In anticipation of Cunliffe's speech

Tomorrow David Cunliffe will bombard us with statistics about growing inequality.

That can be measured in various ways - household income, individual income or wealth.

The best source of data is the Household Income Survey.

Just to provide an alternate view I've pulled out some of the graphs that show a rosier picture than the one Cunliffe is going to paint.

The first compares the ratio of household incomes  between those in the 11-20th percentile (low) to those in the 71-80th percentile. Inequality fell between 2004 and 2010 and became volatile with the GFC.

Going on to look at individual incomes here's the gini coefficient for NZ over the same period.

Then we can compare NZ's trend to the rest of the OECD

The rest of the developed world is becoming more unequal whereas NZ is becoming less.

Another representation of NZ's lower inequality is shown in the next graph which depicts the share of income received by the top 1% 1920 - 2010

Back to NZ. Child poverty and population poverty rates have declined since 2001 by every measure.

Child poverty rates (%) on four measures

	AHC			BHC
	AHC ‘fixed line’ 60%	AHC ‘moving line’ 60%	AHC ‘moving line’ 50%	BHC ‘moving line’ 60%
1998	-	28	20	20
2001	37	30	21	24
2004	31	28	19	26
2007	22	22	16	20
2009	22	25	18	19
2010	22	26	16	20
2011	21	25	16	19
2012	21	25	17	18

(The formatting has blocked the report-highlighted column - the AHC 'fixed line' 60% measure - where the numbers fall from 37 in 2001 to 21 in 2012)

Population poverty rates (%) on four measures

	AHC			BHC
HES year	AHC ‘fixed line’ 60%	AHC ‘moving line’ 60%	AHC ‘moving line’ 50%	BHC ‘moving line’ 60%
2001	25	20	13	18
2004	22	20	14	21
2007	18	18	13	18
2009	15	18	13	18
2010	15	18	11	18
2011	16	19	13	17
2012	14	17	12	16

(The formatting has blocked the report-highlighted column - the AHC 'fixed line' 60% measure - where the numbers fall from 25 in 2001 to 14 in 2012)


Overall, if it is possible to generalise such a complex period of change with many factors contributing to income and wealth, a few stand out for me.

The one I rail against so much is the enormous growth of one parent families since the sixties. They are the poorest families and NZ has many of them.

Since the mid nineties real household incomes have grown across all percentiles but faster for those in the higher range. And they have grown faster than wages and salaries. The reason is many more parents - especially partnered parents whose labour force participation rates are higher - work today. But relationship breakdowns make parents poor.

Compared to the sixties - when inequality was lower - reliance on benefits is much, much higher. It was just a given that the welfare state would eventually drive up inequality. The least able would become more so as the disincentive to choose education, work and marriage grew. Yes, the large increase in inequality through the 80s and early nineties was mainly driven by a recession worse than the one just experienced. But even when employment improved dramatically during the 2000s, workless families with dependent children remained so.

That's the problem that needs solving. Getting society to structure itself in ways that are most conducive to building incomes and wealth. Strong families.

I suspect that whatever Cunliffe comes up with won't do the job.

ACT and cannabis

According to the NZ Herald today:

Mr Boscawen said he strongly believed the leader should also stand in Epsom.
"I believe we should pick our best and most experienced person as the leader and offer that person to the people of Epsom."
"I believe if split that role we send mixed signals that the person we think is good enough to be the leader, is not good enough to be the Epsom candidate."
The last election showed that there was also a risk of conflict.
"We had Don Brash come out and promote the liberalisation of marijuana and while that may have had the support of five per cent of the population, John Banks knew that was fatal for his campaign and strongly opposed it."
The public then witness a conflict between the leader and the Epsom candidate.

Cannabis decriminalisation should be a peripheral issue for ACT. Nevertheless denying a position is untenable. It looks dodgy. It's permissible to state that members of a party are divided and until the actual legislation came up, the way the party will vote is unknown. Or that it would be a conscience vote and MPs would vote accordingly. It shouldn't have created the problem that it did back in 2011.

But really. Claiming only 5 percent of the population supports liberalisation? This tells me John Boscawen is also anti. Why not just say so? I think ACT would reap more kudos for admitting they are divided on the issue BUT jointly and strongly committed to individual responsibility, low tax, and small government.

