Tax evasion does not, of course, whatever Ritchie says, cost the world anything. We are still a closed system. That less money goes to governments does not mean that that money ceases to exist. It still gets spent or invested somewhere or other. Indeed, dependent upon what happens to that money, and how badly the government that didn’t get it would have spent it, tax evasion could, conceivably, result in an improvement in the human condition. But even leaving aside such an extreme (for example, someone takes the loot from tax evasion and invests it in a malaria vaccine, as opposed to the British Government which would have used £10 billion to build an NHS computer system that does nothing at all) it’s still true that tax evasion does not mean a loss for the world. Only a different distribution of the cash.Hat-tip Samizdata
- Tim Worstall
Thursday, December 19, 2013
Quote of the Day
Wednesday, December 18, 2013
What is the Brown phenomenon?
The national conversation that is Mayor Len Brown just keeps on keeping on. I like to listen to talkback while I paint and haven't been able to avoid it. But why haven't people lost interest yet? Surely that's what Brown was counting on?
That answer interests me more than the fiasco. When morals get involved, and those morals apply to both personal and public actions, to infidelity and financial accountability, the conversation intensifies. It's no longer just Brown we are angry at. It's the last idiot caller who thinks it's OK for men to cheat on their wives. Or the last moron who said Len's corruption extends to aiding and abetting money laundering at Sky City.
The conversation has actually become a self-stocktake about what we will tolerate in our own families. Where we draw the line between what we expect from ourselves and what we expect from leaders. Something that's surprised me is the number of older women in their 70s and 80s who indicate tacit approval for the Mayor's indiscretion. Everybody gets up to it apparently. Which tells me something about my mother's generation that I perhaps didn't want to know. Not the bit-on-the-side habit. That goes on. But the turn-a-blind-eye habit.
So our reactions to the Brown Affair become something else. They divide us.That's why the whole country has become involved. It's not just Aucklanders who want an outcome.
There's also a discernible mood shift going on this country. And it's bad timing for Len. It's a backlash against the liberality of my generation. But it's also coming from my generation. Plenty of us behaved immorally. I did. But I grew out of it. We want our contemporaries to do the same. For a man in the position that Len Brown has achieved, the mana, the power, the pay, the great uniting leader, his judgement has been found badly wanting. He's behaved like a fool. Not just on the spur of the moment, not in a one-off uncharacteristic succumbing to temptation.
Brown is less than mere mortal. He can't command respect,can't honestly earn his salary, and can't expect Auckland ratepayers to accept that.
That answer interests me more than the fiasco. When morals get involved, and those morals apply to both personal and public actions, to infidelity and financial accountability, the conversation intensifies. It's no longer just Brown we are angry at. It's the last idiot caller who thinks it's OK for men to cheat on their wives. Or the last moron who said Len's corruption extends to aiding and abetting money laundering at Sky City.
The conversation has actually become a self-stocktake about what we will tolerate in our own families. Where we draw the line between what we expect from ourselves and what we expect from leaders. Something that's surprised me is the number of older women in their 70s and 80s who indicate tacit approval for the Mayor's indiscretion. Everybody gets up to it apparently. Which tells me something about my mother's generation that I perhaps didn't want to know. Not the bit-on-the-side habit. That goes on. But the turn-a-blind-eye habit.
So our reactions to the Brown Affair become something else. They divide us.That's why the whole country has become involved. It's not just Aucklanders who want an outcome.
There's also a discernible mood shift going on this country. And it's bad timing for Len. It's a backlash against the liberality of my generation. But it's also coming from my generation. Plenty of us behaved immorally. I did. But I grew out of it. We want our contemporaries to do the same. For a man in the position that Len Brown has achieved, the mana, the power, the pay, the great uniting leader, his judgement has been found badly wanting. He's behaved like a fool. Not just on the spur of the moment, not in a one-off uncharacteristic succumbing to temptation.
Brown is less than mere mortal. He can't command respect,can't honestly earn his salary, and can't expect Auckland ratepayers to accept that.
Auckland outsmarts Wellington
Auckland may have a widely acknowledged lame duck Mayor, but it still has some smart councillors. Wallace Chapman, on RadioLive yesterday, was running a weak defence line that there's no-one better to take over from Len Brown. What about Sir John Walker?:
The Living Wage policy should be shelved, southern councillors say.
