularly?

Blog stats March

Best month ever. Coincides with the second biggest business confidence downturn since the survey began. Reading blogs make people gloomy? Or gloom encourages people to read blogs? Actually it's probably got something to do with my google ranking, whatever that is.

Criminals and misnomers

Just two quick thoughts this morning.

1/ Anybody who defrauds Work and Income should be barred from ever claiming welfare again, including Super. That would a huge deterrent to people who think they can behave how the hell they like and always fall back on other people's money. Otherwise this extraordinary state of affairs, whereby no matter what people do their 'entitlements' remain intact, will continue to be a major reason why so much crime occurs and will continue to occur. The bullet must be bitten and a stop put to this utter nonsense. The facts;

In 2009;
Cancellations of a benefit for reason ‘going to prison’ 4,192. Grants of a benefit for reason ‘leaving prison’ 3,496.


2/ Does anyone else find the constant use of the term 'mass grave' in reference, to the inability to identify Christchurch quake victims, questionable? Mass graves have connotations associated with mass murder. Surely a better, more sympathetic description could be found. Multiple grave maybe. I don't know but I am certain the term being used is all part and parcel of the tragedy voyeurism some commentators have identified.

Update; Having returned from walking the dog there is something else I want to say. In the business of beneficiaries defrauding the taxpayer and going back on welfare the writer went to ACT for a response;

ACT MP Heather Roy said it was obvious further changes needed to be made. "The question is, how much was the system allowing this to happen? It seems to me if we've got that much money going west ... there's something going wrong."

What a piss-poor response. ACT has had years to think about this matter. And Roger Douglas is supposed to be the welfare spokesperson anyway. I may not always have agreed with Muriel Newman but she didn't prevaricate or miss an opportunity to stamp an impression on voters about where the party stood. And they call National "spineless".

Rhodesian Ridgeback

This is sketched by eye. I am usually more methodical and take short cuts with the use of technology. Sadly this girl is no longer with us. But I remember her as a particularly lollopy, peaceful beast.

Not doing his homework - Dick Smith

Dick Smith calls for two-children limit on families

EVERY Australian family should be limited to just two children to curb the population explosion, controversial millionaire Dick Smith says.

He called for a China-like quota on the number of kids, warning the growing burden on our resources was like "a plague of locusts".

Yes the Australians have been over-producing for decades - haven't they?

Attacks on WWG report continue

This column appeared in the Dominion Post and NZ Herald yesterday.
It disappoints me that everything we are seeing and hearing in the media is coming from the knockers. The Greens, left-wing activists, church groups, academics. The group members, bar one exception, appear to silent, by choice or by some agreed tactic. There is so much one could say in response to this latest column, not least that is ignores wholly the moral imperative for welfare and the role of the family in society but confined to 200 words I thought best to reiterate the big picture:

Dear Editor

Donna Wynd and Susan St John co-wrote a column (Dominion Post, March 30) criticising the final Welfare Working Group report. Almost entirely it comprised analysis of how a sole parent might be affected by "punitive" recommendations. No attention was given to what has happened and will continue to happen under the status quo.

The Group was tasked with examining long-term welfare dependence and found, "Around 60,000 had spent at least ten years on a benefit, and 100,000 had spent at least nine of the last ten years on a benefit," and, " In 1960, only 2 percent (1 in 50) of the working-age population were receiving benefits. By April 2008, after a decade of strong employment growth, around 10 percent of the working-age population (around 278,000 people) were receiving a benefit." Currently, the figure sits at 13 percent.

Clearly reforms are needed to reverse the trend. Accordingly the Group made many recommendations including part-time work-testing single parents whose youngest child is three, in line with some other OECD countries. Being on a benefit long-term is documented as detrimental to children and must be discouraged. There may be some short-term difficulties adjusting to a tightening of welfare but the long-term gain, particularly for children, outweighs this.

Why stop at the hut?

Looking at the photo of these two boys I ask myself, why stop at the tree hut? The Nelson City Council tore it down because if someone fell from it they might injure themselves. But the two boys are still in the tree well above ground. Why not chop down the entire tree? And any other council tree they might choose to climb and fall from. That is the logical extension of their initial action.

This reminds me about the notice that appeared on a tree in our street. Two boys had attached a basketball hoop to it before a nasty notice appeared warning them to remove the hoop or face a fine. The tree is 'protected'. Just like the Nelson boys are being 'protected'.

Protected. What an abused word. Try stifled, constrained, prevented, forbidden. My guess is around 90 percent of people do not agree with council's 'protective' actions. But there is also a lurking 10 percent of control freaks winning the day. How do we fight them? Usually they operate under the cloak of anonymity. Who are these people and what drives them? Do they see themselves as superior beings with greater foresight and therefore a duty to act? Do they regard themselves as selfless and altruistic in their concern for their fellow human-beings every safety? Or are they grumpy, miserable old farts and fartesses who can't abide the laughter and chatter of excited children?

What we desperately need more than anything else is protection from them - not ourselves.

Fore...tee...

