Calls to restore benefits to 1989 level baseless

A new book called Child Poverty by Simon Chapple and Jonathon Boston will be published next week so the pre-release media activity has begun.

On The Nation today Lisa Owen interviewed Children's Commissioner Russell Wills and author Jonathon Boston:

Headlines:

Children’s Commissioner Russell Wills advocates restoring benefits in real terms to where they were a generation ago.
Wills: “So let’s restore it back to where it was when we were kids. I don’t think that’s unachievable.”
Prof Jonathan Boston agrees benefit system needs restructuring: “..people who are wholly dependent on the benefit now are almost a quarter worse off relative to other citizens who are in work than was the case a generation ago.”

As most of the child poverty problem is generated by single parent children, let's check that. A 'generation' back would be 1989 - before the 1990s benefit cuts.

According to the 1990 NZ Yearbook

Any of the above benefits with dependent children (incl. Family Support)
Solo parent and one child	249.14
Solo parent with two children	280.87
Each subsequent child	16.00
Couple with one child	291.08
Each subsequent child	16.00

('Any of the above benefits' refers to unemployment, sickness etc but it is important to note the rates include Family Support).

 Family support. The maximum amount payable is $36 a week for the first child and $16 a week for each subsequent child. Family support is provided to people with dependent children who meet income eligibility requirements. It is paid to income-earners through taxation (see section 25.2, Taxation), but is delivered to beneficiaries and non-earners through the social welfare system.

 Family benefit. This is a universal benefit paid at the rate of $6 per week to the carer of every dependent child in recognition of the contribution of families to the care of children. Its value has been $6 a week since 1979, and the direction of policy in recent years has been towards supplementing family benefit with additional assistance to low- and middle- income families.

Let's use the sole parent with two children example.

In 2014 dollars $280.87 (which includes Family Support but not Family Benefit) would be $509.14

Accommodation benefit. Accommodation benefit is for people whose income and cash assets are limited and who have high accommodation costs. The maximum rates of assistance at April 1989 were $40 per week for a single person, and $65 per week for a married couple. A supplement of up to $20 per week may be paid for elderly people and people with disabilities who are in residential care.

So even at the maximum rate of $40 (or $72 in 2014 dollars) that brings the total to $581.14

Finally adding in Family Benefit - $12 (or $21.76 in 2014 dollars) provides a total of  $602.90

How much is a sole parent with two children getting today?

Straight from the Minister's mouth:

“An average sole parent with two children under thirteen, living in South Auckland would receive around $642 on benefit, including accommodation supplement and a minimal extra allowance for costs.”

For simplicity's sake I'll table a breakdown for a single parent with two children aged under 13. Figures are all in 2014 $. The 1989 total is about half way between the highest and lowest 2014 totals (left click on image to enlarge).

Youth crime blamed on poverty

About West Auckland apparently:

Family structures are being broken under economic pressures and the facilities are not there to stop children from falling into a cycle of violence and poverty.

Family structures are not even formed in many cases, let alone broken. If a society is prepared to reward the worst impulses and absence of positive values in people, it can hardly be surprised at the result.


I was asked to speak on Leighton Smith's show last Thursday about youth crime in general (sparked of course by the latest West Auckland incident) and what I thought was contributing and if we could turn the ship around.

I talked about how violent incidents tend to stay within dysfunctional families. In this instance it has spilled over. But the dysfunction has been there for decades. The dysfunction that comes from making children a source of income and allowing them to be held hostage to their parents lifestyles.

I talked about the fact that young men  in prison are much more likely to be fathers. Criminals have more children.

Can we turn it around? We will always have criminality but yes we can reduce the number of children who are being born to parents with no financial or emotional ability to raise them. At least the current government has identified young people as their focus and are making greater demands on them in return for support and that is showing some positive results (albeit the results may be simply correlated.)

But there is no point in treating the whole population to cure a problem that rests in a small minority. We do not need to monitor every child and we certainly don't need to pour more money into every home with young children.

(I have probably mentioned this brief paper previously but the links between crime and welfare have been researched and proven. Worth a read:

" There are many factors contributing to the rise in juvenile violence and crime, from the glorification of violence in the media to the failure of the “war on drugs.” But, today, I would like to focus on a factor that has received far less attention — the relationship between the welfare state and crime." )

Red Alert - not so alert

Blogs reflect the level of interest, enthusiasm and commitment the blogger/s feel.

Labour's MP blog, Red Alert, used to be a very active place.

In election year an upsurge in activity would be expected.

Since the election date was announced on March 10, there have been 4 posts.

In April there were 0 posts compared to 18 in April 2013 and 49 in April 2012.

And I don't accept that MPs are simply too busy campaigning to contribute. Social media is a hugely important part of the campaign.

So what do you take from this?

Does Labour look like a party remotely interested in winning an election?

Instinct and babies

"I brought a baby into the world but I still had no idea how to raise her, how to change her, how to feed her properly....I had no idea at the time Del-C was born that when she cried it meant she was wet or hungry."

I read this out to my 15 year-old daughter and asked,  Would you know why a baby was crying? Well, yes, she answered. Usually if someone cries there's something wrong so you try to figure out what it is.

What is that? Commonsense? Or instinct? I thought a mother's response to her baby crying was instinctive. Does everything have to be spelt out?

She then said, When I'm older I should get a job inventing lame, pathetic excuses for people. I'd be really good at it. Better than that anyway.