TV3′s Campbell Live Mon, 26 Sep 2011, asked viewers “Should cannabis be decriminalised?” and 72% replied yes by text or email.

A new poll has found that almost two-thirds of New Zealanders are against legalising cannabis....another poll by UMR Research [2012] which asked a different question found last month that only 35 per cent of New Zealanders wanted cannabis to stay illegal, 17 per cent wanted it fully legalised and 46 per cent wanted it "decriminalised".

Males bore the brunt of the recession

Statistics NZ released a paper today about the effect of the recession on men and women.

Female labour force participation held up much better.

The main reason is that females work in public sector protected jobs - health, social and education sectors. Men work in the private sector - manufacturing and construction. Of course, ultimately, the public sector jobs rely on revenues gathered from the private sector.

Worth thinking about the graph above next time you hear public sector employees moaning about conditions and pay rates. At least their security has been better than others enjoy.

Adoption versus abortion

From the NZ Initiative's weekly newsletter comes this graph:

The NZ Initiative doesn't offer any narrative and I haven't got any suffice to say it's an interesting fact that both opposition to adoption and access to abortion are feminist driven issues. Would you consider the story this graph tells a successful outcome of feminism?

(The blue line includes adoptions of overseas children).

Would UK Labour's education policy suit Cunliffe?

If he wants to outdo National, perhaps this policy could make an appearance in Cunliffe's State of the Nation speech next Monday (reporting from the World Socialist Web Site):

Britain: Labour’s plan for licences another attempt to vilify teachers

By Margot Miller
23 January 2014

In another bid to outdo the Tories in attacking the working class, Shadow Education Secretary Tristram Hunt recently announced that under a Labour government, teachers working in England’s state schools would have to be licensed every few years.
This would involve both continual assessments of a teacher’s competence, as well as an external assessor making their judgement on whether a teacher is fit to teach. Originally proposed by the previous Labour government’s Education Secretary Ed Balls on a five-year cycle, Labour intends to consult with the teaching trade unions in order to implement teacher licensing.
According to Hunt, the latest proposal is intended to give teachers the “same professional standing” as doctors and lawyers, “which means re-licensing themselves which means continued professional development”. He continued, “If you’re not a motivated teacher... passionate about being in the classroom— you shouldn’t really be in this profession. So if you’re not willing to engage in re-licensing to update your skills then you really shouldn’t be in the classroom.”

State inconsistency about pets and beneficiaries

Contrary to what some believe, my long-term advocacy of welfare reform is not about being mean or punitive. It bothers me that HNZ is planning to take a hard line with tenants who have pets. According to the Otago Daily Times:

The SPCA says Housing New Zealand's plan to evict dogs from state houses could be be "catastrophic'' for the animals and community.
Documents released to the Otago Daily Times under the Official Information Act revealed a plan to allow dogs to live at a state house only "in exceptional circumstances''.
HNZ considered dogs a "barrier to independence'' that made it difficult for tenants to "move on'', the documents revealed.
The SPCA said in a statement today that the policy seemed like an overreaction to what was a minor problem with only 37 reported incidents out of an estimated 40,000 dogs.
"Such a policy will cause real distress and suffering to the dogs and the owners who consider their pets as members of their family,'' the statement said.
"The wholesale eviction of 40,000 dogs would be catastrophic for the dogs and the community.''

Without doubt the crossover between beneficiary, known-to-CYF, and HNZ tenant is substantial.

And MSD knows that involvement with animals can be really beneficial for building empathy. About the Epuni Care and Protection Residence and animal visitation:

“Developing empathy is natural, but exposure to violence interrupts this process. Contact with safe, loving others can begin to redress this harm.” Sputnik’s planning to get his own dog one day. “He’ll be my best friend, and I’ll call him Sputnik II.”

Not if you live in a state house you won't.


Update

A beat-up perhaps? The NZ Herald reports today;

Ms Pivac [spokeswoman] said HNZ reviewed its dog policy in 2012 because it was concerned about the seemingly high number of tenants who had dogs without permission.
"At that stage we did consider taking a harder line on dogs, but in the end we have ended up taking a pragmatic approach to what is always a difficult topic for us.

It is performance pay

John Key should just say his new education management  scheme IS performance pay instead of denial.

