BPS working for NZ

July 22, 2014

National set targets for its Better Public Services programme which are showing positive results.

Long-term welfare dependency is reducing and more young people are achieving higher qualifications under the Government’s Better Public Services initiative, Deputy Prime Minister Bill English and State Services Minister Jonathan Coleman say.

The Government today published the July update of BPS targets, which confirms more good progress in tackling some of the most challenging issues facing New Zealanders, however making headway in other areas is slower, Mr English says.

“The Government is committed to making progress on the really difficult issues that affect our communities and families, and particularly the most vulnerable,” he says.

“Taxpayers spend billions of dollars a year on public services to help their fellow New Zealanders and this Government is determined to ensure they get what they pay for. Our focus on reducing welfare dependency, increasing achievement in schools and reducing crime require government agencies to find better solutions and to work with others to implement them.

“We are prepared to spend money on effective programmes which change lives, because what works for the community also works for the Government’s books.”

Dr Coleman says the ambitious goals set by the BPS initiative were chosen to make a real difference to the lives of New Zealanders.

“We have always said some of the targets will be challenging and require determination and teamwork to achieve, and it’s pleasing to see agencies working co-operatively.

“The latest update shows we are making good progress overall. We have now met the targets for reducing total crime and youth crime. There has been good progress in reducing long-term welfare dependency, increasing Level 2 NCEA pass rates and those with New Zealand Qualifications Framework Level 4.

“Progress in the past 12 months towards our target of reducing long-term welfare dependency is encouraging, with 6434 (8.5 per cent) fewer people continuously receiving jobseeker support for more than one year. We are also seeing people stay in employment for longer.

“In other result areas, more work is being done to reduce rheumatic fever, reduce assaults on children, and improve online business transactions.”

Dr Coleman says that because of the BPS programme, agencies are working together more effectively and delivering results through collaboration and innovation.

“Agencies are making better use of data to drive better services and to meet the needs of local communities. Agencies are also learning about what works through research and evaluation,” he says.

“There is a greater focus on chief executives doing what is best for the system as a whole, rather than just looking at the short term interests of their department, and that is supporting the changes needed to achieve results.”

The BPS programme began in 2012 when the Prime Minister announced goals and measurable targets in 10 challenging areas, including reducing long-term welfare dependency, supporting vulnerable children, boosting skills and employment, reducing crime, and improving interaction with Government.

The Better Public Service Results July update is here.

Money is being spent where it will have a positive impact.

This is often more expensive in the short term but it will pay off with both social and financial dividends in the medium to longer term.

Behind these numbers are individuals whose lives and outlook are better than they would have been had National not introduced targets and policies that are working for New Zealand.

We’re committed to tackling some of the most challenging issues facing New Zealanders. You can check out our good progress here: national.org.nz/better-public-services #Working4NZ


Welfare numbers lowest since 2008

July 19, 2014

Social Development Minister Paula Bennett has released latest benefit figures showing the number of people on welfare for the June quarter is the lowest since 2008, with sole parents leading the impressive results.

“There are over 16,000 fewer people on welfare compared to June 2013, with the total number currently 293,586,” Mrs Bennett said.

“When we look back just a few years to 2010, when benefit numbers were around 352,000, it’s clear to see the difference that welfare reforms are making, alongside New Zealand’s strong and growing economy.” 

Numbers on the Jobseeker Support benefit have decreased by almost 7,500 since last year and have been consistently declining since 2010, even as the overall working age population has increased over the same time.

“Most significant is the 10.7 per cent total drop in people on the Sole Parent Support benefit in the past year, which is happening nationwide with 12 per cent drops in Nelson and Waikato, and an 11.9 per cent drop in the Bay of Plenty, as well as big decreases in Canterbury and Auckland,” Mrs Bennett said

“Sole parents, particularly those who go on benefit in their teens, have the highest lifetime costs of any group on welfare and are more likely to stay on benefit the longest.”

“We’ve deliberately targeted our welfare reforms at sole parents by investing millions into intensive support and training and into help with study and childcare, so that working while raising children alone is achievable, and rewarding.” 

The latest figures also point to positive trends in the years to come, with the number of teen parents aged 18 and 19 on the Young Parent Payment decreasing by 11.7 per cent.

“With teen parents spending an average of 19 years on benefit and costing around $246,000 over a lifetime, the headway we are making now will pay off for generations,” Mrs Bennett said. 

The intensive wrap-around support through Youth Services and the tailored support Work and Income case managers are providing each person they work with is paying off – for taxpayers and for people who were otherwise at risk of long term welfare dependency.

The drop in benefit numbers is good for those directly affected and indirectly for all of us.

Moving from welfare to work has economic and social benefits for those who do it and their dependants.

The more people who can help themselves do, the more there is to support those who can’t.

Reducing the long-term cost of welfare provides significant savings which benefit the country as a whole.

 

I’m proud that our growing economy and welfare reforms are enabling more Kiwis to take control of their own lives. http://ntnl.org.nz/1mT7i5r #Working4NZ


Motherhood as career option

July 13, 2014

An interesting comment on Lindsay Mitchell’s column on the greatest risk: from Rosy Fenwicke:

. . . One piece missed from the analysis is the cultural movement which embraced the idealisation of ‘motherhood’ as a career option regardless of the financial means to support this ‘career’ choice. Prior to the ‘liberation’ of women in the 1970s or rather the ‘liberation of entitlement’, motherhood was always associated with how it was to be financially supported in the long term- hence marriage and the partnership with men.

The whole women’s movement, with its middle and upper income roots, did no service to women with little education/income or their children. Likewise the liberation of women, liberated men from their connection with parenting and their responsibilities towards their offspring.

I do think the liberation of women is a good thing but it is only now that the younger generation is getting it right and pairing it with the need to assume the responsibilities which go with it- earning your own living!

My generation may well have been the last to have been brought up with the expectation that we would marry and have children, in that order; that we would probably give up our careers, or at least put them on hold while our children were young; and that our husbands would provide for our families.