Foster mother writes book about her dealings with CYF

Sean Plunket interviewed author Karen Scott this morning. RadioNZ has done likewise:
 

Child, Youth and Family's (CYF) fostering system is failing the children it is meant to be protecting, a foster mother has told Nine to Noon.
Karen Scott said she and her husband took in a five-year-old boy who had been removed from his father's care, and told Nine to Noon why after two years she felt she had no choice but to ask CYF to take him back.

She clearly loved this child but he had psychological problems (culminating?) in killing a family cat. That is not reported in the article on Radio NZ and I have not listened to their interview. But the woman seemed genuine, quite heartbroken in having to relinquish the child, and wracked with guilt about whether her actions had affected her own and husband's children.

When describing her experience with CYF she was not damning of individuals, just the system and processes they had to work with. Resolving small matters could take inordinate time (when the boy needed a haircut CYF were worried about cultural sensitivity). But important stuff, like trying to get professional help for the child, seemed impossible.

Sean said that there were times when reading the book he wasn't sure about his own response and that it is a hard read. But he applauded her bravery in writing the book.

(I note RadioNZ does not name the book which is called Another Mother's Love)

In 2011 Karen Scott and Mark Finlay and their six children opened their home and hearts to a sad, skinny five-year-old boy who was placed with them by New Zealand's Child, Youth and Family services. James arrived with nothing other than the clothes he was wearing, supposedly for just a short-term stay. But what followed were two turbulent years as Karen and Mark attempted to parent a very troubled young boy.
Another Mother's Love is a heart-wrenching account of a mother's attempt to nurture her foster child with unconditional love and kindness. However, is love enough? Karen and Mark faced a harrowing decision – to give up James or risk their family's future.

Listening I formed a mental picture of CYF putting a troubled child with new foster parents and hoping like hell that the new family and environment would work...multiplied across many, many more families.

Top heavy populations

NCPA reports about Social Security for retirees:

As baby boomers transition into retirement, the system will see serious strains. Within 15 years, the number of Americans reaching retirement age will increase by a staggering 70 percent, while the number of Americans of working age will increase by just 6 percent.

• In 1935, when the program started, 17 workers paid for the benefits of one retiree. By 2035, estimates indicate that just two workers will be paying for the benefits of a single retiree.
• The program is expected to run out of funds by 2038.

And this is the US, a country that shares fertility rates at or above replacement with NZ, reasonably rare amongst English-speaking countries. Many European and Asian nations are in more precarious positions.

Heads you lose, tails you lose

The Guardian reports on the predicted increase in domestic violence during the football World Cup:

The most detailed research into the links between the football World Cup and domestic abuse rates has revealed that in one force area in England and Wales, violent incidents increased by 38% when England lost – but also rose by 26% when they won.

The after match violence is predominantly male-perpetrated but not solely:

In the past few weeks, officers have drawn up a list of 117 high-risk and high-frequency perpetrators – 110 men and seven women – using intelligence drawn from domestic abuse data, risk assessments and football violence data.
The individuals will be visited at home by officers and warned not to vent their feelings on their partners. Essex police are also running a high-profile social media and advertising campaign – informed by interviews with victims of domestic abuse – to raise awareness of the crime's prevalence, highlight that victims can be male, female, gay or straight, and call on the public to stand together to fight it.

I recall attending a game at Old Trafford in the late 1980s and marvelling at the highly effective use of mounted horses to back into groups and disperse violent scuffles. Not much use in a small terrace house though.

The Scotsman: A "monstrous invasion of family life"

Extremism in Scotland.

Could it happen here?  Quite possibly. Never under-estimate the state's inclination to summon and impose seemingly easy solutions to difficult problems. Legislators have to justify their salaries.

OPPONENTS of controversial plans to introduce a “state guardian” for every child in Scotland will step up their campaign with a major conference next week.
MSPs, academics, social work experts and medics will gather in Edinburgh prior to a £30,000 court battle aimed at derailing the Scottish Government proposals.
Holyrood passed legislation this year which will mean every child in Scotland is given a designated “named person” – usually a health visitor or teacher – who will be a point of contact for families, but also monitor the child’s welfare and development.
The government insists that mothers and fathers are still, in most cases, the best people to raise their children and the new scheme will not change this when it is rolled out in August 2016.
However, many groups see the move as an intrusion into the traditional role of the family and say the Scottish Government has gone “too far”.
One described it as a “monstrous invasion of family life”.

The convenience of cannabis contradiction

While leader of the Mana Party is steadfastly opposed to tobacco and cannabis...

RACHEL Decriminalise marijuana you would oppose that.

HONE: That’s a personal position I've taken, it's not a position that Mana's taken, but it's a personal position I've taken. And I take it because I'm not one of those like liberals for whom that sort of thing is cool. I see how marijuana leads to dead eyes in some of the kids that we have to teach. I see how it leads to dead eyes in the families that I've gotta go and talk to because my wife who's a Principal makes me go and see some of these families. I see the problems, and so when people talk about decriminalisation at that level, I think to myself it's not actually one of the major priorities in my life.

...leader of the Internet Party, Laila Harre has announced that her preference is for decriminalisation.

That works well for them. They can individually promise to keep voters with a strong preference either way satisfied.  At least on intent. They can have their on-line policy debate and both sides win!

Upshot? No loss of votes for the Internet/Mana alliance. Quite probably some gain from previous NZALCP and Green voters.

Ah, the vagaries of political pragmatism.

The living wage effect and EMTRs

Two parking wardens who will receive $4 an hour extra under the Wellington City Council's adoption of a living wage each have a partner and a 4 month-old baby. Both say that they will be able to reduce their work hours due to the increase, and spend more time with their families. One from 75 hours down to 40 and the other from 50 down to 40.

That sounds nice. Though some might think, wouldn't you take the opportunity to earn the extra money with a young family to support?