...thousand. That's what the lady captain of a Cheshire golf club had claimed in disability living allowances. Perhaps she thought 'disability' included not having enough money to suit her lifestyle.

Valerie Lewis received more than £40,000 in Disability Living Allowance, claiming she suffered back pain that meant she could barely walk.

But the mother-of-two played four nine or 18-hole rounds of golf a week and was lady captain of her local club.

The 55-year-old first claimed the disability benefit in 2001, insisting she had difficulty walking more than 7ft, getting dressed and even cutting up food or tying her shoelaces.

Fraud investigators filmed her teeing off at Sutton Hall Golf Club near Runcorn, Cheshire, loading her golf buggy, lifting clubs in and out of her car and walking ‘five or six miles’.

She was filmed at the 6,000-yard course in November 2008 after investigators received a tip-off that she was ‘fitter than stated’.

Lewis was further implicated by her own diary, which revealed she had played in a golf competition on the day of her very first disability assessment and rode a horse the day after.

In January she escaped jail after admitting failing to inform the Department for Work and Pensions about changes to her circumstances.

At Warrington Crown Court, Lewis, from Runcorn, was given a sentence of 24 weeks in prison, suspended for two years, and 200 hours of community service.

(Hat-tip The Welfare State We're In)

At the risk of stating the obvious, the problem is dishonesty. The more people who are dishonest, the more it becomes normalised and the more people accept it as normal. A values survey conducted over many decades showed that increasingly people thought it was OK to apply for benefits they were not legally entitled to.

MSD research includes this insight into inter-generational welfare dependence:

"First, poor children are more likely to grow up to be poor, so the correlation could just result from shared economic circumstances. It could also arise if parents who get welfare have less distaste for welfare (and perhaps more distaste for work) and transmit these attitudes to their children. Finally, it could arise if parents who get welfare transmit information about getting welfare to their children in a way that lowers the transaction costs of the children's participation in welfare programmes. Gottschalk (1992), using NLSY data, finds that among individuals eligible for welfare, adults who grew up in families that received welfare were more likely to receive it themselves than adults who grew up in families that did not receive welfare. This suggests that at least some of the intergenerational transmission of welfare use results either from parents and their children sharing norms and values about welfare receipt, or from parents and children sharing information about welfare receipt."

So the transmission of degraded values happens within families and across broader communities.

The question is, of course, how to arrest and reverse the decline. People cannot suddenly be made more honest, but the opportunity to exploit can be minimised, and the rewards for integrity increased, even if only in a relative sense.

Thanks Darren

I would like to thank Darren Hughes. For adding to the public perception that most politicians are a pathetic lot. Most do not have the talent to reach similar levels of public recognition and attention in any other sphere. The ones who are attracted to politics very young are particularly suspect. Their convictions almost exclusively rest on the acceptance that government is good and government is power. In that order. And they want a piece of the action. They fancy themselves as leaders because they have more apparent confidence and certainty than their compatriots. They think that they are more capable and compassionate, when, in fact, they simply have an utter lack of compunction about using other people's money to take the easy way out of any given situation. In their minds, life is black and white. Because government is good and powerful, as agents they can do no wrong. And the recompense for being agents just happens to be well above anything they might earn elsewhere given their paucity of skills and talent. They increasingly believe in their goodness and infallibility. Which can be contagious, especially for impressionable wannabes made in their mirror image. But there is a vast difference between admiration of a mind and attraction to a body. If they do co-exist, great. But to assume as much is very, very dicey.

So that's a mistake most mere mortals make at some point. But our politician isn't a mere mortal. Not in his mind. Not until it is convenient to re-assume such a humble position anyway. Hughes is a victim of his own self-regarded success. Yes, lots of people say what a popular guy, what a great wit, what a great debater, what a future. But notice that they all share the government is good and powerful world view.

We yearners-after-small-government sometimes use the quote, a government big enough to give you everything you want is also big enough to take it all away. In an ironic way Hughes has just had a nasty taste of that.

Paying the earthquake bill - every bit helps

It has been suggested that California legalise dope and tax it, to go some way towards fixing their financial woes. While NZ scratches around looking for ways to pay the Christchurch earthquake bill here's a company donating $5 from each sale. What does it produce? Cannabis look-alikes - or as they describe their products - "legal weed".

I wonder if the Mob or Black Power have made similar pledges?

Unfortunately I expect NZ will probably do the retrograde thing and close these legal businesses down rather than accept human nature for what it is and make some gain for the good. Similar products are already illegal in Germany and Australia apparently. Oh and look who is leading the charge.

The inherent stupidity of paying young people to become parents

Money is a powerful motivator. But the degree to which it motivates varies strongly across individuals. My own self-assessment is low on the scale. My ideal is to be free from financial anxiety and unmanageable debt but I don't yearn after overseas travel, flash clothes, etc. When I was a teenager I was more motivated by money than I am now because I didn't have any! And I wanted stuff. So I worked at various jobs while still at school.

Where is all this leading? You know that claim that young women don't get pregnant to get on the DPB; "There is no evidence" welfare supporters say. The anecdotal, like being told personally by a teenage parent co-ordinator that money is a major factor, is not admissible.