That was before the DPB which enabled women to escape abusive relationships, but also enabled them to replace their children’s fathers with the state.

I wouldn’t want to return to the days that women and their children were beholden to their husbands for everything and trapped in dreadful situations because they were financially dependent on bad men.

But I applaud government initiatives which are working with women on the DPB to help them help themselves and escape the poverty trap in which welfare can snare them.


Working for NZ

July 11, 2014

National’s working for New Zealand.

Its policies are too which is reflected in more people in work and fewer dependent on welfare.

National is making good progress helping Kiwis off a benefit and into work. #Working4NZ http://ntnl.org.nz/1thz148

These are big numbers behind which are individual people whose lives are better thanks to policies which encourage growth and help people to help themselves.

These financial and social benefits are the reason why a focus on responsible management of the economy is one of National’s priorities.

The benefits of a growing economy are more than just good GDP figures. #Working4NZ http://ntnl.org.nz/1vYKBgt

The economy matters because sustainable social and environmental initiatives depend on its health.


Most deep-seated deprivation occurs in beneficiary families

July 10, 2014

Quote of the day:

Employment for existing sole parents, and deterrence for prospective, particularly young parents, is the most effective approach to reducing child poverty. Lindsay Mitchell

This is a very small part of a post which deserves to be read in full.

It shows that being in a benefit-dependent family is the greatest predictor of child poverty.

That isn’t an argument for more generous benefits.

It’s an argument in favour of current government policies which aim to help people from welfare to work, for their own sake and the sake of their children.

 

Great work by Paula Bennett MP and all the social sector team.

The post is an opinion piece in this week’s Listener which also published two letters:

Your support of Professor Jonathan Boston’s definition of child poverty in New Zealand (Editorial, July 5) simply perpetuates the debate over how much money to throw at the problem. But money is just a glib answer to so many of society’s ills and, in this case, skirts around the elephant that’s filling the room.

A child without access to a flat-screen TV and missing out on birthday parties might constitute deprivation from an academic perspective, but the most pervasive manifestation of poverty, and the most distressing to witness, is that of three- and four-year-olds who have never known or been shown love and affection from their parents; children who are emotional vacuums.

Boston argues that children from poor homes are less likely to succeed educationally. He’s just missed that elephant. Although emotionally deprived children are almost exclusively from low-income households, a household having a low income is not the cause of such child neglect. In fact, if a child from a low-income home is loved and emotionally secure, the scholastic disparity with children from more affluent backgrounds is almost non-existent.

Any early childhood teacher will testify that before a child can start to learn, he or she must be emotionally engaged. Teaching and engaging a child from an emotionally deprived background is almost impossible and certainly beyond the resources of most early-childhood educational centres. And without early intervention, these emotionally deprived children will later help to fill our mental and correctional facilities.

Unfortunately, there are no easy fixes to the problems of bad parents – parents who probably shouldn’t be parents – and social agencies that are poorly resourced and pursue the least challenging options. Nonetheless, a good start would be recognition and debate on New Zealand’s real child poverty issue: the love-starved little ones.

Roger Clarke
(Te Awamutu)

Poverty isn’t just financial it’s emotional too.

The second letter builds on this point

Your editorial appears very “ambulance at the foot of the cliff” stuff.

Everyone would agree it is not in society’s best interests to have malnourished children suffering various degrees of brain damage as a result of poor nutrition. Although there will be exceptions to this generalisation, it is reasonable to assume that a high percentage of parents of such children are just incompetent in a variety of ways – quite possibly as a result of ignorance and deprived upbringings of their own.

The priority needs to be to identify the poor carers and the common causes of their inabilities to cope. Then introduce policies that direct resources at those people while forcing them to address their shortcomings.

The majority of carers on low incomes are managing to bring up children who are adequately loved, fed, clothed and housed. For the deprived children, the issue in a great many cases is more that of carer competency than available cash. More money is not necessarily going to solve anything in such situations if the underlying competency issues are not addressed.

Denis Muir
(RD2, Kaiwaka)

This is why National’s policy is to work with teen parents to educate them and help them help themselves and their children.

Lack of money can be part of the problem but lack of knowledge, skills and love are often contributing factors to child poverty too.

That can happen in families at any income level.


Fewer teen births

July 9, 2014

One of National’s initiatives was to take an actuarial approach to welfare.

Social Development Minister Paula Bennett sought, and got, figures for the long-term cost of welfare then worked on policies which would help reduce it.

Among the initiatives she introduced were those aimed at reducing teen-births – and they’re working.

Lindsay Mitchell writes:

. . . For years I have agitated about the long-term DPB population being derived from teenage births. The children of these parents form the most at-risk group.

But from 2008 the number of teenage births started dropping. In 2013 there were 29 percent fewer than in 2009.

But even better, at March 2009 there were 4,425 teenage parents on any main benefit. By March 2014 the number had dropped to 2,560. A 42 percent reduction.

The really important news is it’s happening across all ethnicities.The proportions are reasonably stable.

In 2009, 52 percent were Maori; in 2013, 55 percent.

For Pacific Island, the proportion rose slightly from 9 to 11 percent.

NZ European dropped from 29 to 25 percent.

The percentage who are aged 16-17 dropped from slightly from 16.5 to 15%.

The percentage who are male is unchanged 4%.

This means thousands fewer children experiencing poor outcomes – ill-health, disconnect from education,  in and out of fostercare, potentially abused and neglected, having the cards stacked against them from the outset.

Thousands of would-be teen mums will keep their own lives and  potential, and hopefully have children when they are ready to.

It’s a fantastic development.

National deserve at least some credit for it with their new young parent mentoring and benefit management regime. . .

The government can’t claim all the credit, but it has played an important part.

Measures to reduce teen benefit dependency haven’t been punitive nor have they been cheap.

They have involved working with young people to help them turn their lives around for their own sakes and those of their children.

That has both social and financial benefits for them and for the rest of us.

 


Incomes up, poverty down, inequality flat

July 9, 2014

The left tried to manufacture a manufacturing crisis and manufacturing improved.