Except there may not be any extra money. Both of these men will be receiving WFF and possibly an accommodation supplement. At the higher pay rate, if they work longer hours they may lose their other subsidies. In fact, they may be working for nothing. That doesn't make any sense.

What these two men may be is a prime example of is how high effective marginal tax rates reduce work effort.

But it also shows that their original wage (combined with state subsidies) was a livable =  living income.

Some of the support for the living wage was based on the assumption that government wouldn't have to subsidise workers to the extent they do now. In fact Bill English said:

The analysis shows that the “living wage” would least help low-income families whose welfare support would abate as their income rose. In those cases, the main beneficiary of the living wage would effectively be the Government because it would receive more in tax and pay out less through abated transfers.

Who picked that these struggling low wage families would simply reduce their hours?

On the upside, at least they are parking wardens.

Frank Macskasy responds

Frank Macskasy responds to my letter.

Couple of points Frank. I don't agree with corporate welfare but subsidies to the film industry and Rio Tinto don't reduce what is available for spending on the poor. They protect government revenue and jobs.

You complain about tax cuts, which "include Working for Families". WFF featured more than one increase to Family Support (now FTC) aimed at children of beneficiaries. In real terms FTC is now worth considerably more than in the early 1990s.

The fact that I disagree with your strategy for lifting the poor doesn't mean I disagree with the goal.

Support for the Greens carbon tax surprises

The Taxpayer's Union has come out in support of a carbon tax that is revenue neutral. On balance they find it preferable to the Emissions Trading Scheme.

I wonder why we need either.

The only answer (for believers in anthropogenic global warming) is that NZ can make a difference by once again leading the world; that we can and must save the planet; that the price we pay will be worth it when we write our country's name into the history books.  It's seductive for some.

And an unrealistic romantic notion for others.

NZ didn't lead the world when it introduced the Old Age Pension. And it barely led the world when giving women the vote (as a very young country NZ didn't face the inertia inherent in long-established parliamentary institutions but the suffragette activity was rife elsewhere). The 1938 Social Security Act happened around the same time as the Beveridge reforms in the UK and was pre-dated by the US Social Security Act of 1935. Recognition for Maori inclusion in mainstream legislative entitlements - and later, new benefits driven partially by Maori activism - occurred while awareness of civil rights grew in the US. Etc.

There is contagion between continents. Social, economic and now environmental issues beset and bother the developed world at pretty much the same time. They did a hundred years ago even without the immediacy of communication.

So kidding ourselves that Kiwis are going to once more set a precedent that cannot conscionably be ignored by countries emitting mega-multiplied emissions, is just pie in the sky.

More welfare changes on the way

The government has announced a rewrite of the Social Security 1964 Act, which is a massive maze of dated legislation.

I note that the cabinet minutes say:

- a rewrite of the Act would mean all aspects of the benefit system, including recent reforms, would be open for debate through the parliamentary process

- the rewrite [would] include consideration of policy change....[including] providing support for redirection of benefit payments and use of payment cards

An extension of 'income management' currently utilised for young beneficiaries was always on the cards. But there are other specific areas for reform including the way in which incomes are assessed against benefits.

There seems to be concern that the level of public interest will be high and that some of the proposals may contravene the Human Rights Act or the NZBOR. My reading of  this is a desire to provide more targeted assistance (or, indeed, method of support) over universal and that could raise issues of discrimination. But I am open to correction.

Proposals for policy changes are invited from the Minister to the Cabinet Social Policy Committee by the end of this year, with the new legislation introduced by December 2015.

Despite the press release claiming, "This work can’t be rushed," this is National pushing change along very quickly - par for the course over the first two terms.

Now all they need to do is get re-elected.

(After-thought. This presents ACT with a great opportunity to get some serious welfare reforms on the table.)

I only date boys...

Keeping Stock blogs about this example of Green merchandising:

Which got me imagining other party stickers:


Mana - I only date boys my Dad let's me

NZ First - I only date boys with hair like Winston Peters and their own Zimmer frame

Conservative - I only date boys sporting a chastity pledge

NZALCP - I only date boys with bongs

National - I only date boys with big bank accounts

ACT - I only date boys who know how may angels can dance on a pinhead

Labour - I only date boys


I'm sure you can do better.

Karl du Fresne on Big Government

 Writing in today's DomPost:

Big Government is now so all-pervasive that many people find it hard to imagine life without it.
That was evident from a recent minor party leaders' debate on TV3's The Nation, in which ACT leader Jamie Whyte was treated as some sort of freak or traitor for daring to suggest that New Zealanders don't need constant intervention from the state in every aspect of their lives. This is clearly a dangerous heresy.
Only days later, Whyte got a similar going-over from Guyon Espiner on Report. It seems we've all become so accustomed to the smothering influence of Big Government – even to the extent of deciding whether to have children – that we can't comprehend any alternative.
Whyte, of course, believes the state should get out of our lives, save for a few essential functions.
It's an idea worth exploring, but you get the impression that for a lot of people, it's just too scary.

Why Internet/Mana should be taken seriously

Internet/Mana's first big policy is free tertiary education.

The government already spends annually around $4 billion on tertiary education. But student loans to pay fees total just over a further $1 billion. It would be possible to fund 'free' tertiary education by pushing out the Super qualifying age.

What the Internet/Mana Party are going to do is set up an inter-generational fight. They will harness the feeling amongst the young that the baby-boomers had it good thanks to the state (plenty of truth in that) whereas they have to take on debt and then work to pay it off, as well as working to support the growing demands of the Super bill.