Wellington City Council decided last week to pay all its staff a minimum wage of $18.40 per hour, prompting Auckland councillor Sir John Walker to raise the issue at last week's meeting of the Papakura Local Board.
The living wage is defined as the amount for workers to be able to live while also participating in society, calculated at $18.40 per hour.
Paying a living wage to Auckland Council staff would cost an estimated $3.5 million each year, Sir John says. That doesn't sound like much but it is a lot of money, the Manurewa-Papakura ward councillor says.
The "contentious" issue is "Len Brown's little baby", Sir John says.
"I totally disagree with it. If you're going to earn money, you earn it. You're given it by your productivity."
The change would also be "unfair" to other people who already earn $18.40 per hour.
He believes investment should be aimed at getting people to learn skills and achieve higher qualifications so they can earn more.
Sir John's co-councillor Calum Penrose also opposes introducing a living wage at Auckland Council.
The issue is not one local government should be focusing on as "it is a central government issue", he says.
"Our core services are roads, rates, rubbish, footpaths, berms, parks, reserves . . . they're the stuff that affects people."
Franklin ward councillor Bill Cashmore, who also attended the meeting, says Finance Minister Bill English will be the only winner if the living wage is introduced.
Any gains would likely be offset by increased taxes and the loss of government support and benefits, making the move "pointless", he says.
Tuesday, December 17, 2013
Another candidate for Upper Harbour
Michael Kidd says he will seek the Labour Party nomination to stand against Paula Bennett and Christine Rankin in the Upper Harbour electorate. Apparently,
Sanctions - not often - have been imposed on people who fail to do things like keep a WINZ appointment. If sanctions are applied to parents they are limited to 50 percent. Unlike the 100 percent possible under Labour.
Is Kidd going to argue for a return to that regime?
The 'cuts' to the Training Incentive Allowance meant that mature students studying at a higher level couldn't continue to access unconditional welfare. But the savings were targeted at supporting younger, tertiary students. That's in keeping with National's focus on keeping young people out of the benefit system or limiting their reliance.
Is Kidd going to argue for perennial students to be supported by the taxpayer?
Sole parents can't stay indefinitely on welfare by adding children to an existing benefit. Their entitlement to do so has been 'cut'.
Is Kidd going to argue the taxpayer should fund unlimited children born onto a benefit?
While I thought Colin Craig describing the Bennett/ Rankin clash as a cat fight was injudicious, Kidd will most certainly be walking into a big cat's den.
He will stand on a policy of restoring the cuts in welfare by the National Government which have negatively impacted on the most vulnerable.What cuts?
Sanctions - not often - have been imposed on people who fail to do things like keep a WINZ appointment. If sanctions are applied to parents they are limited to 50 percent. Unlike the 100 percent possible under Labour.
Is Kidd going to argue for a return to that regime?
The 'cuts' to the Training Incentive Allowance meant that mature students studying at a higher level couldn't continue to access unconditional welfare. But the savings were targeted at supporting younger, tertiary students. That's in keeping with National's focus on keeping young people out of the benefit system or limiting their reliance.
Is Kidd going to argue for perennial students to be supported by the taxpayer?
Sole parents can't stay indefinitely on welfare by adding children to an existing benefit. Their entitlement to do so has been 'cut'.
Is Kidd going to argue the taxpayer should fund unlimited children born onto a benefit?
While I thought Colin Craig describing the Bennett/ Rankin clash as a cat fight was injudicious, Kidd will most certainly be walking into a big cat's den.
Sentencing inconsistency - same day, same Judge
Are these two women sharing a sentence?
They each received 8 years and 8 months for beating a man to death.
It seems incredibly light especially when another man sentenced for murder received life with minimum parole period of 15 years.
And they were both sentenced by the same Justice on the same day.
They each received 8 years and 8 months for beating a man to death.
It seems incredibly light especially when another man sentenced for murder received life with minimum parole period of 15 years.
And they were both sentenced by the same Justice on the same day.
Monday, December 16, 2013
NZCCSS report - bullshit
My impatience is precluding politeness.