They’ve declared a housing crisis and are particularly critical of the government’s social housing initiatives.

But Lindsay Mitchell reports good news on that front too:

. . . On the positive side,  in March 2008 the HNZC waiting list stood at 9,935. Now the number is 5,840 and includes those waiting for other social housing. A good news story for National. . .

And there’s improvement on two other problems on which the Left has been critical of the government – child poverty and inequality.

Social Development Minister Paula Bennett has welcomed the latest Household Incomes Report showing child poverty has fallen three percent.

“Today’s release shows we are making progress.  From a survey conducted between July 2012 and June 2013, findings show that median household incomes rose four percent in real terms in the two years since July 2011,” says Mrs Bennett.

“While the gains since 2011 were shared reasonably evenly across incomes, the global recession in the two years previous impacted slightly more on lower incomes.  The report also shows that trend-line inequality has remained flat.

“This latest research shows New Zealand households have bounced back.  In the past year 84,000 more jobs have been added to the New Zealand economy, 8,600 sole parents have come off benefit in the past year and there are nearly 30,000 fewer children in benefit dependent households compared to two years ago.

Moving from welfare to work is one of the best ways to address poverty for adults and any children who depend on them.

Yet the opposition have opposed and criticised every move National has made to help people get off benefits and on to wages.

“Nevertheless the Government recognises more needs to be done to support our most vulnerable families. 

“Which is why, on top of free breakfasts to all schools that want it, a social worker in all decile 1-3 schools and warming up nearly 300,000 homes, we are in this year’s budget investing nearly $500 million over four years in services and support for families. 

Initiatives include:

  • $171.8 million to boost the paid parental leave scheme. Paid leave will be extended by four weeks – starting with a two-week extension from 1 April 2015, and another two weeks from 1 April 2016. The eligibility of paid parental leave will also be expanded to include caregivers other than parents (for example, permanent guardians), and to extend payments to people in less-regular work or who recently changed jobs.
  • $42.3 million to increase the parental tax credit from $150 a week to $220 a week, and increase the entitlement from eight weeks to 10 weeks, from 1 April 2015.
  • $90 million to enable GPs to offer free doctors’ visits and prescriptions for children under the age of 13, starting on 1 July 2015. Over 400,000 more children will benefit by including six- to 12-year-olds.
  • An additional $155.7 million to help early childhood centres remain affordable, meet demand pressures and increase participation towards the Government’s 98 per cent target.
  • $33.2 million in 2014/15 to help vulnerable children, including eight new children’s teams around the country to identify and work with at-risk children and their families, to screen people who work with children, and to support children in care.

“Recognising that housing costs are a significant issue for low income families, the Government is investing $95.7 million of new money into social housing over the next four years.

“There’s more financial assistance to help people into private rentals to free up social housing for those who need it most, there’s new funding to grow more social housing in partnership with NGOs, and easier social housing assessment processes with the transfer of responsibility to Work and Income

“This Government is determined to improve the lives of children in low income families by targeting resources to services and support that are guaranteed to make a difference for those children,” says Mrs Bennett. 

The Household Incomes Report for the 2012 calendar year can be found at: www.msd.govt.nz

Lindsay Mitchell notes:

Using MSD’s Economic Living Standards Index (ELSI), hardship rates for children rose from 15% in the 2007 HES to 21% in HES 2011, then fell to 17% in HES 2012. The trend finding is robust, though the actual levels at any time depend on a judgement call on the threshold used.

 Poorer people will always be hardest hit by hard times.

But the government borrowed to take the hardest edges off the GFC for the most vulnerable and has put a lot of effort into addressing the causes of poverty – one of the biggest of which is benefit dependence.

There’s still a long way to go but the trend is in the right direction – inequality is stable, benefit dependency has reduced and poverty is declining.


Must not ignore nor accept family violence

July 3, 2014

Prime Minister John Key has announced a suite of measures aimed at addressing family violence.

“Quite simply, the rate of family violence in New Zealand is unacceptable,” says Mr Key.

While crime is at a 35-year low, violent crime is decreasing at a much slower rate.

“Almost 50 per cent of all homicides in New Zealand are a result of family violence. That is, on average, 14 women, seven men, and eight children killed by a member of their family every year.”

Mr Key says together with the Government’s focus on vulnerable children, this work will help New Zealand families live without violence and fear.

“Firstly, Tariana Turia has released the Government’s response to the Expert Advisory Group’s report on Family Violence. Of the 22 recommendations in the report, 19 have been accepted in whole or part by the Government, and I thank the Advisory Group members for their work.

“Mrs Turia is building on the work of the Expert Advisory Group to develop a comprehensive, long-term approach to break the cycle of family violence. This work focuses on changing attitudes and behaviours towards family violence, and on early interventions for drug and alcohol addiction.

“Today I am also announcing further measures to address family violence through Justice, Police and Corrections, which will build on the foundation we have laid in place.”

These include:

  • The establishment of a Chief Victims’ Advisor to the Minister of Justice
  • The trial of an intensive case management service for family violence victims at risk of serious harm or death
  • The trial of mobile safety alarms with GPS technology, so victims can alert police to their location in an emergency
  • Introduction of legislation to change the Sentencing Act, which will allow courts to stipulate GPS monitoring of high-risk domestic violence offenders who can’t currently have this condition imposed on them.

“I would like to thank Ministers Judith Collins, Anne Tolley and Tariana Turia for leading the work to foster a long-term change in behaviour, and to protect people from the misery of violence in the home,” says Mr Key.

“This Government has already undertaken a range of work to protect the most vulnerable New Zealanders.

“A great example of this is the recent passing of the Vulnerable Children’s Bill, which ensures that New Zealand’s most at-risk children get priority,” says Mr Key.

The new law provides 10 new Children’s Teams to wrap services around at-risk children early to keep them safe from harm, introduces new vetting and screening checks for government and community agency staff working with children, and puts the onus on parents who have killed, severely abused or neglected a child to prove they are safe to parent subsequent children.

