DPB income versus working income

I've blogged the second and third graphs for a reader who wants to compare the NZ situation with the US. (Specific data can be found at Work and Income. Basic DPB rate here Accommodation Supplement here and a plethora of extra help here. Then I suppose you will have to get tax rates and WFF tax credit rates from the IRD website.)

The first graph is from the American Enterprise Institute. Two and three are from MSD, NZ. They aren't directly comparable but illustrate the same problem.

 

Welfare reform questions in Parliament yesterday

There were two Parliamentary questions yesterday relating to welfare reform. The first was from a government MP about the youth reforms. Turns out they are seeking to defer the implementation date of legislation. But only slightly. I'm not surprised given the breakneck speed welfare reform legislation has been going through the various processes. Here's a reminder about what the youth reforms do:

Hon PAULA BENNETT (Minister for Social Development): The bill makes changes to put in place total wraparound support for young people—those who are on benefit and those who are not on benefit—including young teen parents. Currently, we just pay these young people who are on a benefit and leave them to it, with very little follow-up and very little support around them. We are putting a youth provider alongside each young person to support them, manage their benefit, and provide parenting and budgeting assistance, as well as ensuring they are in education, training, or work-based learning.

The second was a cost-quibbling question From Labour. Bennett got a bit stroppy with Ardern:

Jacinda Ardern: Does she have any capacity to fund phase two of her welfare reforms, given Budget documents show that the Ministry for Social Development struggled to fill a $700 million budget shortfall this year, and stated that “the estimated costs of phase two are [even] more uncertain than phase one.”?
Hon PAULA BENNETT: I am delighted that the member is waking up to the fact that these are tough times. Yes, the department has struggled to find $700 million in projected costs from within the department, but we did—but we did—and that has been hard work. We will find the savings that are needed for bill No. 2, because we fundamentally believe that they will make a difference for New Zealanders and their lives and their outcomes. That is what we are working towards.

Meanwhile out of Parliament an accommodation provider is getting stroppy with Bennett:

Social Development Minister Paula Bennett has been told to "get off her fat arse" and visit a caravan park she complained was unfairly hiking rents for "substandard" accommodation. The Waitakere MP yesterday singled out a caravan park in her electorate - Western Park Village - as "very expensive for what I'm sure most New Zealanders would see as quite substandard living". But the park owner, Darryll Heaven, said they did everything they could for many tenants that were forced upon them by Work and Income. "That is absolute bulls . . . That really annoys me because she won't get off her fat arse - she's only 500 metres away - to come down and see us. We've got a dozen staff and we're working 24 hours a day to control the place. She doesn't understand that and if she thinks we're ripping her off, come and have a look at our bottom line any time she likes."

The man has a preoccupation with bottoms.

To a point the accommodation supplement does act as a subsidy to landlords, but WFF 'top-ups' act as a subsidy to employers. So it is ironic that it is Labour driving a campaign against the AS from this standpoint. Correct me if I am wrong but isn't it the left that believe state redistribution is at the heart of a 'just and fair' society? The trouble is they have never been able to figure out how to stop confiscated monies flowing back to source.

US welfare reform loopholes

From The Washington Post and tagged "Big Government" (wouldn't it be great if we had a mainstream newspaper tagging stuff similarly?)


 [The Temporary Assistance for Needy Families bill] incentivized states to create welfare-to-work programs, trying to transition Americans from government dependency to financial solvency.

But states quickly acted to poke holes in that legislation, calling the following activities “work” for purposes of the statute: bed rest, personal care activities, massage, exercise, journaling, motivational reading, smoking cessation, weight loss promotion, participation in parent-teacher meetings, or helping friends or family with household tasks and errands.

This was idiotic. So in 2005, Congress closed the loophole, over the objections of then-Senator Obama.

Now, Obama has walked back the 2005 legislation, using his Department of Health and Human Services to unilaterally waive those work requirements.

Read more: http://times247.com/articles/obama-admin-motivational-reading-journaling-qualify-for-welfare#ixzz20r8QUYay

Judge no dope

The Taranaki Herald had a report that made me laugh out loud. Thought you might enjoy it too.

A Waitara cannabis dealer told a judge he had turned his life around.
Benjamin Teika, 27, spoke directly to the judge yesterday in New Plymouth District Court, saying he was deeply ashamed of his offending, and had taken himself out of Waitara and had been drug-free for 22 days.
"I'm bummed out that I've done this," Teika said.
"You're bummed out that you got caught," Judge Allan Roberts countered, telling him to "cut the waffle".

Success!

Thanks so much everyone for supporting Sam!

She has just found out she is in the Top 4 and will be flying to Christchurch next week for the final judging. One of her designs will be made and modelled and the winner then gets to attend NZ Fashion Week.

It'll be live on the Erin Simpson Show TV2, 4-30pm Tuesday July 24.

Quite an adventure for a 13 year-old who last went on a commercial flight aged three.

Truth Column July 5

My July 5 Truth column is now on-line.

The issue of false rape allegations is a nasty business. FBI data reveals one in four primary suspects is excluded by forensic DNA testing. These cases are circumstantially clear-cut. But what of alleged ‘rapes’ where the act isn’t disputed but consent is? 

More 

More Truth columns here

Great principle - poor application

Great quote from Paula Bennett in the Herald on Sunday about people having large families on welfare :

"There's two words we don't use often enough in this country and that's self-responsibility," Bennett told the Herald on Sunday. "The size of someone's family is their business, so long as they don't expect someone else to pay for it."

Just one problem there. Spot it?

Noble men sacrificing their jobs?

A Hamilton mother of three was jailed yesterday for "mistreating" her 6 month-old through using P while breastfeeding. The article doesn't stipulate how much of the jail sentence was for this count  and how much for possession and dealing.

What caught my eye however was this line:

Her father has had to quit his job to look after them until she is released.

That's a typical modern-day response and generally it requires going on a benefit (so that's the assumption I will make.) This is part of the reason the number of males on the DPB is growing. Absent mothers.

In the past however the view would have been her  father needs to stay in work as he is the only one capable of meeting the financial needs of his grandchildren. He'd be the one charged with putting bread and butter on the table. Not the state.

And the baby is one and the other two are at school for goodness sake. Have they heard of daycare?