The leftist New Zealand Council of Christian Social Services Vulnerability Report, released today, is a regular update comprising publicly available data.
Some of the statistics they report are thoroughly misunderstood.
But I begin with this patently false statement:
Census 2013 data shows,
Any reader of the report unfamiliar with NZ would believe "the vast majority of New Zealanders" rented.
Next I'm confronted with their inability to grasp benefit data.
For starters, given 43 percent of DPB recipients at June 2013 were Maori, it'd be highly surprising if the DPB reflects "typical child rearing patterns".
At least a third of DPB recipients have been on benefit since becoming teenage mothers. That hardly reflects "typical child rearing patterns" when the average age of first time mothers in NZ is 30.
Back to the report:
When the NZ Council of Christian Social Services puts in the time to really get to grips with the issues I'll start respecting them.
Update.Further credentials proving economic illiteracy, a 2011 press release reported on this blog:
Celebrate Beneficiaries - The Heroes of the Recession
It is the government who is making bad life choices, not beneficiaries! In fact, Trevor McGlinchey from the NZ Council of Christian Social Services (NZCCSS) says beneficiaries are the heroes who are carrying the country through the recession.
NZCCSS Executive officer McGlinchey was speaking in response to today’s release of the third and final report from the government Welfare Working Group Report.
...“Last year’s Budget offered millions in tax assistance to those on mid to high incomes, many of whom pay relatively minimal tax because they know how to work the system. That leaves low income earners and beneficiaries to pay off the nation’s debts!”
The leftist New Zealand Council of Christian Social Services Vulnerability Report, released today, is a regular update comprising publicly available data.
Some of the statistics they report are thoroughly misunderstood.
But I begin with this patently false statement:
Home ownership remains elusive for the vast majority of New Zealanders.(Page 4)
Census 2013 data shows,
In 2013, 64.8 percent of households owned their home or held it in a family trust, down from 66.9 percent in 2006.Source
Any reader of the report unfamiliar with NZ would believe "the vast majority of New Zealanders" rented.
Next I'm confronted with their inability to grasp benefit data.
The June 2013 DPB data reflects typical child rearing patterns - Recipients are mostly mature women (aged 25-39 years) at home caring for their child (or children) until they attend school at 5 years.
For starters, given 43 percent of DPB recipients at June 2013 were Maori, it'd be highly surprising if the DPB reflects "typical child rearing patterns".
At least a third of DPB recipients have been on benefit since becoming teenage mothers. That hardly reflects "typical child rearing patterns" when the average age of first time mothers in NZ is 30.
Back to the report:
Only a small percentage [10%] of recipients receive a DPB for ten years or more.
Square that with Paula Bennett's statement earlier this year:
...sole parents spend an average 15.8 years on benefit ...
When the NZ Council of Christian Social Services puts in the time to really get to grips with the issues I'll start respecting them.
Update.Further credentials proving economic illiteracy, a 2011 press release reported on this blog:
Celebrate Beneficiaries - The Heroes of the Recession
It is the government who is making bad life choices, not beneficiaries! In fact, Trevor McGlinchey from the NZ Council of Christian Social Services (NZCCSS) says beneficiaries are the heroes who are carrying the country through the recession.
NZCCSS Executive officer McGlinchey was speaking in response to today’s release of the third and final report from the government Welfare Working Group Report.
...“Last year’s Budget offered millions in tax assistance to those on mid to high incomes, many of whom pay relatively minimal tax because they know how to work the system. That leaves low income earners and beneficiaries to pay off the nation’s debts!”
Prue Hyman on the living wage
Regarding the living wage, there is one very persuasive argument for it. The employer pays more of the cost of labour instead of the taxpayer via subsidies like the accommodation supplement, family tax credit, partial welfare benefits etc.
Prue Hyman, who has heavily promoted a universal basic income in the past, has a piece in the DomPost today which employs the argument:
But if the employer is the council, and the increased wages are funded from increased rates, then the result is simply more transfer of wealth from Peter to Paul (and probably back again if, for instance, landlords raise rents as a result.) The pie hasn't grown. The size of the pieces may change slightly or even stay the same.
And while Hyman says the government would be the biggest winner from increased tax take, does anybody expect to see a corresponding tax cut?