It's a clever but extremely divisive strategy. It isn't inspiration that will get young people out voting. It's anger.

And as much as I loathe the idea of Dotcom buying influence and manipulating politics the candidates can mount a strong case and campaign for the youth vote.

UPDATE

Just heard it direct from Harre. She was asked what their policy on raising the Super age is and she said that they would be looking very closely at the "trade off" between generational spending. Radio Live, just before 2pm.

Azalea

Here's one just finished. Oil on canvas. Zali is  Reona's granddaughter. She was playing in our garden late summer - at times throwing about a rugby ball with my 20 year-old son. One portrait alone couldn't capture her various expressions. So I painted four views on one canvas. She is life-size in each. Goes without saying but she's gorgeous.

Which principles does Sue Bradford have that Laila Harre doesn't?

Just wondering....

They are both hard left unionists; 'social justice' radicals; ex-MPs; former paid Green staffers and feminists.

But something significant clearly separates them.

Let's start using the word 'controversy'

Here's a great letter spotted in this morning's DomPost:

 

Compliments and gratitude to both Rex Benson and Bill Aitchison for caring enough to put some facts before the public.

Expect a real ratcheting up of the 'child poverty' CONTROVERSY - yes, let's start calling it that given so many "media and activists" misuse the data to further their own agendas - with a new book due for release in mid-June, and an election in September.

CYF staff stretched, seriously

MSD has just released a 135 page CYF Workload and 
Caseload review.  

The following pretty much sums it up:

When staff were asked what needed to change to make things better for social

workers, the number one answer was ‘more staff’

.

“....we are working with people and children and all of our decisions affect their lives forever.

It would be good to be able to have the time

and capacity to think, analyse and reflect rather than acting in the moment...”

There are currently 753 Care and Protection social workers. Without a reduction in the number of assessments it is recommended another 356 are required. 

CYF workers have my sympathy.

Taxing our way into prosperity?

A letter I wrote was published in the DomPost this morning -  but only half of it.

This is the entire letter:

Dear Editor

Silvio Famularo (May 24) wrote that benefits should be lifted because then poor people can spend more, increasing demand for goods and services, and creating more jobs.

To increase benefit expenditure the government would have to increase taxation. That means taking more money off people will in turn have less to spend on the same goods and services. Perhaps Silvio intended more tax on the wealthy or companies. But that will result in less support for high value commodities, less profit and less investment. Ultimately, fewer jobs.

Winston Churchill said, "We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle".

The ultimate call for compensation

Cut and paste in full from Samizdata. Only the exclamation mark led me to suspect it was....well read for yourself. Local substitutions could be made and the piece becomes entirely relevant to this country.

I demand reparations for the crimes committed against women by men!

Natalie Solent (Essex) · African affairs · North American affairs · Philosophical

My case to receive reparations is just as solid as the case for reparations to be paid to African-Americans by lesser-hyphenated-Americans.
Many members of a group to which I belong by accident of birth were enslaved by the group to which you belong by accident of birth (talking to you, heterogametic oppressors). Don’t waste my time with talk about how the law has given women equal legal status to men for generations now, because we are still poorer than you. Well some of us are poorer than some of you and some of us are richer than some of you, but let me tell you that even if I’m doing fine myself, the thought of people with bodies more like mine being on average poorer than people with bodies less like mine is a profound hurt that can only be assuaged by money.
No, the fact that you personally have never enslaved, beaten or otherwise oppressed a woman is not relevant. Can’t you see this thing is bigger than mere individual morality?
You can stop whingeing about how lots of men in history were oppressed quite as much as women were, or how people of both sexes were oppressed on many grounds other than gender, such as class, religion, nationality and race. I am quite aware of that already and join with all victim-groups in unbreakable solidarity, unless any of the oppressors included my ancestors such as to place me in a paying-out group, in which case the notion of paying reparations for the crimes of one’s ancestors is ridiculous. It is the present – a present in which many women are cruelly oppressed – not the past that matters! (Er, when it comes to us getting the money, that is. When it comes to deciding who pays the money, it’s the situation centuries ago that matters, obviously.)
Anyway, why should an artificial construct like “nationality” or “race” be the factor that determines who gets reparations? Gender, unlike race, can be determined objectively. Make gender the criterion and you will be troubled by very few of those pettifogging legalisms you get with race about how all the mixed ancestry people would have to pay reparations to themselves.
Cease your caterwauling about how your great-grandpa once put half a crown in a suffragette collection box. Obviously guilt can be inherited (by you) but the notion of heritable credit is contrary to reason.
None of your man-splainin’ nonsense about being partially descended from women, either. I’m certainly not going to let myself off from the solemn duty of identifying solely with my own gender just because some of my ancestors were men. See, if I can maintain decent standards of group segregation, so can you.
Do not presume to ask how many generations must go by before your group is to be permitted to cease its duty of unrequited toil (mediated via the tax collector and the Reparations Administration Agency) for the benefit of my group. Be assured that we will let you know when we no longer want your money. Until then, woe to that man by whom the offense cometh. That’s you, that is.

May 23rd, 2014 |

Metiria Turei: Govt "punishing" newborns

On Wednesday Green's co-leader Metiria Turei questioned John Key about the extra assistance for newborns in the budget. She wanted to know why the Parental Tax Credit wasn't being extended to children of beneficiary parents. In fact she asked for it to be immediately extended and the Prime Minister said, "No". Turei has now twisted this into:

"It’s bad enough to punish an adult for not having a job but to punish a newborn baby is a step too far," Mrs Turei said.

Adults are not punished for not having a job. They are supported by the benefit system. This country is amongst the most generous in the world in its means-tested but otherwise universal  social security coverage for the unemployed.