(This has triggered a further thought. I have already raised a couple of loopholes regarding new work-testing regimes. Here's another. A mother who's added a child to her benefit has to take a job when that child turns one. In steps the father. He can now start on a caregiver's benefit free from work-testing until the child is 5. It'll happen.)

Last chance!

I blogged earlier about daughter Sam being in the Next Fashion Icon final 25. She's one of the youngest designers at 13. She had a phone call earlier this week from the producers of the show saying she was polling in the top 8 and checking her availability for a Christchurch trip if she makes the top four. The winner gets to see one of her designs made and modelled. The voting closes today so I'm having a last ditch push for her. Shameless, I know.

You can view her video and vote here (mouse over the second screen and use the arrows to find Sam.)

The market well-explained

The market economy is the social system of the division of labor under private ownership of the means of production. Everybody acts on his own behalf; but everybody’s actions aim at the satisfaction of other people's needs as well as at the satisfaction of his own. Everybody in acting serves his fellow citizens. Everybody, on the other hand, is served by his fellow citizens. Everybody is both a means and an end in himself; an ultimate end for himself and a means to other people in their endeavors to attain their own needs.

— Ludwig von Mises, Human Action [1949]

(Hat-tip Future Freedom Foundation)

Another child murder displaying predictable risk factors

Another child murder with all the predictable risk factors:

1/ Child living with 'stepfather'
2/ CYF pre-involved
3/ Inter-generational family disruption
4/ Lives in South Auckland
5/ Living in a state house

And I am guessing

6/ Born onto a benefit
7/ Maori ethnicity involved

There are numerous 'Martins' with gang affiliations and Maori blood. Check out Sensible Sentencing's violent database. Here's one with coincidentally the same Christian name as well.

Waikato police are hunting a man in regards to a sexual assault. A warrant for the arrest of Michael Martin, 33, was issued by the Te Kuiti District Court on May 23, but has not been found. Police believe he had friends who are assisting him avoid arrest. "Anyone found to have aided Martin can expect to face charges," says Det Paul Galletta of Te Awamutu police. Martin is described as Maori, 169cm tall, of medium build, and a gang member.

In which case add another possibility

8/ Gang links

 And here is the innocent victim of this atrocious taxpayer-funded  and enabled lifestyle:

Unenforceable laws and political pretence

The USA Today reports on laws that various states are implementing to restrict what welfare cash benefits can be spent on. They are politically expedient but apparently difficult to enforce.

More states are enacting or considering laws that prohibit people who get welfare cash from spending it on liquor, cigarettes, strip clubs, gambling and guns -- laws that even supporters say are difficult to enforce.

Ten states have passed such laws, and at least 14 are considering them, the National Conference of State Legislatures says.

Under a new federal law, all states must prevent the use of cash benefits in liquor stores, gambling establishments and adult entertainment businesses by 2014. States that fail to establish policies face cuts in federal support.

Welfare recipients use debit cards to buy things or get cash at ATMs. A report by the House Ways and Means committee cited news reports in eight states about people with welfare debit cards withdrawing thousands of dollars from ATMs in casinos, liquor stores and strip clubs.

The Federal government provides the majority share of welfare cash benefits and individual states add to that money. So federal law has to be implemented if states wants to keep receiving funding. But it seems fatuous to make rules that can't be enforced.

So what to do? Well we get back to the whole problem with state welfare on a vast scale. The system becomes so large and the players in it so anonymous the room for misuse is enormous.

Localised, personal assistance through charities etc allow the giver to know recipient. Envisage the Wellington City Mission. They know the people they are helping and no doubt can decide if and when to withdraw that help. They also know when help (cash for instance) is only hindering or exacerbating a problem.

Anyway, that's the ideal world. Back in the real world NZ will probably go down this path in the near future. Oh. I forget. We already are with the new youth benefit which restricts how much cash and where it can be spent for 16 and 17 year-olds, plus 18 year-old sole parents. And in lieu of better I'd have to support this move. But I am saying 'yes' and shaking my head all at once. Politically popular legislation but highly problematic in its execution.

Contrasting views on unemployment and inequality

An OECD report about international unemployment released yesterday isn't overly optimistic

“The recent deterioriation in the economic outlook is very bad news for the labour market,” said OECD Secretary-General Angel Gurría, presenting the report in Paris. “It is imperative that governments use every possible means at their disposal to help jobseekers, especially young people, by removing barriers to job creation and investing in their education and skills. The young are at most risk of long-term damage to their careers and livelihoods. Targeting the most cost-effective policies is essential.”

I can't agree with much of the rest of their prescription - far too much weight on what governments should do. Calling for job subsidies, subsidised training investment, etc ignores the opportunity cost. That is every dollar the government spends can't be spent privately. (Actually for every dollar government spends probably $2 can't be spent privately.) But I can agree that it is paramount the young are not allowed to become permanently detached from the labour market. This then caught my eye:

The OECD also calls for action to tackle other labour market challenges such as rising inequality. The labour share of national income has fallen, often sharply, in most OECD countries in recent decades. This trend is closely related to the overall increase in inequality and is being driven, among other factors, by technological change and greater international economic integration. Enhanced investment in education and skills and better targeted tax and transfer programmes can help to ensure that the fruits of economic growth are more broadly shared, says the OECD.

Just a couple of days back I was reading a review which claimed inequality neither caused nor is aggravating the recession.

The Inequality Fetish

According to liberals, either the 2008 financial crisis and its attendant recession, or the sluggish recovery -- and maybe both -- can be attributed in large part to the high level of economic inequality in the United States. In this view, inequality is an economic malady on its own, even in times of prosperity, says Patrick Brennan, a William F. Buckley Fellow at the National Review Institute. This narrative has been latched onto by many in the field of economics, who then attach their names to the legitimacy of the narrative. The problem, however, is simply this: there is no real evidence that a nation's income inequality either dampens economic growth or worsens financial crises.

Now if you go back to the projection chart above you see that the US - regarded as a rich but unequal society - looks more promising than Europe.

Back to the OECD statists who seem superficially sensible but are actually at the core of the problem.

Individuals operate best under the condition of freedom. Communities and larger societies are only collections of individuals. The freer they are, the more productive and happy they will be.  Government does not represent or embody freedom. It can protect freedom to a degree but it can't create it. Just like it can't create jobs without destroying greater numbers of potential private sector jobs. Similarly government can't create equality without damaging a lot more in the process. Frankly, I don't know why they keep peddling this stuff.