Prue Hyman, who has heavily promoted a universal basic income in the past, has a piece in the DomPost today which employs the argument:
The Treasury calculates that for a two-child family with two parents (one working 40 hours at $16 an hour and one 20 hours at $13.75), a living wage would increase take-home pay by $63 a week.Well, yes. If the employer can absorb the increased wage bill without shedding jobs and if the employer is a private profit maker.
The government would be a bigger winner, with an additional $126 per week in increased tax and reduced benefits. But any increase in annual pay for such families is positive and $3276 is significant. Also, putting more responsibility on employers to pay a living wage allows the government to refocus spending, targeting the neediest and largest low-income families more effectively.
Further, with lower income families spending almost all their income, there will be a boost to the local Wellington economy which will itself create more jobs.
The Treasury's report argues that "adopting a living wage would rebalance the role of the employer and the welfare system towards work being the primary mechanism for people to support themselves." Isn't this a positive?
But if the employer is the council, and the increased wages are funded from increased rates, then the result is simply more transfer of wealth from Peter to Paul (and probably back again if, for instance, landlords raise rents as a result.) The pie hasn't grown. The size of the pieces may change slightly or even stay the same.
And while Hyman says the government would be the biggest winner from increased tax take, does anybody expect to see a corresponding tax cut?
Sunday, December 15, 2013
Craig relishes "catfight"
For a conservative, Colin Craig often surprises - and not in a good way. He describes pitting Christine Rankin against Paula Bennett in the newly created Upper Harbour seat as setting up a "catfight".
Not an overly sensitive petal myself, I nevertheless think the use of the term was injudicious. It's makes the pair sound like a couple of slappers. Which neither are.
For arguments sake, if ACT leader Rodney Hide has said in 2008, my standing against Sue Bradford wherever would set up a real catfight I'd have been mortified. Ah but that's why I am so unsuited to politics.Not enough mongrel - or feral - in me. (And before I cause offence it's not the sort of thing Rodney would do).
I'd love to see Christine Rankin take on Paula Bennett. In the welfare area, Bennett's portfolio and Rankin's passion, much that National has done would meet with Conservative approval. So Rankin will have to find strong points of detraction, ie the reforms have not gone nearly far enough.
Then again if the Conservatives take the line that a mother's place is in the home they might say that the reforms have gone too far. Whatever the angle, the contest would put welfare in the spotlight.
It's rather an odd strategy though to pit your best known candidate against a National Party favourite. But I forget the party vote. Voters may favour both of these candidates if they put up a spirited debate, and split their vote accordingly.
Anyway, back to the unfortunate turn of phrase. Don't be surprised if the feminists get their hooks into Craig over this faux pas.
Catfight (also Girl fight) is a term for an altercation between two women, often characterized as involving scratching, slapping, hair-pulling, and shirt-shredding.
Not an overly sensitive petal myself, I nevertheless think the use of the term was injudicious. It's makes the pair sound like a couple of slappers. Which neither are.
For arguments sake, if ACT leader Rodney Hide has said in 2008, my standing against Sue Bradford wherever would set up a real catfight I'd have been mortified. Ah but that's why I am so unsuited to politics.Not enough mongrel - or feral - in me. (And before I cause offence it's not the sort of thing Rodney would do).
I'd love to see Christine Rankin take on Paula Bennett. In the welfare area, Bennett's portfolio and Rankin's passion, much that National has done would meet with Conservative approval. So Rankin will have to find strong points of detraction, ie the reforms have not gone nearly far enough.
Then again if the Conservatives take the line that a mother's place is in the home they might say that the reforms have gone too far. Whatever the angle, the contest would put welfare in the spotlight.
It's rather an odd strategy though to pit your best known candidate against a National Party favourite. But I forget the party vote. Voters may favour both of these candidates if they put up a spirited debate, and split their vote accordingly.
Anyway, back to the unfortunate turn of phrase. Don't be surprised if the feminists get their hooks into Craig over this faux pas.
Friday, December 13, 2013
CIR Asset sales referendum result
A third say YES.
Good result.
Probably reasonably representative.
A minority of National voters didn't want the sales.
Nothing to see here.
Waste of time and money.