“We have also increased the penalty for breaching protection orders and improved non-violence programmes for offenders,” says Mr Key

“However, it is important to remember that while governments can make laws, it is up to us as individual New Zealanders to change our attitudes to family violence.

“It is time we learned we must not ignore it, nor should we accept it,” says Mr Key.

 

New Zealand families should not have to live with violence and fear. We’re taking practical steps to address this. https://www.national.org.nz/news/features/protecting-families

Groups working with vulnerable children are supportive of the initiative:

The Red Raincoat Trust says the Chief Victims Advisor will give victims a voice:

The Red Raincoat Trust is delighted to hear of Justice Minister, Judith Collin’s plans to appoint a Chief Victims Advisor. “We are rapt; victims will now have an official voice within the criminal justice process. A Chief Victims Advisor will be able to engage directly with the victims enabling them to understand how the criminal justice process works for them. Until now, this hasn’t happened which often left victims vulnerable and re-victimised” says Debbie Marlow, spokesperson for the Red Raincoat Trust.

Ministers Judith Collins and Anne Tolley announced the Chief Victims Advisor today as part of a package which is hoped will help prevent family violence. Other initiatives announced today include an intensive case management service to provide specialist support for domestic violence victims at high risk of serious harm or death and a multi-agency response system for domestic violence.

“The package announced today will help ensure our families and communities are kept safe and it shows us that this government is committed to ensuring that our victim’s voices are heard and agencies are responding to their needs. Well done!”.

The Sensible Sentencing Trust is also supportive:

The Sensible Sentencing Trust has congratulated the Justice Minister, Judith Collins on today’s announcement regarding the establishment of the Chief Victims Advisor.

“Finally victims of crime will be afforded the true advocacy and support that they are entitled to” says Ruth Money Sensible Sentencing Trust.

We have been actively promoting the concept of victim advocacy for years now and this proposed position will go a long way to balancing victims’ rights within the system and ensuring that the Ministry of Justice stays informed regarding the needs of victims” says Money. . . .

“These moves and proactive measures from Minister Collins and the Government must be applauded. For too long the system has seen the rights of the offender or alleged offender come well before those of the victim and public safety, today we see some balance being proposed”

The Family Violence Death Review Committee (FVDRC) welcomes announcements about the trial of an intensive case management service for family violence victims.

The FVDRC is an independent committee that advises the Health Quality & Safety Commission on how to reduce the number of family violence deaths and prevent family violence. Last week it released a report analysing data collected on all family violence homicides that took place over a four-year period. The Committee urged organisations to take more responsibility for preventing abusers from using violence, rather than expecting the victims of family violence to take action to keep themselves and their children safe.

The Chair of the FVDRC, Associate Professor of Law Julia Tolmie, says the Committee’s previous report recommended the development of a nationally consistent high-risk case management process and it is pleasing to see this is being trialled.

“The sheer volume of police call outs for family violence often means the most dangerous cases of family violence do not get the attention they need within the systems we currently have,” she says.

“The aim of an intensive case management service is to bring the key agencies together to share information, as well as to develop, implement and monitor a multi-agency safety plan.”

Julia Tolmie says high-risk case management teams overseas have been highly successful in preventing deaths from family violence. . .

The FVDRC also supports the trial of mobile safety alarms with GPS technology, so victims can alert police to their location in an emergency and the introduction of legislation to change the Sentencing Act, which will allow courts to stipulate GPS monitoring of high-risk domestic violence offenders who can’t currently have this condition imposed on them.

The measures announce deal with reported crime.

Not all abuse and neglect is reported and some isn’t reported until it’s too late.

It is equally important to address the causes of abuse and neglect to prevent them.

The seriousness of the problem is shown by For the Sake of our Children Trust in a 24-year snapshot of 58 deaths of children as a result of neglect or abuse.

It points to clear risk factors:

. . . Based on the 58 known cases listed, 51 cases identified child’s biological parents were NOT married. The perpetrator responsible for the death indicated 27 of the deaths tabulated had a ‘stepfather’ or ‘boyfriend/partner of the mother being responsible or part responsible for the child’s death. The remaining figures for the perpetrator was indicated the mother or relative of the child or unknown.  . . .

Apropos of this, Lindsay Mitchell notes this is a fair assumption given that around 87 percent of children who have contact with CYF appear in the benefit system very early in their lives.

The benefit system has a place as a safety net, but it can also be a trap which increases the chances of poorer outcomes for children, including increasing the risk of abuse and neglect.

Moving families from welfare to work has obvious financial benefits for them and the country.

The social benefits are equally important. they include better educational and health outcomes and a lower risk of neglect and abuse.


NZ one of better for inequality

June 25, 2014

The left have done their best to make inequality the problem of the moment.

Fortunately for New Zealand, though not the left’s campaign, the OECD facts contradict their story:

New Zealand was one of only six developed economies in which both income inequality and disposable income inequality was flat or slightly better between 2007 and 2011, according to the Organisation for Economic Cooperation and Development.

In its latest report, which looks at the impact of the global financial crisis on inequality across 33 developed economies, the OECD confirms New Zealand performed relatively well through the GFC and its aftermath, Finance Minister Bill English says.

“The domestic recession in New Zealand under the previous government in early 2008 and the global financial crisis that followed were tough on many New Zealanders and their families,” he says.

“However, this Government ran large deficits and borrowed through that period to continue its significant support programmes. At the same time, we also set a track back to surplus and supported an economic recovery that is now delivering more jobs and higher incomes.

The opposition criticise the increase in debt but give the government no credit at all for using it to protect the most vulnerable from the worst impact of the GFC.

“This latest OECD research confirms that while inequality increased in many OECD countries during the global financial crisis, this was not the case in New Zealand.”

Using data compiled for the Ministry of Social Development’s household incomes report, the OECD’s latest Income Inequality Update confirms that both income inequality and disposable income inequality were flat or slightly better in New Zealand between 2007 and 2011.

It also finds that the disposable incomes of the top 10 per cent of New Zealand’s income earners were hit harder than the bottom 10 per cent of income earners through this period.