I accept that young women want to become mothers. The prospect of a tiny little soft, loving, dependent being that is all theirs is not an unattractive idea. But would it be so if there was no money attached?

Imagine a moment. A 16 year-old girl disinterested in school bar the social aspects; unhappy at home where she is nagged about not achieving and being lazy; or worse, where she is fighting off a frequently drunk 'uncle'; with a group of slightly older mates who are flatting together and 'earning' their own money from student allowances; but with no interest in continuing to study; with a boyfriend she is crazy about but at the same time insecure about. Tell me that having up to $500 a week appear in her bank account wouldn't be appealing.

And she can get that even before the baby is born so it's not like she has to wait a full nine months. She can sign up for the sickness benefit, claim an accommodation supplement and Bobs your uncle (and hopefully escaped from).

But what do we know about young people? Their brains aren't formed we are told. That's what the anti-drinking brigade hammers on about. The driving age should be raised because they lack decision-making capacity and judgement skills. That's what the raise-the-driving-age brigade tells us. Too many young teens, particularly Maori smoke. That's what the anti-smoking brigade tell us.

The teen years are extremely risky years. They still really need a great deal of guidance and advice from mum and dad, the wider family, from teachers and, in some cases, their peers.

Yet as a society we persevere with this idea of incentivising them to become parents.

Babies are incredibly demanding. My first was premature and colicky. My marriage was at its rockiest during his first year. There are times when you have to dig deep for reserves of energy and patience in a way you never have before. Most young teenagers aren't up to it. Any neither should we expect them to be. It's still their time to focus on their life.

Today we read that Family Start funding is going to be cut to some agencies. They aren't tackling child abuse and neglect successfully enough apparently. Home visitation to parents at risk of harming or abusing their children through indifference has not proved to be the shining solution after all. Not across the board anyway. Is anybody surprised?

Well-intentioned home visitors can, in any event, only get into the homes of the willing. My example has just gotten away from annoying, demanding, adults. The last thing she wants is her inability to cope criticised in the same way as her inability to focus at school. And, anyway, tomorrow she will start coping. There's always plenty of time when you are 16. Plenty of time to change. Trouble is, the baby doesn't have the same luxury.

We've changed to TV3

Well, husband has. I don't fully engage with the telly in the mornings but Three's new News show, from what I see and hear, is a vast improvement on the simpering, magaziny, faux funny junk on One. TV One may have held their audience after the departure of Paul Henry, who was genuinely funny while still capable of delivering a serious, probing interview, but there was no alternative for morning viewers. Looks like One's Breakfast ratings will take a hit now.

Methodist Mission attack on the WWG misguided

Interview with Larry Williams, NewstalkZB (starts at 20:00)

Media Release

METHODIST ATTACK ON WWG MISGUIDED

Monday, March 21, 2011

The Christchurch Methodist Mission has published a misguided and unwarranted attack on the work of the government-established Welfare Working Group. Welfare commentator Lindsay Mitchell said today that the four page pamphlet Facts about welfare in New Zealand is highly selective, contains inaccuracies and misleads.

"The Mission accuses the Welfare Working Group of 'misuse of data' and having 'manufactured a crisis that doesn't exist' and urges its members to write to newspapers and MPs to ' challenge ill-informed criticisms of beneficiaries and welfare support'. "

"It selectively uses data relating to the unemployment benefit and DPB to claim that 'most people receive social support for limited periods to make it through particular challenges or crises'. But the data used contrasts strongly with more in-depth analysis supplied to the WWG by the Ministry of Social Development."

"The Welfare Working Group found that, '... in 2008, just prior to the recent recession, and after a decade of economic growth, roughly ten percent of the working age population, or around 286,000 people were receiving a benefit...one in five children were living in benefit dependent families...170,000 had been on a benefit for at least 5 out of the last ten years...in 1960 only 2 percent of the working-age population were receiving benefits' ."

And according to Mitchell, "Other MSD research shows that over half of DPB recipients had spent 8 of the last 10 years dependent on welfare."

"Yet the Methodist Mission insists that ' the Welfare Working Group has painted a picture of long term welfare dependence that is just not reality'. "

The Welfare Working Group had at its disposal the best advice and data available from MSD, Treasury, the OECD and many other international experts in their field.

Denying there is a dependence problem denies an attempt to address it. That will not help the thousands of children and adults whose lives welfare reform seeks to improve.

Ends

Detailed rebuttal;

The Facts About Welfare In New Zealand by the Christchurch Methodist Mission – a response

The Christchurch Methodist Mission has produced a tract that purports to be The Facts About Welfare In New Zealand. It was triggered by the work of the Welfare Working Group, established by government to examine long-term welfare dependence and how to reduce it.

The Methodist Mission’s claims follow in italicised type:

ONE

The total number of people receiving benefits has dropped over the past decade

> the number of unemployed has declined significantly.
> the number of sole parents needing support has also declined.