Preliminary Results of Citizens Initiated Referendum
Media releases
The Electoral Commission has released the preliminary result of the Citizens Initiated Referendum on the question “Do
you support the Government selling up to 49% of Meridian Energy, Mighty
River Power, Genesis Power, Solid Energy and Air New Zealand?”
2013 Citizens Initiated Referendum Preliminary Result
Votes
|
Number of Votes Received
|
Percentage of Total Valid Votes
|
|---|---|---|
For the response
Yes
|
432,950
|
32.5%
|
For the response
No
|
895,322
|
67.2%
|
Informal votes*
|
4068
|
0.31%
|
Total valid votes
|
1,332,340
|
100.0%
|
RNZ panel discussion about poverty
Radio NZ invited me to participate in Jim Mora's panel discussion on poverty today. I would have loved to address David's Slack's lead-in comments about "intelligent redistribution" and the American experience but that would have used up too much limited time. Starts at 11:00.
"The politics of empirical truths"
This piece, by Peter Saunders, resonated with me and probably will with you:
The politics of empirical truths
In a lecture delivered at Munich University in 1918, the great German sociologist, Max Weber, outlined the qualities
required by anyone considering a career in politics. He ended with this
warning: 'Only he has the calling for politics who is sure that he
shall not crumble when the world from his point of view is too stupid or
too base for what he wants to offer.'
That counts me out, then.
Having spent the last 14
years working for public policy think tanks in Australia and Britain, I
have become increasingly frustrated by the 'stupidity and baseness' of
politicians who refuse to acknowledge awkward empirical truths. Even
when, occasionally, a politician summons up the courage to tell people
facts they would rather not hear, he or she immediately comes under
pressure to withdraw their comment, and even apologise for it.
Rod Liddle recently offered one example in the UK edition of The Spectator.
He highlighted an apology issued by the Attorney General, Dominic
Grieve, who had warned of a culture of 'endemic corruption' in certain
Asian countries (notably Pakistan) from which many British ethnic
minorities originate. As Liddle showed, Grieve's warning was fully
justified, for Pakistan is one of the most corrupt countries in the
world, and the UK Electoral Commission has expressed concern about
bribery and vote-buying in certain Pakistani communities in Britain. But
although he was right, Grieve issued a grovelling apology.
This problem of thought
crime and self-censorship is not limited to issues of race and
ethnicity. It extends to discussion of gender and class differences too.
Last week, for example, a
UKIP Member of the European Parliament, Stuart Agnew, was censured by
his own party after claiming that men outnumber women in top jobs partly
because many women choose child-rearing over career building. But he
was right. A 2009 survey found only 12% of British mothers want to work
full-time, and a 2008 report found two-thirds of working mums would
still want to reduce their hours even if improved child care were made
available. In Norway, where mothers can choose between free child care
(if they continue working) or cash payments in lieu (if they raise their
children at home), four-fifths choose to stay home.
Again last week, the
Mayor of London, Boris Johnson, landed in hot water for pointing out
that one reason upward social mobility is not more extensive is that
some people lack the intelligence needed to perform high-level jobs.
Again, he's right - this is something I have been documenting for the last 20 years,
and Boris is the first prominent politician in all that time to
acknowledge it. But in politics, evidence is often irrelevant. Deputy
Prime Minister,
Nick Clegg, attacked
Boris for his 'unpleasant, careless elitism,' Cameron hastily distanced
himself from him, and the BBC and newspaper journalists declared open
season on him for several days afterwards.
Max Weber wouldn't have
been surprised by any of this. He taught that political leadership is
about charisma, the mobilisation of emotion among your followers.
Evidence can be left to faceless bureaucrats. Populist leaders in search
of votes work on sentiment.
If like the CIS, you are
in the business of shifting policy agendas through appeal to evidence
and reason, this emphasis on emotion and sentiment can represent a major
frustration. But as Weber concluded in his Munich lecture: 'Only he who
in the face of all this can say 'In spite of all!' has the calling for
politics.'
Peter Saunders is a Senior Fellow at The Centre for Independent Studies.
|
Thursday, December 12, 2013
Paid parental leave extension unwarranted
Media Release
PAID PARENTAL LEAVE EXTENSION UNWARRANTED
Thursday, December 12, 2013
The government is reportedly reconsidering its opposition to extending Paid Parental Leave from 14 to 26 weeks. This comes despite Treasury advice that there would be "minimal benefit from increasing the length of parental leave."