“Across the OECD as a whole, the opposite was true,” Mr English says. “The bottom 10 per cent of disposable incomes fell by twice as much through the GFC and the top 10 per cent.

Mr English says that the Government remains focused on supporting the most vulnerable New Zealanders by improving public services, lifting education standards and supporting more New Zealanders off welfare and into work.

“It’s in these areas that we can make a real difference to the lives of New Zealanders most in need.”

The easiest way to solve inequality is to make the rich poorer – as the left want to do by taxing them more.

That might close the gap between the top and bottom but will do nothing to improve the lot of those in most need.

Addressing their problems, as the government is doing through better public services, higher achievement in education and helping those who can work to do so is the only way to get sustainable improvement in living standards for the vulnerable.

The OECD report is here.


Higher income households paying higher share of tax

May 29, 2014

The opposition fought National’s tax cuts tooth and nail and keep saying they help the rich and hurt the poor.

That isn’t supported by the facts:

New data indicates New Zealand’s income tax and support system continues to provide significant income redistribution, with households earning more than $150,000 a year forecast to pay 74 per cent of net income tax in 2014/15, compared with 58 per cent in 2008/09.

“Four years after the Government’s comprehensive tax reforms, latest data confirms that New Zealand’s income tax and support system significantly redistribute incomes to households in need,” Finance Minister Bill English says.

“It is now clear that higher income households are paying a larger share of income tax than they were in 2008.”

“As I’ve said previously, the Government has maintained a redistributive income tax and income support system that supports low and middle income families and helps New Zealanders through times of need. So at any particular time, a large number of households effectively don’t pay income tax,” Mr English says.

“The amount these households pay in income tax is exceeded by the amount they receive from welfare benefits, Working for Families, paid parental leave and accommodation subsidies. That’s entirely appropriate for those families genuinely in need.”

Using data from the Household Economic Survey, Treasury has updated information provided last year to include forecasts for the 2014/15 tax year.

The Treasury estimates that this year households earning over $150,000 a year – the top 15 per cent of households by income – will pay 49 per cent of income tax.

But when benefit payments, Working for Families, paid parental leave and accommodation support are taken into account, these 15 per cent of households are expected to pay 74 per cent of the net income tax. And that is before New Zealand Superannuation payments are counted.

It also excludes the impact of other aspects of the tax changes in 2010, including tightening property tax rules and compliance, and increasing GST.

By contrast, households earning under $60,000 a year – which is just under half of all households – are expected to pay 9 per cent of income tax.

“When we take income support payments into account, as a group they will actually pay no net income tax at all,” Mr English says.

“That’s because the $2.5 billion of income tax they are expected to pay will be more than offset by the $7.3 billion they will receive in income support.

“It’s appropriate to maintain a tax and income support system that helps low and middle income households when they most need it.

“But people who call for even greater transfers to low income families, or who call for the top tax rate to be raised, need to be aware of how redistributive the tax and income support system already is,” Mr English says.

“This also highlights the importance of Government policies to support people out of welfare and into work.”

The left’s answer to many problems is to throw more money at them.

That’s other people’s money and their favourite source of that is the wealthy who, they say, should pay more tax.

These figures show the wealthy are already paying most income tax, families on lower income are paying no net income tax and households on less than $60,000 are paying just 9%.


Lower welfare costs fund surplus

May 20, 2014

A reduction in welfare spending is funding the surplus.

Economic growth has helped but a faster than expected drop in the cost of welfare is the bigger contributor:

English told an audience of business people that in 2010 the Government had expected to be spending $11.5b on welfare this year.

However in following Budgets it trimmed the forecasts and this coming year it would be spending about $10.5b.

“The welfare bill is going down and going down faster than we expected. . .

English said governments in the past had been passive on these costs but National had tightened up the system and the expectations of people on welfare.

It got experts to work out what the 290,000 people on welfare would cost in the long run.

Their total liability was $76b. Apart from superannuation it was one of the big costs that underpinned the tax bill.

That is a huge amount of money, and National has proven that with the right policies it is possible to reduce it.

Two thirds of the liability came from people who first got a benefit under the age of 20. “So it confirms what grandma told you. “Don’t let those young people get off the rails because when they do it’s very expensive.”

The experts told the Government that if a person got a benefit once it made them much more likely to get a benefit again. If a young woman under 20 with a child went on a benefit the average length of stay on the benefit was 20 years.

“That’s expensive, very expensive,” English said.

A couple of years ago the Government put a supervising adult with the 4600 mostly young women under 20 with a child who were on a benefit. They typically had little education and lived in old, cold houses and had been left to sink or swim on their own.

That number had now shrunk by 40 per cent to 2600.

“And that’s going to save us hundreds of millions.”

Kiwiblog has a budget slide that illustrates the savings:

welfare

The savings aren’t just in welfare spending.

Health and educational outcomes are better for children in families supported by work rather than welfare.

Those savings aren’t just financial either – there are significant social dividends from stopping people going on to welfare and helping those who can work to work.

 

 


Most fundamentally important task

May 18, 2014

Photo: We’ve committed an extra $500m in the Budget to support children and families. http://ntnl.org.nz/1sCYDoh

No-one should contradict the first half of this sentence – parenting is the most fundamentally important task in society.

That they need support should be beyond debate too.

However, the nature of that support and who gives it and how much is given is debatable.

Parent with babies and young children used to be able to rely on getting practical and moral support from  extended family, friends and neighbours.

Then the state got involved through family benefit.

A generation ago all mothers received the FB for each child from birth until the end of the year the child turned 18.

It wasn’t a lot, about $5 a week from memory, though to put that in perspective the rent on my first flat, in 1976, was $7 and the next year rent was only $4.75.

The FB was dropped by Ruth Richardson on the grounds that it was ridiculous for someone like her to get the money when she and her family didn’t need it while other families needed more.

Various forms of more targeted help for families have been introduced since then.

One of those is Paid Parental Leave – targeted not on need, but whether or not the mother was in paid work for the required length of time before the baby was born.