Govt says benefit numbers rise slightly

Interesting that the Minister's  press release about June benefit numbers is titled, "Benefit numbers rise slightly in June."

The June numbers are being compared to May.

I would have compared them by quarter - June to March. That's how the Ministry releases them to the public.

So I did.

Over the past six years, if the March and June quarters are compared there is a pattern. I've marked the ones that featured a rise.

2006 
2007
2008 ^
2009 ^
2010 ^
2011
2012

So the positive pattern continues.

But 320,041 working-age people on a benefit is still very high at around one in eight dependent.

That's what the opposition should be highlighting - not a month to month rise.  Let's see what Jacinda says. As usual she's slow to respond but I don't think she'll be able to resist a dig, given the title of the release.

A novel idea to get business reducing the need for government

Here's a novel idea for getting the private sector and therefore, voluntarism back into sorting social problems. If the below example is successful,  required input from both private and public sources should diminish over time. Though I'd like to know what One Service actually does. The investor may be able to assist the ex-prisoner directly through employment for instance.

(A cut and paste from the Maxim newsletter.)

Social Impact Bonds By Jane Silloway Smith, 26 June 2012

back to top

A recent post on the New York Times website highlights the UK's experiment with social impact bonds — a new, innovative way of thinking about the financing of social projects and programs. In a nutshell, a group called Social Finance has created a financial product that helps connect investors with social service providers. The investors buy social impact bonds that fund a social service provider's project or programme that is designed to achieve particular measureable outcomes in a set amount of time. If the provider achieves their set outcomes, the UK government will repay the investors a portion of the savings they have made from the success of the project or program. The first trial of these social impact bonds is currently taking place in Peterborough. An organisation called One Service has made it their mission to cut down on the recidivism rates of men released from short-term sentences in Peterborough Prison. Social Finance has helped them to find 17 investors to fund their programme via social impact bonds. The better One Service does in lowering recividism rates, the more the government will pay out to these investors from the money the government will save. The idea of social impact bonds is an intriguing one for tackling difficult social issues. It will be interesting to see how the Peterborough trial goes.

Truth Column for Friday June 28

My Truth column for Friday June 28 is now on-line:

Pacific Islanders often get a raw deal, not just because manual work is underpaid in this country, as highlighted in a recent Queen St march, but because poor social statistics relating to Maori are often wrongly attributed to Pacific Island people. For example, welfare dependence, over-representation in child abuse and neglect statistics, and high crime rates. 

 More

Other columns here

Data matching and over-payments - good and bad

The Ministry of Social Development has improved its detection of benefit  over-payments by data matching with Corrections, Housing NZ, IRD, ACC and Internal Affairs. The results:




table IS.3: Data-matching cases completed, and overpayments identified

Financial year1	Number of cases completed	Overpayments identified – amount ($)
2006/2007	39,123	19,012,850
2007/2008	67,838	31,316,452
2008/2009	54,582	20,007,833
2009/2010	74,030	27,870,841
2010/2011	106,408	34,293,370

Note

1. Financial years ended 30 June.

Both a good and a bad result. Good because the over-payments are being identified and bad because there are so many of them. One other positive aspect is that as more over-payments are uncovered the average amount is dropping.

According to the report;

92% of current clients with balances owed are repaying on average $14.32 a week

This repayment applies to all balances owed which might include legitimate advances.

Government-funded lobbyists

The Institute of Economic Affairs has exposed how much British charities receive from government. NCPA summarises:

• Between 1997 and 2005, the combined income of Britain's charities nearly doubled, from £19.8 billion ($30.85 billion) to £37.9 billion ($59.05 billion).
• The largest portion of this growth came in the form of grants and contracts from government departments.
• According to the Centre for Policy Studies, state funding rose by 38 percent in the first years of the 21st century while private donations rose by just 7 percent.
• About 27,000 charities now receive more than 75 percent of their income from the government.

There is little reason why New Zealand charities, especially those working in the social sphere, would depart from this pattern. think about Barnardos, Salvation Army,  etc and the 2,300 service provider contracts MSD has with NGOs some of whom will also be listed as charities.

The problem with this is

It has been argued that state funding weakens the independence of charities, making them less inclined to criticize government policy. However, this assertion only addresses the surface of the problem. Considered more broadly, this strengthening relationship between government officers and charitable causes threatens to undermine democratic functions themselves.

• A normal activity for charities (which usually have niche interests) is direct lobbying of politicians and indirect lobbying of the public.

• While this is not inherently dangerous (lobbying is not a new phenomenon), the true problem comes from the fact that these lobbying efforts are now paid for by the state; in essence, the government is lobbying itself.

• These relationships with enormous interest groups all-too-often grant public officials substantial influence in the public arena long after they are out of power.

I would add to this that most NZ charities have redistributionist, left-wing philosophies. Just look at a list of lobbyists to the social services select committee. Even churches are now receiving considerable state money through contracts. The social services/activist area is highly incestuous.

The article says, the British government is essentially lobbying itself . Ironically in NZ however, the lobbyists are generally opposing government proposals. Not that government is taking much notice. But it's amusing to think of them funding activists only to disregard their representations.

So what's the solution?

One possible solution to these problems would be for the United Kingdom to adopt the United States' approach, which bars organizations from charitable status if they spend more than an "insubstantial" proportion of their resources on lobbying.
Further, a new classification of non-profit should be created for those organizations that receive substantial assistance from the state to avoid confusion with truly charitable causes.

I am fairly sure neither of these approaches is taken in NZ. According to the Society for the Promotion of Community Standards a review of the Charities Act was due in 2012 but has been deferred to 2015.