Welfare commentator Lindsay Mitchell said 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.
The implementation of 26 weeks Paid Parental Leave will cost $327 million by 2015/16. Unchanged, the cost would be $176 million in 2015/16. An annual increased expenditure of $151 million for "minimal benefit" seems highly questionable. The benefit to the government may lie in gaining electoral favour in 2014.
PAID PARENTAL LEAVE EXTENSION UNWARRANTED
Thursday, December 12, 2013
The government is reportedly reconsidering its opposition to extending Paid Parental Leave from 14 to 26 weeks. This comes despite Treasury advice that there would be "minimal benefit from increasing the length of parental leave."
Welfare commentator Lindsay Mitchell said 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.
The implementation of 26 weeks Paid Parental Leave will cost $327 million by 2015/16. Unchanged, the cost would be $176 million in 2015/16. An annual increased expenditure of $151 million for "minimal benefit" seems highly questionable. The benefit to the government may lie in gaining electoral favour in 2014.
Wednesday, December 11, 2013
The Nats buy votes too
The government now appears to be entertaining Labour MP Sue Moroney's Bill to extend Paid Parental Leave from 14 to 26 weeks.
In a nutshell, most parents with newborns already stay off work for 6 months. They fund the difference themselves. That's because they can afford to.
If Bill English approves this it's a middle-class handout. A vote-buyer. Nothing more, nothing less.
Opinion polls have shown strong support for extending paid parental leave.
In a nutshell, most parents with newborns already stay off work for 6 months. They fund the difference themselves. That's because they can afford to.
If Bill English approves this it's a middle-class handout. A vote-buyer. Nothing more, nothing less.
Tuesday, December 10, 2013
Jacinda Ardern and red herrings
Labour's Jacinda Ardern to Paula Bennett in parliament today:
1/ Clearly they are surviving.
2/ Being pedantic, around 6 percent of children 'living in poverty' have parents who receive income from benefits and work. 34 percent receive incomes from work alone. But even they are getting more in tax credits etc than they are paying in tax. The government is already addressing low wage rates.
3/ This is the important point.
The 265,000 children (living in households receiving less than 60 percent of the equivalised median household income after housing costs) are not all experiencing hardship (as measured by the Living Standards survey.)
That's because the income data is derived from a sample survey of 3,500 declaring their annual income.
Some families experience a year of low income for a variety of reasons. Unemployment, fewer contracts, a new business start-up, illness, accident, relationship break-up etc. BUT they do have savings and assets to draw on. That is partly why less than half of the 265,000 children 'living in poverty' are actually experiencing hardship.
Ardern's question is designed to shift attention from beneficiary families to working families. But children in working families will (generally) only experience transitory or temporary 'poverty'. They are not affected in the lifelong way that children who spend most of their childhoods in beneficiary families are.
Jacinda Ardern: What will her Government do to address low wage rates in New Zealand, given that 40 percent of the children living in poverty are being cared for by adults in paid work but who are still not earning enough to survive?
1/ Clearly they are surviving.
2/ Being pedantic, around 6 percent of children 'living in poverty' have parents who receive income from benefits and work. 34 percent receive incomes from work alone. But even they are getting more in tax credits etc than they are paying in tax. The government is already addressing low wage rates.
3/ This is the important point.
The 265,000 children (living in households receiving less than 60 percent of the equivalised median household income after housing costs) are not all experiencing hardship (as measured by the Living Standards survey.)
That's because the income data is derived from a sample survey of 3,500 declaring their annual income.
Some families experience a year of low income for a variety of reasons. Unemployment, fewer contracts, a new business start-up, illness, accident, relationship break-up etc. BUT they do have savings and assets to draw on. That is partly why less than half of the 265,000 children 'living in poverty' are actually experiencing hardship.
Ardern's question is designed to shift attention from beneficiary families to working families. But children in working families will (generally) only experience transitory or temporary 'poverty'. They are not affected in the lifelong way that children who spend most of their childhoods in beneficiary families are.