When a child is born to someone on a benefit they receive extra weekly financial assistance. That is the Family Tax Credit. It used to be called Family Support. Back in 19931 the maximum amount for the first child was $42 and additional children received $22 (with 16-18 year-olds receiving the higher of the two payments).

According to the Reserve Bank inflation calculator

A basket of goods and services
that cost $1.00
in quarter 4 of 1993
would have cost

$1.55

in quarter 1 of 2013

Total percentage change	54.8%
Number of years difference	19.25
Compound average annual rate	2.3%
Decline in purchasing power	35.4%
Index value for 1993 quarter 4 is	758.4
Index value for 2013 quarter 1 is	1174.0

OK. So if Family Support had been linked to inflation it would now be worth $64 for the first child, and $34 for additional children. In fact it is much higher.

Today it is $92 for the first, $157 for two, etc.


So newborns, regardless of their parent's source of income are well-supported by the government. They are not punished.

Metiria Turei's description of the situation of children of beneficiaries is deceitful. The Family Tax Credit was not increased in the budget because it would have been inconsistent with the philosophy of incentivising work.

1/ Social Developments, Tim Garlick, p146

Where is the National Candidate for Hutt South on cannabis decriminalisation today?

Chris Bishop has been selected as National's Hutt South candidate for the 2014 election. As it is my electorate and I would very much like to see it taken from Trevor Mallard I'm naturally interested in the prospects of this happening. As I was just corresponding with a friend about cannabis decriminalisation it occurred to me to see whether Mr Bishop has any stated views on the matter.

In 2003 (I am assuming this is the same Chris Bishop) he was Muriel Newman's representative in the Youth Parliament. A mock bill was drawn up regarding the partial decriminalisation of cannabis which the youth parliament debated and voted on. Chris Bishop is recorded as:

On the Right, Christopher Bishop, from Lower Hutt, saw the bill as increasing personal freedom.

And

Christopher Bishop, youth MP for Muriel Newman, argued "instant fines isn't the solution, we need a system that will control the cannabis market such as a regulation model."

Wonder where he stands 11 years on?

(National should be applauded for selecting some relatively young candidates this time around.)

"Poverty driving road deaths" - Dog and Lemon

The following thoughts are worthy of wider circulation. The fatalistic attitudes described don't just lead to road deaths. They lead to premature deaths from ill-health and other risk-taking behaviour:

“Poverty isn’t just a lack of money; it’s a lack of knowledge and a lack of understanding. Middle-class car drivers believe in cause and effect, so they buy safe cars and wear seatbelts. Many poor people see life as something that just happens to them, and that they can’t control. Therefore, to poor people, road accidents are simply bad luck, rather than bad management.”

“Worse, in many country areas, there’s no public transport, so the poor often drive illegal cars that won’t protect the occupants in a collision.”

“Among the poor, substance abuse is often considered normal, and if drink-driving causes an accident, it’s considered bad luck, not irresponsible, behaviour.”

“As far as the poorest of the poor are concerned, life is crap, but junk food, cigarettes and alcohol make it bearable. So when you tell these people not to smoke, drink and over-eat, what they hear is: ‘I want you stop enjoying life’. This is a crazy view, but that’s the way many poor people think.”

Sounds to me like he is describing  rural (and perhaps to a lesser degree urban) inter-generational welfare  dependency.

Smoking: relationship between smoking and deprivation

Hot off the press, the graph below shows the percentage of smokers in each deprivation area, 10 being the most deprived. The data is extracted from the Census 2013 and was released this month in the NZDep2013 Index of Deprivation

Figure3: Current smoking in 2013 by NZDep2013

The chicken and egg question poses itself. Do people smoke because they are deprived, or are they deprived because they smoke?

Stephen Berry standing for ACT

ACT has just announced Stephen Berry will be standing in the Upper Harbour electorate. That's good news. With Libertarianz no longer contesting electorally, I am delighted to see one of their past candidates joining up with ACT. Stephen is very committed to individual rights and small government. Hope he gets a decent list ranking.

Cost of smoking for the 'poor'

Yesterday I blogged, "Who can afford to smoke?"

To flesh out just how much cigarettes have risen in relation to incomes here are some numbers.

In 1974 - 40 years ago - a packet of Rothmans or Pall Mall cost 42 cents. I know because I used to buy them.

The people most likely to smoke today are Maori females. They also rely disproportionately on the DPB for their income. So let's peg 42 cents to the (basic) weekly DPB rate which, in 1974 was $26.85.

A packet of cigarettes cost someone on the DPB 1.5% of their weekly income.

Fast forward to 2014. The DPB (Sole Parent Support) rate is now $299.45 and a packet of cigarettes is $26.90 - now a whopping 9 percent of the beneficiary's (basic) weekly income.

If you are Maori and smoke, you'd have to be a masochist to vote for either the Maori or Mana Parties, both instrumental to the ongoing tax hikes and now, a 75% cut to the duty free allowance.

Who can afford to smoke?

A friend was under the weather and she asked me to pick up a few items from the local supermarket.  A couple of items were identified. "Are you sure there's nothing else," I asked?

"You wouldn't buy ciggies would you..."  reluctantly, a facet of the induced guilt smokers now carry. "Course I will." She'd told me the brand was either 'mild' or 'mellow'. As she was also describing her coffee choice, there was probably some confusion between the two.