Student allowance numbers rise 61 percent in 5 years

Student allowances aren't classified as benefits. A case could be argued why they should be. But they are part of the Education budget, not Social Development and Employment.  As it stands, keeping them separate makes benefit stats look better. If someone moved from the DPB to a Student Allowance they officially stop being a beneficiary and become a student. But they remain the same (or very similar) item of government expenditure.



table SA.2: Types of Student Allowance received

Type of Student Allowance received	Students receiving a Student Allowance1
	2006	2007	2008	2009	2010
Single – parentally income tested away from home	11,404	12,704	14,031	18,280	21,041
Single – parentally income tested at home	18,851	21,158	23,202	26,872	31,921
Single – not parentally income tested away from home	1,959	1,987	2,110	3,456	3,404
Single – not parentally income tested at home	14,887	14,467	14,845	20,249	24,067
Single – student in independent circumstances	2,187	2,121	2,071	2,205	2,078
Single – student with dependent child(ren)	1,542	1,572	1,583	1,868	2,243
Couple – both students2	1,684	1,622	1,279	1,512	1,647
Couple – student with dependent spouse or partner2	5,638	5,524	5,288	6,497	7,400
Couple – student with earning spouse or partner2	1,307	1,350	1,296	1,699	2,147
Total	59,459	62,505	65,705	82,638	95,948

Notes

1. The number of students recorded as receiving a Student Allowance during years ended 31 December.
2. Includes couples both with and without children.

The 2010 cost of student allowances was $570 million. Also up 61 percent from 2006 when it was $354 million.

Now for something completely different

My 13 year-old daughter Sam has made the finals of  TV2's Erin Simpson Next Fashion Icon competition.

The best four designers are decided by public vote.

You can view her video clip here and vote if you want too. Just mouse-over the bottom screen and use the arrows to find Sam Mitchell.

Benefits: blackmail money extracted under threat?

The NZ Herald editorialises today about drugs and beneficiaries.

"...using the benefits system as a means of forcing people off drugs and getting their lives back in order has never been considered before."

Let's back up a bit here.

According to the 1965 NZ Yearbook;

Invalids' Benefits-Subject to certain residential and other qualifications, every person of the age of 16 years and upwards who is not qualified to receive an age benefit is entitled to an invalid's benefit if he-

1. Is totally blind; or
2. Is permanently incapacitated for work as the result of an accident or by reason of illness or of any congenital defect.

The other qualifications referred to are as follows:

1. That he has fulfilled certain residential qualifications, these in the main being the same as for superannuation benefits described on page 178.

2. That incapacity for work was not self-induced or in any way brought about with a view to qualifying for an invalid's benefit.

3. Applicant must be of good moral character and sober habits.

My next question is, then, wasn't requiring eligible recipients to be "of good moral character and sober habits" also using the benefit system to control how people behaved? Later in the 1960s (judging by Yearbook information) this requirement disappeared. So in effect the door was opened to addicts.

In 1964 the population was 2.4 million and there were 8,000 invalid beneficiaries in total. In 2012 the population is 4.4 million and there are 84,000 invalid beneficiaries, 6,000 of them drug and/or alcohol addicts.

So now the Minister is trying to put the genie back in the bottle but gets told she is doing something unacceptable.

The NZ Herald continues:

Taking money away from them will make no difference because addicts will go to any length to obtain drugs. Indeed, in some cases, they are more likely to be lured into crime or prostitution to feed their addiction.
Sensibly, therefore, the Government plans to exempt drug and alcohol addicts from sanctions for refusing or failing a drug test. It has, however, hinted that such beneficiaries may be forced to get treatment for their addictions. Such a step should be resisted as the policy detail is finalised. In no other area of health is such an approach taken.
For those suffering from a wide range of mental illnesses, for example, collecting a benefit is not contingent on agreeing to treatment. Why, then, stigmatise addicts in this manner? Specialists in drug treatment are adamant that addicts should not, and cannot, be coerced into abstinence.

So there you have it. We have to support people with addictive drug habits lest they threaten us with crime. In a similar way as we have to support people with children lest the little children suffer. So it took me a while but I get to the point of this post.

In some cases paying a benefit is like paying blackmail money. And our acquiescence is wrong.

Paying it will only encourage more extortion.

Better to be addicted

The main message readers can take from this report is that if you are on a benefit and using drugs, better to be addicted and you won't be pestered to find a job. Tell me I'm wrong. Inevitably pressure will go on doctors to certify more cases as addiction.

I wonder if any older readers can remember what happened in the fifties and sixties when Social Welfare operated under legislation that exempted people who caused their own incapacity, and were not of sober, moral character, from receiving benefits?  Did they actually apply the legislation and were the streets full of drug and/or alcohol-addicted derelicts?

CYF notifications for 2010/11

More from the MSD Statistical Report just released.

The next set of figures is interesting and quite misleading unless you read through the text carefully. Since 2007/08 the Police have been required to notify CYF whenever they attend a family violence incident where children are present. Up until 2010/11 the police referrals were combined in general notifications. Last year where they did not require further action they have been listed separately. So what the following chart actually shows is that notifications not requiring further action are increasing.


 table CY.1: Numbers of notifications received and requiring further action

Outcome of initial assessment of notifications received	Number of notifications received1,2
	2006/2007	2007/2008	2008/2009	2009/2010	2010/2011
Notifications requiring further action	43,845	40,739	49,224	55,494	57,949
Police family violence referrals3	-	-	-	-	57,153
Notifications not requiring further action	28,082	48,722	61,573	69,427	35,645
Total notifications received	71,927	89,461	110,797	124,921	150,747

And what is the ethnic make-up of the children who are subject to these notifications?

Nearly one half of the notifications requiring further action were concerned with Māori children and young people Of the notifications requiring further action between 2008/2009 and 2010/2011: around 46% concerned children and young people identified as Māori 31% concerned children and young people identified as European around 11% concerned children and young people identified as Pacific people.

What type of abuse was found?

 table CY.3: Substantiated findings by type

Type of finding	2006/2007	2007/2008	2008/2009	2009/2010	2010/2011
	Number of abuse and neglect findings from investigation of notifications1,2
Emotionally abused	8,256	8,664	10,938	12,535	12,595
Physically abused	2,274	2,321	2,855	2,886	3,225
Sexually abused	1,194	1,003	1,126	1,201	1,505
Neglected	4,486	4,302	4,677	4,403	4,762
Total abuse and neglect findings	16,210	16,290	19,596	21,025	22,087

So how can the picture be summed up? More notifications of which a smaller proportion required further action. However actual substantiations have also increased. So, notwithstanding I haven't accounted for any demographic change, and CYF may be being over-zealous, it looks very much like the overall situation for children is not improving.

Moving from welfare to Super

The latest Statistical Report from MSD has just been released.

I'm reading through it looking for interesting titbits. 

Here's one.