Monday, December 09, 2013
Talking Child Poverty on Newstalk ZB
On NewstalkZB earlier this evening talking to Tim Dower about the latest Child Poverty report.
One of the e-mails that Tim read out later was, he said, representative of "a developing theme". It said,
I didn't support the line that there is no poverty. I've seen kids in houses where they get sick because of crowding and unhealthy, unhygienic surroundings. Probably the same house has Sky. But the chronic poverty of benefit dependence exists. It's spirit and soul sapping.
One of the e-mails that Tim read out later was, he said, representative of "a developing theme". It said,
"I assume extreme poverty is being able to afford Sky Sport but not Sky Movies."
I didn't support the line that there is no poverty. I've seen kids in houses where they get sick because of crowding and unhealthy, unhygienic surroundings. Probably the same house has Sky. But the chronic poverty of benefit dependence exists. It's spirit and soul sapping.
Children's Commissioner Child Poverty Report
Some of the data from the forthcoming report is depicted at this site.
This is their graph for the trend.
Another graphic shows that 51% of the children in poverty live in single parent families.
Here's a graph showing the number of single parents families over a similar period.
Again, the subsidisation of single parent families has been a major contributor to the growth in the numbers of children living in poverty.
And the best answer the Children's Commissioner can come up with is more subsidisation.
Another graphic shows that 51% of the children in poverty live in single parent families.
Here's a graph showing the number of single parents families over a similar period.
Again, the subsidisation of single parent families has been a major contributor to the growth in the numbers of children living in poverty.
And the best answer the Children's Commissioner can come up with is more subsidisation.
An unrepresented constituency?
A NZ Herald editorial begins,
So the constiuency that "will always be", which I believe is bigger than ACT's best result would indicate, will essentially go unrepresented in parliament?
I hope not.
There will always be a constituency for the Act Party's founding principles of individual freedom, personal responsibility, small government and lower taxes.It does my heart good to see those principles re-stated. Unfortunately the writer goes on to enumerate the many problems that have faced the party over the years and concludes a come-back is unlikely.
So the constiuency that "will always be", which I believe is bigger than ACT's best result would indicate, will essentially go unrepresented in parliament?
I hope not.
Sunday, December 08, 2013
"Blaming parents is pointless"
The Children's Commissioner is about to publish an apparently "shocking" report about the increasing number of admissions to hospital for "poverty-related illnesses". The Herald on Sunday editorialises,
A few weeks back I wrote something about this question. It was published on Breaking Views so apologies if you have already seen it.
Without doubt one of next year's major election issues will be child poverty. Most of the voices heard on this issue, including the Children's Commissioner, blame the problem on inadequate wealth redistribution. Either wages or benefits are too low. Child poverty is therefore a product of the collective economic system and solving it becomes the responsibility of government.
I disagree. We are commonly told that approximately 270,000 children live in homes with incomes that fall below 60 percent of the median household income. Less focus goes on who these children are and why their parents are poor.
Around two thirds live in benefit-dependent homes; of those, around three quarters live with a sole parent. Yes, there are poor children with working parents but the poverty they experience tends to be temporary versus chronic. Their parents may experience short-term unemployment, or fewer working hours, especially during a recession but poverty is not entrenched. This scenario is quite different to that experienced by children who are born onto a benefit and spend much of their childhood there.
More than one in five children in New Zealand will be dependent on a benefit by the end of their birth year. The percentage improves only slightly in good economic times and worsens during bad. Because of the rapidity of the recourse to welfare it can be no surprise to most of their parents that their child would be born into economically difficult circumstances.
Over the years these children accumulate in the child poverty statistics. As Treasury observes…"around 1 in 5 children will spend more than half of their first 14 years in a household supported by a main benefit." So what began as a fifth of all children born in any given year extends out to become at fifth of all children at any given time.
This phenomenon is the main contributor to New Zealand's much publicised child poverty problem. The results of this reproductive pattern of behaviour get discussed broadly, but the behaviour itself is largely ignored. The misdiagnosis of the child poverty affliction leads to the wrong treatment, or at least calls for the wrong treatment.