I arrived at the counter of my local supermarket, a couple of other items in the basket, with a written description in hand. The ciggies reside in a solid cabinet. I said,  "I want two packets of Horizon mild or mellow, please."
"But we don't know which they are," was the response. "What colour is the packet?"
"I don't know, I replied. I'm buying them on behalf of. Which ever packet has the words mild or mellow on it I expect."
"But we can't open the cabinet to show you", they said, as the queue behind me grew. An awkward, absurd, impasse was reached.

"They are for my friend  --- ". Eureka. The magic password. They recognised her name. The non-visibility vault was opened and the cigarettes surrendered. As per usual I handed over my eftpost card and didn't even look at the receipt.

Today my reimbursement arrived in cash. When I opened the envelope I thought, surely there must have been a mistake. Immediately my stomach sank because I thought I had handed her a receipt that was in error because I hadn't checked it.

The receipt was also contained in the envelope though. It revealed two packs of the chosen ciggies were $53.80.

$53.80

My friend is a extremely talented professional with letters after her name to boot. But, by my observations, she probably has a two pack a day habit. That's nearly $20,000 a year.

It makes me furious. Hopping mad. This rapacious government, urged on by the  mealy-mouthed Maori- saving- Maori obsessive, is stealing from smokers way over and above what their average healthcare costs are. Way back the government was already taking enough to meet the health needs of tobacco users. Now it can only claim to be attempting to price them out of their personal choice for their own good.

My working friend will be paying income tax on top of her tobacco excise. A point will arrive one day when she is working just to smoke.

More fool her, you can say. BUT we now live in a country where non-smokers are protected from any secondhand effects, where smokers are paying for their health care three to four times over. It is her choice and her freedom to smoke if she wishes.

But what of those on  low incomes?

For some time I have put up the facts showing household income inequality is static- to- falling. But when the constantly increasing cost of smoking is accounted for, the poor probably are getting relatively poorer.

As I said it makes me very angry, and very upset for those people who are quite addicted. But above all, who CHOOSE to smoke. What business, at this point, is it of the state's?

Student loans a "welfare-state scam"

This is a new take on student loans, completely applicable to NZ:

From Jacob Hornberger:

The federal student loan program ranks among the biggest scams of the welfare-state way of life that modern-day Americans have embraced.
An article in the Washington Post entitled “College Debt Is Still Keeping Grads from Buying Homes,” points out that “young people are still drowning in student loans, and that debt is holding them back from reaching grown-up financial milestones, like buying a house, according to a new report Tuesday.”
Here is how the scam works.
Federal officials point to the student-loan program and declare, “Your parents can’t afford to send you to college. We can help you go to college by lending you the money. Without our help, you’ll have to live without a college degree.”
So, both students and parents think to themselves, “Oh, aren’t we lucky to be living with such a good and benevolent government? What would we do without it? We certainly couldn’t go to college without federal loans. Praise the government for lending us the money! Praise the troops for defending our freedom!”
But neither the parents nor the students ever ask why it is that the parents lack the money to pay for their children’s education. That’s because parents and students, thanks to public (i.e., government) schooling, have never learned how to engage in critical thinking. They just innocently accept whatever the authorities feed to them.
That’s why they don’t ask the critical question: Where does the federal government get the money to lend to the students?
The answer? They get it from the parents themselves!

More

Fairness analogy flawed

Academic Deborah Russell delivers a lecture in taxation fairness in today's Herald on Sunday. She argues for progressive tax as opposed to flat. She says she asks her students to suggest what a fair tax system would look like and then uses this analogy to prove her answer is the right one:

Think of it like this. Imagine three people wanting to look over a fence to see a parade: a short person, a middling person and a tall person. If we find a box of exactly the same size for each of them to stand on, then the short person still can't see over the fence, and the tall person has a great view. That's "fair" because we made sure each of them had the same size box — but the short person is left staring at the fence.
Then imagine if we gave two boxes to the short person, and the tall person just stood on the ground. Each person could see the parade because we made sure that we took their individual needs into account. That's being fair, too.
So which sort of fairness is best? Treating everyone exactly the same or treating people according to their needs? The right of politics prefers people to be treated the same. The left thinks we ought to take some account of individual needs so everyone can get a fair go.

I hope at least some of her students have the wits to point out that height is an accident of birth. I am myself the person who would need two boxes to see over the fence.

But in real life I've never be needy in terms of tax redistribution because before marriage I was almost constantly employed. After marriage we had children we could afford, didn't spend what we didn't have, and have stayed together.

Some degree of good fortune, maybe. But where people fall in the "individual needs" stakes is very much influenced by factors within their control. Unlike race, gender or ...  height.

Half a million children known to CYF?

This is an interesting statement contained in the budget announcement about extra funding for vulnerable children

“One per cent of children known to Child, Youth and Family – around 5,000 children –  go on to cost New Zealand $550,000 each by their early 30s in corrections and welfare services.

Half a million children are known to CYF?

Over what period I wonder.

According to an MSD research paper one in five born in 1993 became known to CYF over their childhood to the age of 17.

Cost of marginalising Labour

The $172 million extension of Paid Parental Leave, said to be electorally popular,  is one of the big-ticket items in today's budget. Based on Treasury advice, there was no case for the government to extend Paid Parental Leave (beyond buying votes and sidelining Labour.)

Here's what I wrote about it in December 2013:

...last year Treasury analysed who was using paid parental leave, labour market outcomes, and child health outcomes. It found that, "...there is not a strong evidence-based argument to support extending the length of paid parent leave."

Treasury's report states, "...the majority of mothers return to work when the baby is six months old...". Marginal benefits to labour market participation and child health and well-being would therefore be small. Additionally, it notes, "...the most vulnerable children are likely born into families where parents are not eligible for paid parental leave...".