Facts:
Total number receiving benefits in December 2000 was 392,307 (MSD Benefit Factsheets)
Total number receiving benefits in December 2010 was 352,707
Total number receiving the Unemployment Benefit in December 2000 was 146,692
Total number receiving the Unemployment Benefit in December 2010 was 67,084
Total number receiving the Domestic Purposes Benefit in December 2000 was 109,663
Total number receiving the Domestic Purposes Benefit in December 2010 was 112,865

Their third claim is incorrect

Notably, the Mission fails to mention throughout the publication the ever-increasing numbers of people reliant on a sickness or invalid benefit and the degree of that reliance.

TWO

Most people receive social support for limited periods to make it through particular challenges or crises.
> Less than 1% (0.2 percent) of those currently needing the unemployment benefit have received it continuously for 10 years or more.
> Clients who have received a Domestic Purposes Benefit continuously for 10 years or more made up only 0.4 % of the total working-age population

Both of these statements are factual and are taken directly from MSD benefit Factsheets. However, the second hides more than it reveals. Contrast their facts to Ministry of Social Development data:

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.

Contrast their facts also with findings reported in the Welfare Working Group Issues paper;

“In 2008, just prior to the recent recession, and after a decade of economic growth, roughly 10 percent of the working age population, or around 286,000 people, were receiving a benefit. At that time, about one in five of New Zealand’s children were living in benefit dependent families.
At the same time, roughly 170,000 people had been on a benefit for at least 5 out of the last 10 years. That is the equivalent of the cities of Dunedin and Invercargill combined. “

And:

In 1960, only 2 percent (1 in 50) of the working-age population were receiving benefits. By April 2008, after a decade of strong employment growth, around 10 percent of the working-age population (around 278,000 people) were receiving a benefit.

Note that the Christchurch Methodist Mission goes on later to say:

The Welfare Working Group has manufactured a crisis that doesn’t exist and painted a picture of ‘long term welfare dependency’ that is just not reality.

THREE

Benefit spending is predicted to decline substantially as a share of GDP, for the next 40 years.

This is in direct contrast to estimations made by the Welfare Working Group based on current trends:

“In looking to the future, many of the historical social and economic drivers of increasing rates of benefit will continue. While there is considerable uncertainty about the future, there is a clear possibility that the current recession, labour market changes, globalisation, and continued family changes will lead to a growing proportion of the working age population receiving benefits. This is particularly important in the context of population ageing and a shrinking proportion of the population in work. In the Working Group’s Issues Paper we highlighted that if the long-term upward trend in Sickness and Invalid’s beneficiaries continued, as it has done in many countries with higher levels of benefit receipt than New Zealand, then benefit numbers could rise to 16 per cent of the working age population by 2050. “

In any case long-term Treasury predictions, if that is what the claim is based on, are invariably inaccurate.

FOUR

Benefit fraud is minuscule – fraud as a proportion of the total benefits paid was only 0.1% last year.

This figure is based on prosecutions. Actual incidence is unknown. However, the Welfare Working Group was more concerned with benefit misuse. In principles that should guide future policy they include:

1.1.1. Principle 4: Be efficient and free from misuse

Focussing on fraud is somewhat a red herring

FIVE

Numbers of people on benefits is dependent on the availability of suitable jobs – it is as simple as that.

The number of people on benefits is dependent on far more than just this one factor. It is affected by fertility and marriage rates, educational attainment, hospital waiting lists, availability of medical treatment, counselling and addiction treatment services, societal attitudes to benefits, and more. If the last claim was true, when New Zealand enjoyed the lowest unemployment rate in the OECD (2007) there should have been very few people dependent on a benefit. That was not the case. It is a naive claim at best.

SIX

Average benefit payments as a proportion of the average wage have fallen more or less steadily since the 1970s. In the late 1970s, it reached around 44%, by 2009 it was well under 30% of the average wage. (my emphasis)

The current basic DPB rate is $278.04 per week

Average benefit payments usually refer to the basic rate and do not include add-ons like the accommodation supplement.

According to MSD a typical weekly all-inclusive DPB payment for a parent with two children living in Auckland is $580.

According to Statistics NZ the average ordinary time female weekly wage for the fourth 2010 quarter was $686.55 (before tax).

$580 per week is above female wages for some industry sectors such as accommodation and food services, retail, arts and recreation services.

SEVEN

There is no evidence that anyone has babies to get more welfare – and there is no relationship between the provision of welfare and the number of children welfare recipients have.

At the end of June 2006 27,210 recipients of the DPB had added extra children to their existing benefit. 8,708 had added more than one additional child.
In 2006 New Zealand Medical Association deputy chairman, Don Simmers, told a conference that too many women were contemplating pregnancy on a benefit.

EIGHT

Very low benefit levels make it harder to get off a benefit. And for those who have to stay on a benefit, a much lower chance of belonging and contributing to society.