In the financial year to June 2011 there were 48,307 Super grants made. 16 percent were transfers from another benefit. A further 4.6 percent were to people who had been on a benefit within the last 4 years.

One in five. Sort of reminiscent of the one in five on welfare by the end of their birth year...

Truth Column June 22

My Truth column from Friday June 22 is now on-line.

WATCHING Bronwyn Pullar being interviewed on 60 Minutes provided most people their first opportunity to hear her story first-hand, though much had been written and speculated about prior to this.


Pullar presents herself as a ‘whistle-blower’. She’s had a gutsful of ACC and is going public to force change. So far she has succeeded in bringing down the Minister, the CEO, the chairman and other board members. But what does head-rolling actually achieve?

More

Other Truth columns here

Informed debate or ignorant squabbling?

'Informed debate' is one of those smug phrases used by pseudo academics, students with a smattering of university education who think they are experts, and generally patronising know-it-alls. They  typically call for 'informed debates' until the information disproves their position.

Some comments from The Standard yesterday:

 The average length of the DPB recipient is just 3 years.

I am sure that the average length of the DPB recipient would  best be measured in metres but if he means the average time spent on the DPB, he is wrong.

FACT

Of all sole parents who came on to Domestic Purposes Benefit–Sole Parent or the Emergency Maintenance Allowance in the year to June 1996, just over one-quarter received main benefits for less than three years out of the following 10. One in three received main benefits for eight or more years out of the following 10. 


So let's break that down as:

26% under 3 years
41% between 3 and 8 years
33% over 8 years

While I cannot ascertain an average from the data, it isn't three.

Then looking back from December 2005 of the 114,000 on the DPB at that point

 just over half had spent at least 80% of the history period [10 years] supported by main benefits

 Burt numbers on DPB have sky rocketed under National.
up from 80 odd thousand to 115,00 is hypocritical and another broken promise.

FACT

At December 2008 there were 100,000 on the DPB; at March 2012 there were 113,000. Not all are single parents but the large majority are. (My guess is the increase would have been worse under Labour but we are dealing with facts here - not supposition.)

 That Māori women feature disproportionately in DPB numbers does not necessarily infer a deliberate choice to be on the benefit. To follow your implication further – while 20-23% of people on the DPB are Māori, 77 – 80% are non-Māori.

FACT

43 percent of DPB recipients are Maori (March 2012)

FACT

 45 percent of Maori females aged 20-29 rely on welfare (October 2011)

And just because the irony is breathtaking here is a final comment from a defender of the DPB arguing with a  "witless" right-winger (not me):

Facts can’t enter this person’s world-view, and when they do they get rejected in favour of the familiar ol’ security blankie of prejudice.

So I put up some facts and got told to "piss off".

More on the work-test after one year

Carrying on from yesterday's post about Simon Collins' article which featured a number of talking heads bleating about separating babies and mothers when the baby is 12 months or older. Psycho Milt at No Minister has written an on-the-money post highlighting this drivel.

As I pointed out yesterday, the work requirement may be as little as 15 hours a week. Now it occurs to me that Work and Income already funds mothers on the DPB to put their pre-schoolers into daycare for up to 9 hours a week. That's right. They pay the mothers to look after them as well as paying someone else to look after them.

But surely that practice should stop because it causes the very separation the talking heads are anguishing over. How much support would a campaign along those lines get? Bugger all.

I suspect the only separation that really bothers the types that Collins turned up is when mother has to go to a job she doesn't want. The objection is not about the child's well-being.

Why 22 percent of children born are on a benefit by the end of the same year

NZ Herald social issues reporter Simon Collins does a great job of seeking out 'real' people. And his statistics have integrity. Here are some characters from today's article about the new rule that will work-test mothers who add a baby to their benefit when that child turns one. If you read the full article and get to the objections bear in mind that the work required could be a little as 15 hours a week so hardly represents a wrenching child-mother separation issue. (I started a business when my first child was 6 months old. Luckily I had the help of my mum when needing to visit prospective customers. My devotion  to my baby - now a very stable and well-adjusted 18 year-old - was no less. There might be exceptional cases but the legislation provides for discretion to waive the rule anyway.)

Tough welfare reforms now going through Parliament may deter some women from seeing the sole parent benefit as a viable lifestyle - but at the risk of long-term harm to their children. Social issues reporter Simon Collins reports


Otara administrator Delaney Papua, who turns 20 next month and is expecting her first baby in November, says going on the benefit seems to be just what you do when you get pregnant.
"All the people that I know that have kids go on it, so I kind of just assumed that you have to be on that," she says.
The babies' fathers often have no role in the families they help create, giving them no anchor in society. Papua doesn't expect her baby's father to support her....


Melanie Hoto, 33, worked in a lunch bar on the North Shore and then at a fish market in Tauranga but eventually ended up on the DPB.
"I came back to Auckland and lost interest [in work]. It was so hard trying to find work. I even applied to work here at McDonald's," she says over a hot chocolate at McDonald's in Glen Innes.
"In the end I fell pregnant with my daughter and I thought, 'I get a good amount of money on the benefit, why bother working?"'
Her partner "was never in the picture".
"It was a one-night stand," she says. "He's in jail now for robbing a shop. He was into drugs - a lot of people are into it, it's easy cash."


Another woman, Renee, became pregnant with a flatmate while on the benefit when her first two children were 8 and 5, and says it "was never a boyfriend/girlfriend thing". She also thinks the new law is "fair".
"If the law had been in place, I just would have been probably more cautious," she says.
At another McDonald's recently, she overheard two young mothers with babies talking about how they were trying to get pregnant again.
"I'm loving this benefit shit," one said. "I'm going to have another baby, I'll keep having them, it's free money."

What $32 million worth of change looks like

MSD are investing $31.65 million to get from here...

 ...to here.

(P = service providers of which there are 2,300)

I wonder how much went on the pictures? At least they make more sense than the Whanau Ora ones.

And I also wonder how many times MSD has re-organised its structure and operations over the past few decades?

Bill English questions parameters of drug-testing

Bill English apparently mooted drug-testing all beneficiaries - not just those on the new dole - the Jobseekers Support. That predictably brought a variety of responses. But there doesn't seem to be any guiding principle at play.

Not all workers are drug-tested. Why should all jobseekers? If someone fails to get or keep a particular job because they are failing a drug-test then they shouldn't be eligible to taxpayer suppport.