In a discussion about improving income adequacy it found that the arguments are "weak" as "the current access group are likely to be middle and high income women with stable employment." Of the 32,000 paid parental leave recipients in 2011/12, 58 percent were earning over $40,000; 27 percent were earning over $60,000.

Treasury also noted a possible negative impact for employers, particularly small to medium enterprises, as their costs are, "...likely to be more significant as the length of parental leave increases." This could give rise to greater discrimination against child-bearing age females in the labour market.

A fine example of the irrational policies thrown up by redistributive democracies.

Australian welfare spending

Australia needed to cut their welfare spending.

Although government spending overall is a smaller proportion of GDP than New Zealand's, 41 percent goes on  Social Security and Welfare

In contrast New Zealand's Social Security and welfare spend makes up 32 percent of the total.

One of the measures Australia is taking is pushing up pension eligibility age to 70:

"Over the past 100 years, there has been little change in the Age Pension eligibility age; however, over the same period the average life expectancy has increased by 25 years to around 85 years."

A point I have been making about NZ Super for a long time.

When the first Old Age Pension was instituted in 1898 the qualifying age was 65. Today it is unchanged. In his 1997 work Reforming New Zealand Welfare, Michael Jones wrote,

“If the age of eligibility for New Zealand Superannuation was adjusted to equal average periods on the aged pension in 1900, the eligibility would now be 75 for men and 80 for women.”

Winston denial about horse ownership is not adding up

Winston Peter's name is still listed in the ownership of Bellazeel.

It was winning only 5 months ago but Winston says:

"I only had an interest for a short time, but it's been out to pasture for years." 

Bellazeel, a 5 year-old Zabeel mare, would be extremely valuable as a brood mare, especially with her 3 win record. Even if Peters relinquished his share I doubt it would be without return.

Update: Peters says he had a short term leased share in the horse purchased at a charity auction in 2008, which is when the horse would have been born. Seems odd to me because a horse isn't going to return anything until it is at least a 2YO. You'd want to be in for the long haul, particularly as a propsective broodmare.

Update 2: Stuff reports, " New Zealand Thoroughbred confirmed this afternoon that according to its records, Peters continued to part-own a racing lease on the horse"

Media bias

Not aided by an interviewer determined to make ACT's budget look bad, Jamie Whyte was eventually able to make some valuable points.

He told Espiner that to argue that people should be allowed to consume things without paying for them is a ridiculous argument.

If Whyte needs some training in how to handle hostile media Guyon would be the perfect person to provide it. Seems to be the go according to Karl du Fresne.

David Cunliffe and his sappy comments

On-line over on The Standard yesterday David Cunliffe made this comment:
 

Our priority is to get kids out of poverty – that’s why our Best Start payment includes the children of beneficiaries; they shouldn’t bear the brunt of their parents’ misfortune.

Misfortune? What does that mean? Bad luck? An accident?

When one in five babies is either born onto a benefit or arrives there shortly after, how much of an accident is it?

Obviously some children will have a temporarily unemployed parent. Or a parent who has been abandoned. I accept some parents may have suffered a degree of misfortune.

But when nearly 11,700 of the babies born last year were welfare dependent by the end of December, I can only conclude something beyond bad luck is the cause.

I don't want to 'beat-up' on parents on benefits, but if we don't understand the nature of the problem, how will we ever address it?

CPAG making false claims again

According to the NZ Herald:

University of Auckland senior lecturer and Child Poverty Action Group spokeswoman Susan St John said tax credits should be extended to beneficiary families and indexed to inflation.

"A lot of newborns get nothing - they get nothing from paid parental leave or tax credits. The most cost-effective way is to give all low-income children the same weekly assistance."

That's bull.

Family tax credit (FTC) is paid regardless of your source of income.

I read the above quote out to my husband. He accepted it. He said he didn't realise children on benefits got more than just their parent's benefit.

The Family Tax Credits, plus accommodation supplement (or income related rent), plus the basic benefit rate all add up to make welfare a viable option.

CPAG want to make is even more viable.
 

Income redistribution is great ... but not by government

The NZ Herald reports the Spirit Level authors are in New Zealand to lecture us about inequality, no doubt to boost the electoral chances of the left. Simon Collins writes:

But in New Zealand, the Labour Party is struggling to get inequality off the ground as an election issue. Professor Hazledine points to a 2006 survey of 32 countries which found New Zealanders were less supportive of redistributing income from the rich to the poor than people in any other nation.

The question asked was, "Do you think it should be the government's responsibility to reduce income differences between the rich and the poor?"

But I notice in Simon Collin's description of the finding he has ommitted  word 'government'. He talks about redistribution with the implicit assumption it's a  function of government. For the left 'income redistribution' and 'government' go hand in glove.

I am all for income redistribution. But not by the government. By unfettered exchange of goods and services and formation of family units that endure, and build wealth.

Government has made people poorer than they would have been through too much welfare, too much employment legislation, and too much taxation.

There must still be some sense of this amongst the population, reflected in NZ's position at the bottom of this table. Let's hope a similar or better response would occur in 2014.

A breath of fresh air

ACT's alternative budget is a desperately needed breath of fresh air:

This alternative budget highlights how far

National, Labour, The Greens and New Zealand

First have moved from sound economic policy.

These politicians peddle the self-aggrandizing

fantasy that if only they had a bigger role in the

economy, it would grow faster. If only they took

more of our money in taxation, spent it for us,

decided which businesses we should invest in,

who we should sell our products to, how we

should use our property, the terms on which we

may be employed and almost everything else,

then we would all be better off.

ACT is the only party that utterly rejects this

foolish and ugly idea.

For all seventeen pages go here.