Rather, it is generous benefit levels that make it harder to get off a benefit.
Social reporter for the NZ Herald, Simon Collins, highlighted this phenomenon last year when interviewing mothers on the DPB in South Auckland:

“Connie Raiwhara, who runs the Pikorua community house where Ms Heremaia attends a sewing class, said many sole parents had no qualifications and would not give up the benefit for a minimum-wage job.
A sole parent with three young children paying the $332 average rent for a three-bedroom house in Papakura would get $206 in family support and $165 in accommodation supplement on top of the $278 DPB, a total of $649 a week.
"A lot of our solo parents get well in the $700s. They are not going to go from $700 to $400," Ms Raiwhara said.”

NINE

Recommends…Adequate income support, including income support at a level which enables people to meet their basic needs and to participate fully in community life.

OECD research has shown that raising benefit levels results in more workless households. European and US research shows that raising single parent benefits results in more unmarried births.

TEN

Recommends… Restoring Training Incentive Allowance (TIA) at degree level

The Treasury Report to the WWG found that the TIA may actually have resulted in people staying on benefit longer.

ELEVEN

Recommends…Removal of financial sanctions - The benefit system is already paid below the poverty line; cutting family incomes further by sanctioning their benefits is not in the best interests of children.

Without sanctions any attempts to impose reciprocal obligations (an important tenet of charitable giving) will be unworkable. It is not in the “best interests of children” when their parents have no conditions put on receipt of welfare. For instance the WWG recommended that where drug abuse is preventing employment a beneficiary must accept, where available, treatment. It is not in the “best interests of children” to have a parent who is abusing alcohol or drugs.

TWELVE

The Welfare Working Group was established in April 2010 to “conduct a fundamental review of New Zealand’s welfare system and to make practical recommendations on how to improve economic and social outcomes for people on a benefit and New Zealanders as a whole”. In August 2010, the Welfare Working Group published "Long-Term Benefit Dependency: The Issues". In late November 2010, the Welfare Working Group completed an “Options Paper”.
Both reports are notable for their misuse of data and ideologically loaded language while ignoring the reality and causes of unemployment in New Zealand today. The Welfare Working Group has manufactured a crisis that doesn’t exist and painted a picture of ‘long term welfare dependency’ that is just not reality.
There is a crisis in our country but it's not a crisis of welfare dependency. It's a crisis of a depressed economy and failed economic policies – that do not treat full employment as a goal – causing many tens of thousands of New Zealanders to face a precarious existence with either no work or poorly paid, insecure work.

The Methodist Mission accuses the WWG of misuse of data with no evidence to support this claim. They have themselves wilfully misrepresented the current situation in New Zealand by selective use of data. The WWG group was tasked with examining long-term welfare dependency which exists mainly among domestic purposes, sickness and invalid beneficiaries, not those on unemployment benefits. In its own report to the WWG, Treasury found that the benefit with the most potential for reform was the DPB followed by the Invalid’s benefit.

THIRTEEN

Finally the Mission urges its members to:

Write a letter to the editor of your local paper. Challenge ill-informed criticisms of beneficiaries and welfare support.

The Christchurch Methodist Mission should itself have become better acquainted with the ‘facts’ about long-term dependence before launching an attack on the work of a group which had at their disposal the best advice and data available from MSD, Treasury, the OECD and many other experts in their fields. Instead it has produced an emotive, misleading and somewhat pathetic piece of propaganda that will do nothing to improve the lives of those people welfare reform is intended to help.

Recurring themes: whanau first

A theme that recurs on this blog is recurrence itself. Last week I wrote about the idea of the single benefit and how long it had been around. Yet some media, often too young to know otherwise, regard these ideas as 'new'. Here's another today from Paula Bennett. This was at least prefaced with the description of "re-opening the debate":

Social Development Minister Paula Bennett is reopening the debate on the "whanau first" childcare policy, questioning if it is "doing well" by abused children.

When at risk youngsters can't live with their parents, Child, Youth and Family workers look first to extended whanau or people connected to the family to provide a home.

However, the Kahui twins, whose tragic death in 2006 shocked the nation, were living with their father in the Auckland home of their grandparents. The twins would have turned five tomorrow.

Flashback 11 years to head of Maori Strategy for CYF at that time. Peter Douglas caused waves when he urged removal of at-risk Maori children beyond the whanau. Tariana Turia, then a Labour MP, said, “I am totally opposed to children being raised outside whakapapa links.”

He referred to the tragic case of Lilybing.

“I saw a really interesting example of how whanau gather and support each other and it was centered around a little girl killed in the Wairarapa, and that whanau gathered and supported and hid from the police….So if we are going to talk about whanau let’s talk about all of them.”

I hope that after the 2011 election National are not beholding to the Maori Party because there are areas, and this is one, where Tariana Turia is wrong-headed and will try to stand in the way of her younger, yet senior Minister.

Recent sketches

Two recent efforts - one a commission, the other a gift for an 88th birthday.