Lots - if not most - people are paid on performance. If they don't perform they don't get paid. When they perform well they get paid more, even if that requires initiative on their own behalf eg a change of employer. When I take a commission I am explicit that if the commissioner isn't satisfied, they won't buy the painting. Key's scheme tells teachers and principals that if they are a cut above, there is now a new opportunity to get paid better. Good job too.

What's wrong with performance pay anyway? What's with the drive to protect mediocrity? It can't be fair whatever way you approach it.

Shearer on "hand-outs"

Ex Labour leader, David Shearer has made some surprising comments in a column published in the NZ Herald today.

Despite sponsoring a private members bill to feed children in decile 1-3 schools he obviously has major misgivings about it.

Since my Food in Schools Bill - to provide food to lower-decile schools - was drawn out of the Parliamentary ballot in October, I've been rethinking this course of action.
My meetings with principals, doctors, charities and communities have convinced me that some important adjustments should be made to the bill.
My research took me to a wonderful school, Owairaka District School, where 8-year-old students served me a lunch of vegetarian pizza from their own pizza oven, salad from their garden, and muffins made with eggs from their chickens and honey from their hives.
Owairaka is a decile 2 school but the children are kept nourished and learning through this innovative garden-to-table programme.
But more critically, they are picking up the lifetime skills of gardening and food preparation - and they are doing it alongside family and community volunteers who also benefit.

It's win, win, win - so much better than a hand-out for the kids - and it raised a question I have grappled with since my bill was drawn.
Is it right to impose a one-size-fits-all solution on to every low-decile school in the form of a food hand-out?

An important Labour MP questioning the hand-out philosophy? That won't sit well with his colleagues.

There's an old saying: give someone a fish and it will feed them for a day; teach someone to fish and it will feed them for a lifetime.
Of course, we all agree that no child should be hungry at school. But what's missing is a programme that will not only fix that but also improve nutrition and ensure self-reliance.
Before coming into politics I ran huge feeding programmes for starving kids, including one for 30,000 children in Somalia.
Without that food, those children would have died. But the programme was always designed to be temporary. As soon as the crisis passed, the families moved on, relying on themselves.
My fear is that we will institutionalise dependence through relying solely on a feeding programme. We need to be far more forward-looking.

Surely Shearer has extended his thinking beyond the provision of food? Dependence is firmly institutionalised amongst certain groups in this country thanks to weekly cash hand-outs. Yet his party wants to make those hand-outs more generous in terms of availability and size.

And as it stands, the hand-outs aren't there to cushion until the "crisis [has] passed". For many they exist to fund a life of chosen dependence on other people's money. That institutionalisation then saps them of the will to take responsibility for things like feeding their children. They simply expect more hand-outs.

However, despite his misgivings Shearer continues:

My bill originally aimed to legislate for food to be available in every decile 1, 2 and 3 school that wants it, so poorer communities can have confidence their children won't be hungry at school.
That's a start, but I'm going back to the drawing board so we can address the issues of nutrition and encourage self-reliance. We have lost the basic skills of how to garden and provide for ourselves.

As well as how to work and provide for ourselves.

Regarding feeding kids in school, Shearer's obvious conflict is shared by many. To solve it the child is separated from the parent. The failure of the parent is ignored in order to address the child's need. I think it's a mistake. It's only going to breed more reliance on the state. I fully expect that when Labour introduced the DPB somebody was arguing that is was necessary so single parents could ensure their childreen were fed.

But what about Super numbers?

Kiwiblog has a post up about the declining benefit numbers. He's analysed the drop in numbers since December 2010. I've left this comment:

Over the period you have chosen to analyse there were 31,000 fewer working age beneficiaries and I agree. that can only be good news (albeit the decrease may mainly involve short-term dependants and reflect economic conditions rather than welfare reforms. Hard to know now the longevity reporting has changed.) But there were 79,000 more superannuitants. When is National going to address this problem?

I don't see Super in the same light as a benefit for a number of reasons. However it's still a debit on government revenue which is growing every year, faster than any decrease in the working age welfare bill.

Eligibility for the very first Old Age pension was set at 65. It's madness to ignore how different 65 year-olds of today are.

Key's obstinence over this matter is one of his few electoral vulnerabilities.