The broad principle should be anyone causing their own ongoing incapacity to work make themselves ineligible for a benefit. And that would include any working age person.

The bigger issue with drug-testing is how widespread will it become and to what purpose?

Imagine this.

Cannabis is fully legalised but use it, and you will never work.

Cat seeks camouflage

Thomas Sowell's political glossary

Thomas Sowell's political glossary

"A more positive term that is likely to be heard a lot, during election years especially, is "compassion." But what does it mean concretely? More often than not, in practice it means a willingness to spend the taxpayers' money in ways that will increase the spender's chances of getting reelected. If you are skeptical — or, worse yet, critical — of this practice, then you qualify for a different political label: "mean-spirited." A related political label is "greedy." In the political language of today, people who want to keep what they have earned are said to be "greedy," while those who wish to take their earnings from them and give it to others (who will vote for them in return) show "compassion." "

Hat tip The welfare State We're In

Painting poser

This doggie was painted posthumously. The unusual thing about him was he had a missing front leg. So I crafted the painting in such a way as to put the attention on his face rather than chest. Looked like a very appealing chap. I see it is unsigned so it might not have been finished when I took this photo. I think he was a bit hairier by the time he left.

British PM: Welfare system eroded culture of responsibility

 The following is an excerpt from a speech about welfare just delivered by British PM David Cameron:

"Now when we look at how we got into this mess, we can go back in time and see a lot of good intentions.
Why does the single mother get the council house straightaway when the hard-working couple have been waiting for years?
Because governments and local councils wanted to make sure children got a decent start in life, so mothers were given priority for council housing.
Why do we have people on big salaries living in council houses?
Because governments wanted social housing to support hard-working people, so the eligibility criteria were set wide and the tenures long.
Why has it become acceptable for many people to choose a life on benefits?
Because governments wanted to give people dignity while they are unemployed – and while this is clearly important, it led us to the wrong places…
…to job seekers being called ‘customers' instead of claimants…
…and to conditionality on benefits being set at the bare minimum.
As well as the good intentions of governments, there was that assumption of trust at the heart of the system…
...that people would naturally do the right thing…
…that they would use the system when they fell on hard times but then work their way out of it.
This may have worked when the welfare state was born, when there was a stronger culture of collective responsibility in this country.
But as I've argued for years, the welfare system has helped to erode that culture."

It's a lengthy speech and it's all there in respect of recognising the problems.

But there remains a sense of avoiding tough answers.

"Back in the 90s the Clinton administration in the US started time-limiting benefits, and they saw federal case-loads fall by over 50 per cent.
Instead of US-style time-limits – which remove entitlements altogether – we could perhaps revise the levels of benefits people receive if they are out of work for literally years on end.
It is extraordinary that there are 1.4 million people in this country who have been out of work for at least nine of the past 10 years.
So softer time-limits – that increase the incentive to work, that stop people getting stuck in that welfare trap – could be something we consider."

The US reforms were the cumulative result of many states experimenting with reform ideas. I've looked at them extensively and consider they are the best implemented. Cameron misrepresents them here by talking about the total removal of entitlements. There are exemptions from time-limits and enormous assistance-in-kind programs. And individual states/counties still have autonomy with their own funds.

Crucial however is telling able people that the state will help them to a point and beyond that they are on their own. Britain and New Zealand are still too afraid to make that call.

Welfare targets are very soft

According to the NZ Herald:  

"The Government wants Work and Income to cut the number of long-term beneficiaries on a working-age benefit by 30 per cent over five years.....Result. Reduce the number of people who have been on a working-age benefit for more than 12 months by 30 per cent by 2017."

Of the 322,951 working-age beneficiaries at March 2012 214,440 had been on a benefit for more than a year. Back to the NZ Herald: 

"That would see the number of people on working age benefits drop from 78,000 to 55,000 by 2017."

Something isn't adding up. That's because the long-term beneficiaries the government has identified are a discrete group. Those who will be transferred to the new Jobseeker Support. Within that category the government is aiming to move 23,000 into work.

That represents 7 percent of the overall current total.

"Aspirational"?

The tale of two ex MPs

What a contrast ex MPs Rodney Hide and Georgina Bayer make.

 Rodney:

I thought i'd be unemployed about now. Happily it's not turned out that way. I have spent the week up to my eyeballs in mud, knocking over a concrete wall. Who'd have guessed?.....When I was a politician I was supposed to pretend sympathy for people without a job. The truth is I never had much. I always figured there's work to be done for anyone prepared to get stuck in. I now know that's true. I got a job pushing a wheelbarrow and swinging a hammer. Why can't the so-called unemployed? We all know why. They're too picky. The jobs don't suit. It's a bit cold. It's a bit wet. It's a bit hard.

Georgina:

Former Labour MP Georgina Beyer says she is broke and living off the unemployment benefit in a one-bedroom granny flat.... Ms Beyer admits she has been told to "lower her sights", but says some jobs are off the agenda. "I do draw the line at being a crew member at McDonald's. I'm a little bit past that sort of thing."

Remind me which one belonged to Labour - the party for the workers?

Will The Greens supplant Labour?

My Friday June 15 column from The Truth is now on-line.

When last in power Labour introduced an incentive to entice parents on welfare into jobs, the In Work Tax Credit (IWTC). 


The Child Poverty Action Group decided this constituted discrimination against children of beneficiaries and took a case to the Human Rights Tribunal. They lost. 


The Tribunal found that while discrimination was occurring, the government was justified in applying it. 

The Labour government stood firmly behind its policy, bringing in overseas experts to argue their corner.

More

Other columns here

Scottish doctors strike over plans to increase pension age and contributions

This is apparently the first time in 37 years doctors in the UK have gone on strike.

It surprises me that given the various European crises essentially caused by the welfare state, the 'privileged' in Scotland are so strenuously fighting austerity measures, and I wonder how much public sympathy there is for them. I'm no envier but there are highly paid public employees throughout the western world with far more capacity to tighten their belts than most.

Rules about work-testing the DPB

When parents on a benefit face work-testing as their youngest child turns five, some will attempt to avoid this eventuality by adding another baby. In recognition of this the government is introducing a rule that says the work-testing will only be waived till the subsequent child is one year-old.