For instance, in 2011 Labour and the Greens both proposed increasing welfare payments by paying the In Work Tax Credit to beneficiary parents. This would produce a short-term effect of increasing incomes but risks drawing more children onto welfare as the gap between wages and benefits, already very narrow, becomes non-existent. Internationally, attempting to reduce poverty via the benefit system has been shown to increase the number of workless households. The solution to child poverty is not increasing the number of children dependent on the state.
The current government has taken steps to discourage people from viewing a sole parent benefit as a legitimate alternative source of income to employment. It needs to go further by setting clear time limits and re-framing welfare as emergency assistance. It is nevertheless on a better track towards reducing child poverty than any proposed by the potential alternative government.
Trying to achieve economic, and arguably even more important, emotional security for children through the benefit system is like trying to get rich playing the pokies. It's never going to happen.
"Child poverty should not exist in this country. Blaming parents is pointless."What or who then should be blamed?
A few weeks back I wrote something about this question. It was published on Breaking Views so apologies if you have already seen it.
Without doubt one of next year's major election issues will be child poverty. Most of the voices heard on this issue, including the Children's Commissioner, blame the problem on inadequate wealth redistribution. Either wages or benefits are too low. Child poverty is therefore a product of the collective economic system and solving it becomes the responsibility of government.
I disagree. We are commonly told that approximately 270,000 children live in homes with incomes that fall below 60 percent of the median household income. Less focus goes on who these children are and why their parents are poor.
Around two thirds live in benefit-dependent homes; of those, around three quarters live with a sole parent. Yes, there are poor children with working parents but the poverty they experience tends to be temporary versus chronic. Their parents may experience short-term unemployment, or fewer working hours, especially during a recession but poverty is not entrenched. This scenario is quite different to that experienced by children who are born onto a benefit and spend much of their childhood there.
More than one in five children in New Zealand will be dependent on a benefit by the end of their birth year. The percentage improves only slightly in good economic times and worsens during bad. Because of the rapidity of the recourse to welfare it can be no surprise to most of their parents that their child would be born into economically difficult circumstances.
Over the years these children accumulate in the child poverty statistics. As Treasury observes…"around 1 in 5 children will spend more than half of their first 14 years in a household supported by a main benefit." So what began as a fifth of all children born in any given year extends out to become at fifth of all children at any given time.
This phenomenon is the main contributor to New Zealand's much publicised child poverty problem. The results of this reproductive pattern of behaviour get discussed broadly, but the behaviour itself is largely ignored. The misdiagnosis of the child poverty affliction leads to the wrong treatment, or at least calls for the wrong treatment.
For instance, in 2011 Labour and the Greens both proposed increasing welfare payments by paying the In Work Tax Credit to beneficiary parents. This would produce a short-term effect of increasing incomes but risks drawing more children onto welfare as the gap between wages and benefits, already very narrow, becomes non-existent. Internationally, attempting to reduce poverty via the benefit system has been shown to increase the number of workless households. The solution to child poverty is not increasing the number of children dependent on the state.
The current government has taken steps to discourage people from viewing a sole parent benefit as a legitimate alternative source of income to employment. It needs to go further by setting clear time limits and re-framing welfare as emergency assistance. It is nevertheless on a better track towards reducing child poverty than any proposed by the potential alternative government.
Trying to achieve economic, and arguably even more important, emotional security for children through the benefit system is like trying to get rich playing the pokies. It's never going to happen.
Saturday, December 07, 2013
Teaching lies
Yesterday Green Party co-leader Metiria Turei gave a speech about child poverty. It was interspersed with animated clips. Here's an example:
(Animation: three children discuss the economic system “So what’s happening with all our money?” “We’re giving it to the government and they’re giving it to the rich people.” “And they’re spending it on stuff they don’t need.”)
Children get their ideas from somewhere. Hard to believe this was just one of those overheard unscripted quirky conversations children have.
It's pretty appalling to imagine adults teaching and prompting these lines for the camera.
But the Greens have never been above using children to buy votes.
(Animation: three children discuss the economic system “So what’s happening with all our money?” “We’re giving it to the government and they’re giving it to the rich people.” “And they’re spending it on stuff they don’t need.”)
Children get their ideas from somewhere. Hard to believe this was just one of those overheard unscripted quirky conversations children have.
It's pretty appalling to imagine adults teaching and prompting these lines for the camera.
But the Greens have never been above using children to buy votes.
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