One measure made me scratch my head. Abolishing the Ministry of Pacific Affairs. Only because there is no accompanying  abolition of Te Puni Kokiri, the Ministry of  Maori Affairs. Under Jamie Whyte ACT has indicated it wants to steer well clear of any perceived anti-Maori feeling. Fair enough. But this approach is hardly a principled, consistent rejection of publicly-funded ethnic collectivism.

Labour's attitude to other people's money

Labour MP Sue Moroney says:

“The select committee report shows the impact of the Bill would be just 0.05% of the crown funds being spent in this year's budget."

What is .05% of $72 billion?

I make 0.05% $36 million

Extending Paid Parental Leave to 6 months is calculated to cost $138 million according to Treasury.

Oh what's a mere $100 million.

Quote of the Day

What ... can the government do to help the poor? The only answer is the libertarian answer: Get out of the way.
 

– Murray N. Rothbard

(Hat-tip FFF)

The Labour government was tougher on the unemployed

A NZ Herald editorial this morning says:

The Government says it had briefly considered making it compulsory for beneficiaries to move to Christchurch when their skills and a job could be matched. Wisely, that was discounted....The compulsory uprooting of men and women and, conceivably, families in a manner such as this is clearly a step too far.

Why? Labour did it. Has everybody forgotten Jobs Jolt.

 

Jobs Jolt made people move to where the work was without a $3000 financial incentive.

2003:

The Government would pay the moving costs.
But it would not continue benefits forever for those refusing to shift.
The package would reinforce that those receiving the dole had clear obligations under the law to be available for work and to take reasonable steps to find a job.
Mr Maharey said the provisions available to suspend benefits would now be used more frequently.

Roy Morgan's unemployment rate confirms trend

National down (48.5 to 42.5%)  in today's Roy Morgan Poll - the one that is usually friendly to Labour. Pretty much a reversal of the last poll when National was up 5.5%.

Roy Morgan also surveys on the topic of unemployment. Their rate is always above the official rate. Their sample is smaller than Statistic NZ's and I suspect changes with every wave.

Their March quarter rate was 8% (compared to the HLFS rate of 6%) but most importantly the trend is the same. Reducing.

Baby or a job?

Labour policy: $3,000 to have a baby

National policy: $3,000 to get a job

Good on the government

The plan to pay $3,000 to beneficiaries who move to Christchurch to take up a job is another positive incentive aimed particularly at young people. It's another positive incentive (funding someone into work) rather than an negative one (funding someone into parenthood). And I could hardly find fault after supporting Duncan Garner's sentiments back in March when the DomPost published this letter:

Duncan Garner has a point about the dichotomy between high labour needs in Christchurch and the 67,000 young Kiwis not in training, education or work. While only 40 percent of those are actually on the "dole" that number is still unnecessarily high. The government has put some effort into getting locally unemployed into jobs, but there are still around 1,600 benefit-dependent unemployed 18-24 year-olds in Canterbury alone.
Perhaps the problem is skills are required now and apprenticeships divert qualified tradesmen away from the job at hand? But I agree with Garner. There appears to be a golden opportunity going begging. The same can be said about job opportunities the needs of our ageing population will present; more residential carers, in-home carers, various health workers, home maintenance providers, etc. While the government funds much of this, it makes total sense to be diverting dole money into training for these roles. How hard can it be?
The answer must be 'very'. It's easier to import able and willing workers and hope their productivity and taxes will support the unemployable.

So good on the government for this initiative.

Labour's response is weak. Very. From Ruth Dyson:

“Where are these people, coming into the region to take up paid work, going to live?  There is an increasing shortage of affordable rental properties, more people moving in from overseas to take up work, and more Cantabrians moving out of their homes for repairs or rebuild.
“ There is just nowhere for these new people that the Prime Minister is paying to come to Canterbury, to live. That is a recipe for disaster."

Up to 1,000 young people present much less of an accommodation problem than the non-beneficiary inflow already occurring. They present an opportunity as boarders and flatmates. More negativity from Labour for the sake of it.

Govt goes into competition with loan sharks

Just one of three already announced pre-budget MSD initiatives:

Social Development Minister Paula Bennett announced today a new community finance partnership that will see interest free and low interest loans made available to New Zealanders who need them.
The Government is partnering with Bank of New Zealand, Good Shepherd NZ and The Salvation Army to develop a finance initiative that will offer people on low incomes affordable and sustainable credit. Good Shepherd will bring many years of delivering community finance programmes in Australia to the table.
“People on low incomes are vulnerable in their credit options with many tempted by easy finance. The initiative will see sustainable loans available for some people that might not otherwise be able to service a loan with high interest rates and hidden fees,” says Mrs Bennett.
Beginning with a one-year pilot, BNZ is committing $10 million to the initiative for up to five years that provides a real alternative to loan sharks and pay day lenders.

Hard to comment without detail beyond the obvious observation of more subsidy. In terms of moral hazard, not the worst sort of subsidy though.

And they can claim to be promoting choice...

There's a chance the expenditure might be budget neutral. When beneficiaries get into financial trouble the state ultimately wears it (or shares it) even if paltry repayments are deducted from benefits.

Not a good result for MSD

Principals are not particularly impressed by attendance service providers or CYF support:

69 percent said CYF were 'not useful' or of 'mixed use' and 77 percent thought the new attendance service providers were not useful or of mixed use.

Dealing with truants and dysafunctional kids is probably a thankless task much of the time. But I shouldn't think MSD will be very happy with these survey results. You would hope this data is identifiable by school and can be used to assess which service providers/ CYF agencies are getting it right and which aren't.