It seems to me that there will still be grey areas, for instance, what if a subsequent child is born during a brief period off benefit? On re-application for a benefit does the caregiver get 5 years free from work-testing?

So in an attempt to find out what  attention had been given to this scenario I sent the following question to MSD:

In respect of the DPB welfare reforms which will introduce part-time work-testing when the youngest dependent child turns one if that child was been added to an existing benefit, has any official advice or correspondence occurred between cabinet and MSD discussing how the new rule will apply if the beneficiary has a period off benefit and returns?

The reply:

"In response to part four of your request, I refer you to recommendation six of the welfare Reform Cabinet paper, Paper C Parents on Benefit Who Have Subsequent Children"

This is what recommendation six says:

Agree that in implementing and maintaining this policy intent the Chief Executive should have discretion to consider application and, on occasion, exemption in the full range of circumstances where a subsequent child is added to a benefit dependent household.

Is that any kind of answer? Perhaps I didn't explain myself clearly.

I'm not talking about a subsequent child added to a benefit dependent household. I'm talking about a second, third, fourth child born between benefits. What rules will apply to their caregivers? Because as it stands a caregiver could have a child every five years and never reach work-testing so long as that child is not added to a benefit.

And if they could physically manage to add a baby a year to a benefit, that would also exempt them from work-testing.

These 'loopholes' demonstrate why it would be much better to have simple time-limits.

Under the regime about to be implemented I think we will see a pattern developing of repeated DPB-dependent spells in five year clusters (except it won't be DPB spells - it'll be SPS Sole Parent Support spells.)

Stat of the week

The Statistics Department of the University of Auckland awarded me Stat of the Week  at their Stats Chat site for which I receive a $20 iTunes voucher. Ta very much. Don't know what I do with such a thing. But probably one of my kids will take care of that.

The Stat?

That's the big lie.

(Thanks to Eric Crampton for alerting me to the site and competition).

Writing a good story

According to the NZ Herald:

Many young Aucklanders face having to pay for previously free sexual health consultations because of the Government's squeeze on health dollars.

This is expected to contribute to an increase in New Zealand's already internationally high rates of teenage pregnancy and some sexually transmitted infections, including chlamydia.

So I read on to see who is making this claim.

 [ProCare CE] Mr Hooton acknowledged that under ProCare's move "it is possible that teen pregnancy, abortion and STI rates could increase".

 So it appears to be the journalist's suggestion which, put to the 'expert', couldn't be ruled out.

That's a good trick for making attention-grabbing copy.

The subject of the story, limiting health funding in certain areas, seems to be in line with the general trend of more targeted spending, which on one hand is inequitable, but on the other tackles the problems where they are worst.

Asians too single-minded and smart

Have a read of Rodney's column today. It's based on an interview with Ranginui Walker which I happened to hear. I've commented at the site to the effect that I don't care what colour my GP is. But I do want them to be smart and capable, something Ranginui Walker seems to have somewhere down his list of prerequisites.

When Professor Ranginui Walker rang radio recently to argue the case for increasing the number of Maori in medical training in New Zealand, I hardly expected to finish with the view that too many Pakeha are being allowed to become doctors.

More

Super sense of inevitability

It's my view that New Zealanders have a strong sense of inevitability about the eligibility age for Super going up.

So for the life of me I cannot understand the political football it has developed into.

NZ First are backing no change. Winston plays to the entitlement brigade. Key says, according to the NZ Herald:

"This is my challenge to Winston Peters - I dare him to go out there and say he will not under any conditions form a government with Labour even if Labour's policy is to raise the super age from 2020, not in the 3 year period from 2014 to 2017. I dare him to say that. He will not. He will not because he's tricky. He'll find a way around all of that stuff."

It's all so risible, really.

On gay adoption

My Friday June 8 Truth column is now on-line

What a hullabaloo the issue of gay adoption causes.

So many people theorise about its merits or otherwise. But why should anyone with the capacity to love and raise a child well be barred from doing just that? And guess what. If the gay couple were Maori, adoption would be fine.


More

Other Truth columns here.

On gay marriage

Bob McCoskrie sent me a two-pager explaining why libertarians should not support gay marriage. Full of woolly thinking. Bob and I agree on some things but this isn't ever going to be one of them. Below are the 4 assertions made by Maggie Gallagher and a response to them from another source. 

 1.  Government did not create marriage and has no business redefining it.   

1. She wants government to prevent evolution in marriage. Marriage is constantly redefined and conservatives wish to prevent that. So they do want government involvement very heavily, to the point of taxing people in 'unmarried' relationships at higher rates. Was govt. redefining marriage when it allowed divorce? Marriage is always changing and most the time government is playing catchup, it doesn't lead the charge but reluctantly brings up the rear. 

Notice also her non sequitur. She argues that marriage encourages the binding of parents to children. "If encouraging mothers and fathers for children is a key part of marriage’s public purpose, then same-sex couples simply do not fit."

There are many parts to marriage. No marriage is required to fill all of them. Certainly allowing the marriage of post-menopausal woman doesn't fit. Nor does the marriage of women, or men, who are sterile, or men who had vasectomies. There are many functions to marriage not just one.

 2.  When marriage declines, government expands. 

 2. If the decline of marriage causes government to expand, then wouldn't expanding marriage reduce the size of government, so why fight the expansion of marriage?

 3.  Gay marriage has no economic benefits. 

 3. No economic benefits to whom? She is very careful to define economic benefits in odd ways. The benefits to couples, who don't pay the higher tax rates, she seems to ignore. Marriage gives people backup, that is others who care for them. When they don't have that they rely on the state. So wouldn't allowing gays to marry eventually reduce welfare costs?

 4.  The Slope Really Is Slippery 

 4. Slippery slope arguments are mostly impossible to address. Where did the slope begin? Why is gay marriage the beginning and not interracial marriage? 

Also note she says people only have a "right to raise our natural children." Does this mean that adoptive parents do not have parental rights? Is she slipping in Catholic crap to mean no one has the right to children born through IVF? 

And Unsolicitedious has a good post on the subject here. 

Heaven forbid responsibility should be handed back to families

Gordon Campbell agrees with John Key. The qualifying age for Super should stay at 65. Here's one of the reasons why:

"...there’s no easy way of easing the costs involved in meeting the burden of care for our ageing population. If we simply raise the entitlement age and/or cut the pension – and National did both in the 1990s under the Shipley administration – while ignoring the employment context, we will simply privatise the social, psychological and financial costs of care, and hand the responsibility over to families."