That means wealthy families in which the mother has been working get help for jam while poorer families in which the mother wasn’t working might not have enough for bread.

The importance of time together for mothers and babies to bond is beyond debate.

In the past that meant most women stopped working for some time and the family lost income as a result.

It’s now the norm in most western countries to pay some form of PPL to give some financial support to women who stop work to care for their babies.

But it still leaves the question of whether there should be help for families in which the mother wasn’t in paid work, if not universally at least for those on lower incomes.

There is of course another question – whether or not it’s the taxpayers’ role to provide financial support for any new parents and the wealthier ones in particular.

But once a benefit like PPL, it’s politically difficult to cut it.

I’m still left with another question, though – would the practical and moral support parents used to get from extended family, friends and neighbours be at least as valuable for many as the financial help from the state?

Regardless of your financial position, it’s very difficult doing the most fundamentally important task of parenting in isolation.


The value of work

May 9, 2014

The facts are unequivocal: children brought up in  families where at least one parent is working generally do better than children in families on the same income from a benefit.

That doesn’t mean that every child in a working family does well, nor that every child in a beneficiary family doesn’t.

It does mean that the chances of doing better, in social and financial terms, are greater in working families than beneficiary ones.

It does mean that there’s more than a monetary value to work and more than the income to lose by not working.
Photo: 84,000 more Kiwis in work over the past year.  http://bit.ly/1iVcOn0

This is why National is determined to help people who can work to do so, and why 84,000 more jobs added to the economy last year is cause for celebration.


Work part of positive change

April 27, 2014

Fifteen thousand fewer people dependent on benefits.

That’s not just a number.

That’s 15,000 individuals whose lives have improved because they’ve moved from welfare to work.

It’s a better life for their families too.

Welfare reforms are working – so are more people.

Photo: Our reforms are helping thousands of New Zealanders move from welfare into work. See more: www.national.org.nz/Article.aspx?articleId=43648


Mindset change

April 22, 2014

A change in mindset is credited for reducing the number of people on sole parent benefits  to the lowest in two decades.

A single parents’ group says “a complete change of mindset” has helped reduce the number of people on the sole parent benefit to the lowest level in more than 20 years.

Numbers on sole parent support have plunged by 8600, or 10 per cent, in the year to March.

It is the biggest drop in a single year since the benefit – previously known as the domestic purposes benefit, or DPB – was created in 1974.

Sole parent support is now being paid to 75,844 sole parents, fewer than in any year in the DPB’s history since 1988.

About 22,000 people with no children under 14 were moved to other benefits when the DPB was abolished last July, but even if they were added back in, the total number of sole parents on any kind of benefit is the lowest since 1993.

Auckland Single Parents Trust founder Julie Whitehouse said tighter rules, which require sole parents to look for part-time work when their youngest child turns 5 and fulltime work when that child turns 14, had completely changed attitudes.

“It’s amazing,” she said. “It’s so good that I can’t even get them to volunteer time. The whole mindset has changed.”

Asked how many of her 580 members now had jobs, she said: “The shift is incredible, I’m almost tempted to say 100 per cent – it really is big. All the attitudes changed. Everybody knew that when your child is 5 you have to go to work.”

The improvement is partly due to the economic recovery. Statistics NZ surveys show employment rose by 67,000 last year and the unemployment rate dropped from 6.8 per cent to 6 per cent.

But the 10.2 per cent drop in sole-parent welfare rolls in the year to March was almost twice the 5.3 per cent drop in jobseeker support. . .

Social Development Minister Paula Bennett explains what the reduction in people on benefits means for children:

We all know that one of the best things that we can do for children is to ensure their parents are in work and not on a benefit. The Children’s Commissioner’s Expert Advisory Group on Solutions to Child Poverty report said that “having a parent in paid employment is the most important way to move a child out of poverty”. That is why I am so pleased to see that there are 8,600 fewer sole parents on a benefit, and there are also 17,700 fewer children now living in beneficiary households compared with March last year, and a whopping 29,500 children fewer than 2 years ago. This Government’s investment in supporting sole parents is paying off.

Alfred Ngaro: What else do the figures show about how welfare reforms are helping children?

Hon PAULA BENNETT: Fewer teenagers are having babies and going on the benefit. There are fewer of those beneficiaries. That means that the fewer whom we have going on now, the fewer we will have in the longer term, because they are the group that is most likely to stay there the longest. Teen pregnancy is falling, with 3,303 babies being born to mothers under 20 in 2013. That figure is down by 36 percent from 2008.

Hon Anne Tolley: That’s excellent.

Hon PAULA BENNETT: Yes, it is. It is really amazing. The benefit figures also show a 13.4 percent decrease in young parents aged 18 and under getting the young parent payment. This is a significant policy development in this area, and one that is great for teenagers and those babies. . .

The opposition has fought welfare reform at every step.

But preventing people from going onto welfare and moving those on it into work as quickly as possible is the best way to reduce poverty.
Photo: The number of people on the single parent's benefit is the lowest it has been in more than 20 years. Welfare reform is working. http://nzyn.at/1kK4cyz

 


Welfare numbers back to pre-rescession levels

April 19, 2014

The number of people receiving welfare has dropped back to pre-recession levels.

Social Development Minister Paula Bennett says the latest benefit figures showing a five year low confirm New Zealand welfare numbers are back to where they were pre-global recession.

Benefit numbers have dropped five percent or nearly 15,000 to 295,320 in the past year (March 2013 – March 2014).  This has resulted in 17,700 fewer children living in beneficiary households compared to March last year and a whopping 29,500 children fewer than two years ago.

“Beneficiary numbers have fallen to the lowest level since March 2009.  When the Government took office in late 2008, the global financial crisis was already beginning to bite with benefit numbers increasing in the three quarters prior to and including the election,” says Mrs Bennett.

“The big success is the 10 per cent drop in sole parents and their children coming off Sole Parent Support. 

“More than 8,600 sole parents have come off Sole Parent Support in the past 12 months, making up almost 60 per cent of the total reduction.