Although I am still in the shop three months on, it is getting tough. I can pinpoint the turning point. The Christchurch earthquake. Maybe it was just coincidental (Sam says people are donating any spare money) but I haven't had a paying job since and will have to go into debt to pay the next rent instalment. Have printed and am delivering around 600 flyers so maybe that will produce a result. There are still lots of people saying they have plans to commission a work and occasionally someone walks through the door and buys a painting but I need to decide how in debt I am prepared to get. I don't give up easily :-)

We should be grateful

A comment came in overnight. It'll get no attention if I publish it at the post it responds to, When the DPB pays more than the average female wage and one would expect the author wants her thoughts noted.

goodkiwimum has left a new comment on your post "When DPB pays more than the average female worker...":

how dare you. you are the exact reason women and children grovel on in this country. one day lady you will be old and need my kids taxes to pay your effing "welfare". i expect this rubbish from men, not from women and especially not from mothers. if you are griping about wages, then gripe about wages. why will solo parents always be bandied about like the banner for misdeeds in this country. the dpb annually costs this country 2.9B, out of a total social welfare budget of 21B, where does the other 85% go, i dont effing care, over one hundered thousand families are looked after on that meagre portion of welfare, less than 10%of our adult population caring for the next generation, supporting your future. Meanwhile 122 mp's languish around doing little to improve our country, selling it off in fact and squabbling all day in some foolish kangaroo court, soaking up over 16M in wages alone. let alone expenses...oh and please dont get me started on all the self employed people who ritually screw their taxable income down to under half of what they should declare due to lax income tax laws for the privelaged and this is not costing us apparently. so yeah, you just keep on picking on women and children, we've done it for thousands of years, why stop now, we're just getting so bloody good at it now...
http://werewolf.co.nz/2011/02/ten-myths-about-welfare/

And I've just discovered a second comment in my junk tray;

oh yes and I quote "Moreover, other forms of unacceptable behaviour leave benefit fraud far behind in the dust without attracting the same negative stereotypes. The major foreign owned banks for instance finally agreed in late 2009 – and only after being pursued at great expense through the courts by the IRD – to cough up $2.2 billion of what they owed in unpaid taxes. Meaning : the settlement figure GREATER than the total amount lost in benefit fraud last year" all you people need to get over welfare and dig out the people who are really ripping this country off

Shocking waste

The really 'big' idea that comes out of the WWG report is the recommendation to move to a single benefit and extend employment services to most beneficiaries.

We propose that all people seeking welfare support would apply for Jobseeker Support. This common support would start with the assumption that people can work and would send strong signals about the value of paid work.

• Jobseeker stream – Most people who enter the system and apply for Jobseeker Support would be expected to take steps immediately to move into paid work, including applying for job vacancies. There would be clear signals about the consequences of not actively looking for work and the expectation that any reasonable job offer is to be accepted. A range of targeted support would be available, such as childcare support and job search assistance.

• Transition to work stream – For people with significant vocational and non-vocational barriers to securing and maintaining paid work there would still be the strong default expectation that they would transition into paid work, but there would be a more flexible, tailored approach to take account of their particular circumstances. Work-focused interviews, action plans and work related activity would be fundamental.

What intrigues me about this proposal is that Labour was on this track six years ago.

6821 (2005). Judith Collins to the Minister for Social Development and Employment (27 May 2005): In what ways is the new work-focused service for all beneficiaries expected to underpin, or move towards, the single core benefit?

Hon Steve Maharey (Minister for Social Development and Employment ) replied: The new service model, that is being trialled in 12 prototype sites, extends employment services to all beneficiaries, regardless of benefit type. Delivering services based on individual circumstances rather than benefit categorisation is integral to the concept behind the proposed single core benefit.

And...

3168 (2005). Judith Collins to the Minister for Social Development and Employment (09 Mar 2005): What is officials' current best estimate of the number of add-ons that will be required on top of the single benefit?

Hon Steve Maharey (Minister for Social Development and Employment ) replied: As part of the announcements in February 2005, I outlined three areas of additional support; accommodation, family support and disability. These are the subject of ongoing work.

And...

3162 (2005). Judith Collins to the Minister for Social Development and Employment (09 Mar 2005): Further to written question 2152 (2005), what has been the frequency of meetings of the group comprising senior officials from the Ministry of Social Development, Treasury, Department of Labour, Ministry of Health and the Department of Prime Minister and Cabinet, which provides guidance on the co-ordination of the work programme and options for the development of the Government's plan to introduce a single core benefit, in the last 12 months?

Hon Steve Maharey (Minister for Social Development and Employment ) replied: The group comprising senior officials from the Ministry of Social Development, Treasury, Department of Labour, Ministry of Health and the Department of Prime Minister and Cabinet, which provides guidance on the co-ordination of the work programme and options for the development of the Government's plan to introduce a single core benefit meets fortnightly or as required. The group’s first meeting was held on 13 August 2004. The group last met on 30 November 2004, further meetings are yet to be scheduled. This is also my response to written parliamentary question 3163 (2005) to 3165 (2005) and 3167 (2005).

And finally...

2263 (2005). Judith Collins to the Minister for Social Development and Employment (25 Feb 2005): What are the names and dates of any reports or written advice received during 2000 relating to the idea of a single benefit?