Heaven forbid we should shift responsibility to individuals or their families. The welfare state has been such a successful experiment who would want a return to the ethos of personal responsibility?

What educational failure looks like

What educational failure looks like

Good luck with that

The government thinks it can get money out of a DPB recipient's partner if she (usually) is done for fraudulently claiming a single parent benefit.

Just demanding it back from the recipient causes a "gender imbalance" apparently. Paying homage at the equal rights altar now.

Like they get money for unpaid fines and money for child support debt......

And if he has to pay on the principle that he 'benefited' from the fraud, what about a live-in parent or the landlord?

As I said, good luck with that.

Running on empty

One of my all time favourites.

 Sometimes I read stuff that just riles me anew. By now I should be de-sensitised to emotive (yet essentially empty) grandiosity; ignorance of fact and shallow thinking. Sadly a section of the upcoming generation  has been schooled to repeat seductive but superficial reasons for all manner of societal maladies.

I attempted to put a response in a letter to the editor but, I don't know. I've been arguing this so long my pen-to-paper expressions feel as trite as whatever prompts them.

In Green co-leader Metiria Turei's column about protecting children from child abuse the words women, kids, mothers,  families  and midwives appear repeatedly. The word father does not feature. The only inference to men at all appears in the line, "...protecting kids and women from violence and abuse....". This type of unconscious dismissal of fathers, and worse, the perpetuation of the idea that only men abuse women and children, is disgraceful. Official child abuse statistics show that women commit around half of all abuse and neglect, and in 2010 made up 35 percent of apprehensions for child assault.

Like it or not, all the evidence shows (and Metiria Turei calls for evidence-based policies) that children are safest in committed two-parent families, yet social policy of the past forty years has reduced the likelihood they will grow up in those environments.

Ms Turei prides herself on being a feminist and all the gains feminism has brought. But feminist-driven government intervention is also responsible for the alienation of fathers and men from the lives of children. Therein lies a substantial factor in the child abuse problem.

OECD on raising pension age

I have written in favour of raising the Super entitlement age a number of times. I once made the suggestion that as Super is linked to the average wage and the CPI, why not life expectancy? That idea makes an appearance below.

Here's what the OECD is saying:

11/06/2012 - Governments will need to raise retirement ages gradually to address increasing life expectancy in order to ensure that their national pension systems are both affordable and adequate, according to a new OECD report. At a time of heightened global economic uncertainty, such reforms can also play a crucial role in governments’ responses to the crisis, contributing to fiscal consolidation at the same time as boosting growth.

Over the next 50 years, life expectancy at birth is expected to increase by more than 7 years in developed economies. The long-term retirement age in half of OECD countries will be 65, and in 14 countries it will be between 67 and 69. The Pensions Outlook 2012 says that increases in retirement ages are underway or planned in 28 out of the 34 OECD countries. These increases, however, are expected to keep pace with improved life expectancy only in six countries for men and in 10 countries for women. Governments should thus consider formally linking retirement ages to life expectancy, as in Denmark and Italy, and make greater efforts to promote private pensions.

“Bold action is required. Breaking down the barriers that stop older people from working beyond traditional retirement ages will be a necessity to ensure that our children and grand-children can enjoy an adequate pension at the end of their working life,” said OECD Secretary-General Angel Gurría. “Though these reforms can sometimes be unpopular and painful, at this time of tight public finances and limited scope for fiscal and monetary policy, these reforms can also serve to boost much needed growth in ageing economies.”

The Pensions Outlook 2012 finds that reforms over the past decade have cut future public pension payouts, typically by 20 to 25 per cent. People starting work today can expect a net public pension of about half their net earnings on average in OECD countries, if they retire after a full career, at the official retirement age. But in nearly all the 13 countries that have made private pensions mandatory, pensioners can expect benefits of around 60% of earnings.

Conversely, in countries where public pensions are relatively low and private pensions voluntary, such as Germany, Ireland, Korea, Japan and the United States, large segments of the population can expect major falls in income upon retirement.

This could cause pensioner poverty to increase significantly. Later retirement and greater access to private pensions will be critical to closing this pension gap, says the OECD.

However, making private pensions compulsory is not necessarily the answer for every country. According to the report, such action could unfairly affect low earners and be perceived as an additional tax. Auto-enrolment schemes – where people are enrolled automatically and can then opt out within a certain time frame – might be a suitable alternative.

Italy and New Zealand have already introduced such schemes and the UK is set to roll one out in October 2012. However, the report finds that results are mixed, with a major expansion of coverage of private pensions in countries like New Zealand, and having only a small effect in others like Italy.

More broadly, reforming tax reliefs to encourage private pension savings is also needed, as low earners and younger workers are much less likely to have a private pension. Facilitating matching contributions or giving flat subsidies to savers, such as in Germany and New Zealand, would improve their incentives to contribute. To boost confidence in private pensions, governments also need to improve their oversight of funds to ensure that charges are kept low and risks minimised.

This inaugural edition of the Pensions Outlook also includes the first comprehensive evaluation of national Defined Contribution systems, which are now a central feature of many countries’ pension systems. Among other recommendations, the report argues that it is critical to set the minimum or default contribution rate in Defined Contribution systems at an appropriate level.

Contributions to these systems need to be high enough so that together with public pensions they generate sufficient income at retirement. While Australia is moving in the right direction by increasing its contribution rate from 9% to 12%, it remains too low in countries such as Mexico and New Zealand (6.5% and 3%, respectively).

For comment or further information, journalists should contact Juan Yermo of the OECD’s Financial Affairs division (tel. + 33 1 45 24 96 62) or Edward Whitehouse of the OECD’s Social Policy division (tel. + 33 6 25 89 56 67).

Highlights of the report are available at www.oecd.org/daf/pensions/outlook

The big lie of the day

"The vast majority of child abuse is perpetrated by men."

That's according to an editorial in this morning's Herald on Sunday.

The following statistics from 2006 clearly show that females are perpetrating a great deal of child abuse.

And just released official data shows that in 2010 35 percent of the apprehensions for assault on a child were females.

It beggars belief that such inaccurate claims from what should be  reliable commentators make print. "I read it is the newspaper - it must be true...."