“Particularly pleasing is the 13.4 per cent decrease in young parents aged 18 on Young Parent Payments.  We know that going on a benefit as teenager with children puts that person and their kids at huge risk of becoming trapped in welfare dependency. 

“In fact 70 per cent of the country’s future liability welfare bill can be attributed to people who first went on benefit in their teens.

“The reductions we’re now seeing will mean fewer people on benefit in the years to come.  We have more young people getting education and training through our Youth Service support which means we’re going to see healthier, more prosperous households,” says Mrs Bennett.

“Post peak recession in March 2010, beneficiaries made up 12 per cent of the working age population.  This has dropped to 10.6 per cent as at the end of March. 

“This Government is putting more money than ever before into the welfare system.  We are supporting people earlier, being clearer in our job expectations and putting more focus on at-risk teens.  All of this is making a significant difference.

“Only a few weeks ago New Zealand was judged the best country in the world to live in – our latest welfare figures show things are just getting better,” says Mrs Bennett.

Full benefit data is available at: http://www.msd.govt.nz

There are obvious financial benefits for the individuals on welfare and the country from having fewer beneficiaries and their children.

Just as important are the social outcomes which go with work rather than welfare – better health and education outcomes, less crime . . .

The decrease has been achieved by improving economic conditions and active engagement with beneficiaries to help and encourage those who could work to do so.

Photo: Welfare numbers are now back to pre-recessions levels.

 

 


Welfare reform that works

April 15, 2014

Robert Doar writes on welfare reform that works and he does it from the inside:

. . . From early 2007 until the end of 2013, I was the commissioner of the New York City Human Resources Administration (HRA), the agency with the 1960s-era name that occupies 180 Water Street. And before 2007, going back to early 1996, I worked at, and for a time led, the state agency that was responsible for overseeing many of the government-assistance programs administered by the city. But while my perspective is that of an insider, the facts speak for themselves: From 1995 until the end of 2013, New York City’s cash-welfare caseload shrunk from almost 1.1 million recipients to less than 347,000 — a drop of more than 700,000 men, women, and children.

The achievements of welfare reform in New York City were about more than reducing the number of people on cash welfare. There were also big increases in work rates for single mothers (up from 43 percent in 1994 to 63 percent in 2009) and large reductions in child poverty (down from 42 percent in 1994 to 28.3 percent in 2008). Even in the wake of the 2008 recession, child poverty in New York City in 2011 was almost ten percentage points lower than it had been the year before welfare reforms started.

Welfare-caseload declines, work-rate increases, and child-poverty declines all happened largely because, for eight years under Mayor Giuliani and twelve years under Mayor Bloomberg, New York City required welfare applicants and recipients to work, or look for work, in return for benefits. We aggressively detected and prevented fraud and waste (although we didn’t stop all of them); and we enforced these requirements with a vigilance that every day led to hundreds of case closings and welfare-grant reductions as we made clear that welfare came with responsibilities. . .

He gives 10 tips on welfare reform which includes:

Always promote personal responsibility. The minute an applicant believes that government will solve all of her problems, she loses. Accepting responsibility for one’s own future is the vital first step to moving up. . .

Employment is far better than training and education. In the years leading up to the passage of the federal welfare-reform legislation, study after study showed that programs that encouraged training and education over rapid employment proved less successful at getting people into jobs that lasted.  . .

The priority should be work first, then education or on-the-job training as a supplement.

Making work pay is welfare reform too. Being off of cash welfare does not mean a person is off of all assistance. Not only are a lot of former cash-welfare recipients still dependent on some form of assistance, but the increasing use of these programs means that total spending has not been reduced as a result of federal welfare reform. It has actually increased.

Food-stamp benefits, child-care vouchers, and public health insurance all were part of this arsenal of non-cash “work supports” that we promoted in New York. And so long as these forms of government assistance went to working people, the public was supportive. . .

Be honest about the importance of married two-parent families. Very few families with married and involved parents, both working, ever need any form of welfare. This is why I came to believe that it was dishonest for us not to talk about the importance of parents’ marriage in reducing the poverty of children. Children need stable, two-parent families. No government or public program can replace a missing parent. It was the recognition of government’s inadequate response to the problem — and my desire to be honest about it — that led us to put together the city’s public-messaging campaign about the consequences of teen pregnancy.. . . 

Caseworkers don’t cost much; benefits do. I understand the temptation to rail against bureaucrats and bureaucracy, but in welfare the money is spent mostly on benefits to clients, not the administrative costs of the agency. Welfare-administration costs are typically less than 5 percent of a program’s total costs. . .

Welfare recipients (and workers too) will try to “get over.” “To get over” is a very New York expression meaning to steal – usually from government and usually to obtain benefits that one isn’t entitled to. There’s no better opportunity for it than welfare programs. Turning a blind eye to the potential for fraud and abuse is naïve.. .

The vast majority of expenditures in welfare programs are consistent with program rules and not fraudulent. But the overall size of the spending is so great that even a 5 percent error rate is significant. And, more important, taxpayers have a right to expect that spending on programs be managed properly. . . .

When it comes to the disabled, trust but verify. Obviously a work-based welfare program can’t be successful if someone is too sick or disabled to work. But accepting disability claims at face value isn’t the right answer either. That’s why we set up a whole separate (and, yes, bureaucratic) process for welfare applicants who claimed they could not work because of some physical or mental condition. . .

Over the years, we found thousands of people who said they could not work but in fact could. We helped an equal number improve their underlying conditions so that they could go to work. And we helped those who really did qualify for the federal program gather the documentation necessary to apply.Always cheer for the economy. I spent seven years running New York City’s welfare programs for Michael Bloomberg, and as proud as I was of what our social-service programs provided to poor New Yorkers, I never forgot that perhaps the most important key to helping struggling families was a vibrant economy that offered an abundance of entry-level jobs. That’s why I was always first in line to support and encourage every kind of thoughtful economic-development idea that promised job creation.   . .

To make welfare programs succeed, always cheer for the economy, and those who nurture it. . .