Hon Steve Maharey (Minister for Social Development and Employment ) replied: There are three reports relating to the idea of a single benefit that fall within the scope of the member’s question. These are: * 15 June 2000 Social Assistance: Paper One: The Context and Reconfiguring the Community Wage * 12 September 2000 Social Assistance Strategy: Goals and Work Programme * 1 December 2000 Benefit Design: Social Security Benefits for those of Working Age

So not such a new or radical idea after all. A mass of reports, trials, and high level meetings done and dusted and back to square one.

And just one more question from me.

How much time and money do government and bureaucrats waste?

Aotearoa - "safe and wholesome"

Sue Bradford has certainly become more extreme since leaving parliament. About the WWG, last week this was reported;

Former Green MP Sue Bradford said the group seemed to be "looking to Nazi Germany for inspiration, with its underpinning 'work makes free' philosophy, attempted eugenic control of a portion of the population, and its potential racist implications for Maori".

How do you derive that from a report that essentially finds there are far too many people, disproportionately Maori, living off the extremely-stretched public purse because they have children to care for and no jobs, and to at least arrest the problem they should be offered free contraception?

Then yesterday she started blogging about 'baby farms' (next it'll be 'baby-farmers' conjuring up images of the baby killer Minnie Dean, forgetting we have many more recent examples of people who killed their own children). She is reacting to the proposal that the limit of childcare centres rolls be raised from 50 to 150. But this is the statement that stunned me.

And what of the wellbeing of the staff attempting to provide care and education in conditions more reminiscent of Eastern Europe than of safe, wholesome little Aotearoa?

Aotearoa, safe and wholesome?

You mean since the removal of section 59 Sue? I must have missed that.

Choice from government: work or pregnancy

Sense from The Spectator:

Few could doubt that welfare reform is most urgently needed. The British welfare state is now incubating the very poverty it was designed to eradicate, creating what Beveridge called the ‘giant evil’ of idleness. The welfare state, in effect, ‘employs’ the people who would otherwise be part of the economy. Women suffer most. Girls leaving British schools without decent qualifications are given a choice by the government: work or pregnancy. A lone parent with two children in Britain is assured more disposable income than a hairdresser, post office worker or clerk. Only those both living and working in Westminster could fail to see why this is a problem.

(Hat-tip, The Welfare State We're In)

Roger Douglas - political swansong that needs urgent attention

Roger Douglas speech to the House on the Budget Policy Statement 2011:

On the 28th May 2009 I said in this House that “this is a budget of deficits. A deficit of spending, a deficit of the current account, a deficit of courage, but most importantly, a deficit of imagination”.

I realise that I got it wrong – I was being far too generous to the Government. This country is up the proverbial creek, not only without a paddle, but in a boat that is quickly sinking. We are running a cash deficit of $300 million a week (which is about to get much larger) and the Government’s response has been to act like cowards.

They have refused to do the right thing. They want to fund reports, hold press conferences, give speeches – do everything humanly possible to avoid making any decisions that might be unpopular. I am sick of it. We are in a state of financial ruin and the Government wants to sit on its hands. I am disgusted and have had enough.

New Zealand faces problems that are of a long standing nature. If we look around the world we can see inspiring examples of countries that have had the guts to do what is right, made the tough decisions, and are now enjoying tremendous success.

Their economic prosperity has meant that the vulnerable and old in society are looked after, the physically able have access to productive jobs, the sick have access to healthcare and their children are well-educated. These are the hallmarks of a functioning society. For many politicians in this House a vision of a prosperous society is just too difficult for them to fathom. Steve Chadwick made this clear when she said that her children had already resigned themselves to earning less in New Zealand than they would overseas. Is this the vision and inspiration we see coming out of the Labour Party.

What a great future and vision she has instilled in her children for New Zealand. Instead of looking for reforms that could see us pass Australia many politicians in this House have given up! It is a disgrace and unacceptable from a politician in this House. If this is what you are selling to New Zealand as their future you should give up.

In this speech I do not want to focus on a comparison with Australia, the National Party by rejecting the 2025 taskforce report shows that they do not want to catch Australia. This was too ambitious for them. I want to look at a country that we should be outperforming almost in every respect – Singapore. Singapore has everything against it, it has roughly the same sized population as New Zealand, it has absolutely no mineral wealth, and it could easily fit into Lake Taupō. In almost every respect we should outperform them, however the reality is that we do not even come close.

Let us draw comparisons between the two countries. First, New Zealand GDP growth in 2010 was under 1 percent. Singapore grew at a whopping 14 percent. In 1960, our GDP value was almost 3 times that of Singapore. In the last 20 years, Singapore has raced ahead. In 2015, Singapore will have a GDP value that is 3 times that of New Zealand. If we are to look at labour productivity per capita in New Zealand dollars – Singapore labour productivity in 2010 was $182,546 per person, that is almost twice New Zealand’s $93,365.

Why have they been able to achieve such prosperity with no minerals, no land and a relatively small population? They certainly did not do it by giving $43 million loans to private televisions channels. It is because they were willing to make tough decisions.

Government expenditure accounts for only 17% of GDP, that compares to New Zealand’s 43%. Their tax rates are also low, the top take rate being on 20 cents in every dollar kicking in at around $320,000 New Zealand dollars rather than the 33 cents which kicks in at $70,000 in New Zealand. Most importantly, their politicians had a vision for the future, they put aside short-term political gains and focused on the future – in short they had the guts to do what was right. They outlined a blueprint of where they want to go and they moved swiftly to achieve it. In doing so, they have left New Zealand in the dust.

But that is enough of that. What vision should we lay for New Zealand’s future? The first point should be to not accept apathy and poverty. We need new leaders that are inspired and inspiring. They need to implement quality reform. I want to outline what will be needed to leap over Australia and catch Singapore.

We need to decide to switch from government delivery, to private sector delivery like Singapore did in a whole range of industries. I have an 11 point action plan to get this country back on track:

1. Tax Choice

1. Introduce a $35,000 dollar tax free threshold.
2. Right to stay on current system for over 30s if they so choose.
3. Allow the poorest in society to keep their money – compassionate.
4. Singapore has a tax free threshold of around $21,000 NZD, and only taxes at 2% up to around $35,000 NZD.



2. Flat tax rate beyond $35,000.

1. Singapore have significantly flattened their tax rate. There top tax bracket is 20%, kicks in at around $320,000 NZD.



3. Replace company tax with an asset tax

1. 1.2 cents in the dollar (not available to fee based industries i.e. lawyers and engineers).



4. Healthcare –

1. Singapore 1 – 3 percent GDP v 9% in NZ.



5. Education

1. Māori – underachievement For Maori, 56 percent will not gain NCEA level 1 or above before they leave school.
2. More generallya third of school leavers fail to achieve NCEA Level 2 or higher.
3. Singapore – education is seen to be a great source of social mobility. Singapore has released statistics recently that show that children from disadvantaged backgrounds continue to achieve academically. Of students in the bottom third socio-economic bracket, about half score within the top two-thirds of their Primary School Leaving Examination (PSLE). This is cannot be said about New Zealand.



6. Welfare

1. Minimum income.
2. Time limit.
3. Re-education.



7. Government expenditure

1. Goal to get total government expenditure under 20 percent – ideally get it to 17% like Singapore.



8. Regulations

1. Get rid of remaining tariffs.
2. Cut through red tape.



9. Immigration

1. Open up immigration – get skilled people in.



10. Reform Government assets



I want to provide a future where my grandchildren live in New Zealand and can earn wages that are competitive with the world. I have a vision. I know how to get there. I refuse to be like Steve Chadwick and let my grandchildren accept that we will always be poorer than everyone else. It is disgusting. It is time to wake up – it is time to lay the groundwork for our children, make the tough decisions, rather than sit back and give in to apathy and poverty.

Willie Jackson at ACT conference

Listening to Radio Live yesterday I heard John Tamihere make mention that Willie Jackson is speaking at the ACT conference this weekend. First I had heard of it."You would speak to a hole in the wall if you were paid to, " Tamihere observed.

What would Willie Jackson have to say to an ACT audience?

Willie Jackson, Broadcaster: Why Maori should be given
special treatment in New Zealand today

First he will have to define what special treatment is, which will at least include having reserved seats on the Auckland council. Hide is completely opposed to that and I can't imagine any ACT member supporting them. Remember ACT is going to heavily campaign on 'One Law For All' this year.

No doubt it will include the recognition of Maori customary title. ACT is ambivalent on that but against the Seabed and Foreshore Bill. So that'll be a red rag to a bull to at least some audience members, Coastal Coalition types perhaps.

He is there because Willie courts any attention, and because ACT are courting media attention. Silly Willie.

No reasoning person can argue with one law for all. But I don't want to be involved with the anti-Maori sentiment it seeks and succeeds in provoking for the purposes of vote-buying. There will be racists in that audience and Willie himself is racist. Result? They will simply reinforce each others views which will only become further entrenched in the process.

Or no. Silly me actually. This is the enlightened, progressive, big-hearted ACT that engages and listens. Humble apologies. We'll have a little less cynicism from you young lady. Yes Mum.

Then and now

It is a shock to me that 1981 is 30 years ago. Yesterday, looking for a incident I want to research, I looked through all of the Evening Post for January 1981. Fascinating but tiresome when on microfilm. Scanning through all the sport and classified and supplementary advertising is hard on the eyes and neck.

What were the issues of the day?

Violent crime was at unacceptable levels and birching was the proposed solution. Birching. Yes. A serious debate was being had by the public and in parliament and penal reforms groups were enacting such a practice publicly by way of protest.

Child abuse was on the rise.

Red tape was crippling business.

Road deaths were out of control and young drivers were the worst culprits.

Unemployment among young Maori was estimated at around 50 percent. But benefits to 16 and 17 year-olds shouldn't be scrapped because the education system couldn't cope with them staying on at school.

And women should stay out of the workforce, stay at home and be mothers, as a solution to generally rising unemployment.

I was 21. That was NZ then and not much progress has been made on many of these issues. The red tape is different, violence is worse but perhaps more localised, child abuse is arguably worse, unemployment is higher than it was then. The best improvement would be in the reduction in road deaths - although you wouldn't know it listening to the media.