All of these factors apply just as much in New Zealand as New York.

Welfare reforms that work are better for the people who move from welfare to work, or who get the right help because they can’t work.

The benefits aren’t just economic they’re social too with improvements in positive statistics like health and decreases in negative ones like crime.

Welfare reforms that work pay-off for us all.

Hat Tip AEIdeas


Seeking interest in social bond pilots

April 14, 2014

The Ministry of Health is seeking groups interested in social bond pilots:

A new and innovative alternative to the way social services are delivered has come a step closer, Minister of Finance Bill English and Health Minister Tony Ryall say.

The Government last year agreed to a social bonds pilot and people are now able to register their interest in becoming an intermediary in the pilot programme.

An intermediary is a person or group who brings investors and service providers together. The intermediary uses their skills in project management and finance to raise funds and drive performance to achieve agreed outcomes. 

“The Government does not have all the answers to our communities’ problems and social bonds are one new way to involve investors and private or not-for-profit organisations in improving social outcomes, while achieving value for taxpayers,” Mr English says. 

Mr Ryall says social bonds give service providers greater freedom and flexibility to use private capital and expertise to deliver services to their communities – with the Government paying a return depending on achievement of agreed outcomes.

“This shifts risk from the taxpayer and provides an incentive for our investment community to use its expertise for generating results in the social sector,” Mr Ryall says.

Social bonds trials are underway in the United Kingdom, United States, and Australia where examples of their use include targets of reducing reoffending, increasing employment, improving outcomes for children in care, and improving management of chronic health conditions.

In New Zealand, service providers have submitted their ideas and a shortlist is being compiled by the Ministry of Health, which is leading cross-agency work on the pilot.

“We’re still in the early stages here but progress from the overseas pilots is encouraging,” says Mr Ryall.

“We see potential for social bonds to deliver better results and attract investment to preventative services and we think the time is right to pilot this model here.”

Mr English says there is a strong alignment between the social bonds model and many of the other initiatives being put in place across government like Better Public Services where the focus is on achieving results for the investment New Zealanders make in public services through their taxes.

“If successful, the social bonds pilot might attract investment and offer lessons that could be used for contracting in future, including further social bonds,” Mr English says.

How refreshing, and encouraging, to have a government which admits it doesn’t have all the answers and is willing to try a different approach to solve problems.

Rewarding achievement puts the risk with the provider while giving them a strong incentive to succeed.

This isn’t just throwing money at problems, it’s aimed at getting solutions.

More information of Social Bond Pilots is here.


Tough on tax evasion

April 12, 2014

One of the left’s complaints is that tax evaders are treated more leniently than those who abuse welfare.

That is not supported by the facts:

Speaking at the OECD Cash and Hidden Economy Conference today, Revenue Minister Todd McClay reiterated the Government’s commitment to clamping down on tax evasion and avoidance.

“This is an area the Government has invested heavily in and we are starting to see results,” says Mr McClay.

“In Budget 2010, we invested $120 million in going after tax non-compliance; another $78.4 million was further invested in Budget 2012.”

“Last year compliance activity for ‘hidden economy’ tax evasion gave a return of $45 million, $5.60 for every dollar spent. For non-compliance through property speculation, $53.8 million worth of discrepancies were found, a return of $8.42 for every dollar invested.”

“That is money we now have to invest in things like health, education and rebuilding Christchurch.”

“Our opponents claim that we are obsessed with welfare fraud while do nothing about tax dodging, however, this couldn’t be further from the truth.”

“Spending on Welfare Fraud has remained at exactly the same level as it was under the last Government, around $35 million a year, yet the management of debt and outstanding returns by IRD has gone up from $88 million to $125 million in Budget 2013.”

Overall last year, Inland Revenue collected around $4 billion worth of debt and outstanding returns.

“Prevention is always better than the cure, however.”

“Inland Revenue works hard to help people understand their obligations and is constantly finding ways to simplify and speed up compliance for taxpayers.”

“I encourage anyone who may be struggling to meet their obligations to contact Inland Revenue and work out a repayment plan.”

“It is easier for taxpayers if they comply on time than have Inland Revenue chase them up later,” says Mr McClay.

 

Photo: Since National's been in power, extra money has been spent to make sure everyone pays their fair share of tax. http://nzyn.at/1gRPkse


$10.5m saved cutting benefits for travellers

April 5, 2014

When the left accuse National of benefit bashing they show they have no affinity for hard working people on low incomes.

How galling it must be for them to know that their taxes help support people who could work but don’t and that some on benefits are able to enjoy luxuries like overseas travel which they can’t afford themselves.

Helping those in genuine need is the duty of a compassionate society, that help doesn’t mean indulging those who could be helping themselves. That is why initiatives like benefits cuts for overseas travellers are necessary.

Social Development Minister Paula Bennett says more than 21,000 people have had their benefit cut for travelling overseas since July last year.

“We tightened the overseas travel rules as part of welfare reform and have saved New Zealand more than $10.5 million in suspended payments for beneficiaries who still chose to travel.

“That’s a staggering number of people. More than 1,750 people have had their benefit suspended for multiple overseas trips.  This includes 191 people who travelled three times and 1,555 who have travelled twice since last July.

“These figures don’t include those on Superannuation. 

“The largest group of suspensions applied to nearly 11,200 people on job seeker benefits, followed by more than 4,800 sole parents.

“The new rules recognise that beneficiaries should be ready and available for work not prioritising travel.

“Since the changes 4,880 peoples’ benefits were cancelled because they failed to reconnect with Work and Income eight weeks after their departure from New Zealand.

“The rules, while tighter, still allow for overseas travel on compassionate or health grounds in certain cases for job seekers.  People without work obligations may in most cases travel overseas for up to 28 days. 

“These figures are the number of people who chose to travel knowing their benefit would be suspended.  Every day we hear stories of how people cannot live on the benefit.  Today you’re hearing that literally thousands can not only live on it but can afford to travel overseas as well,” said Mrs Bennett.

I don’t think the original architects of the welfare system intended support to extend to such luxuries and it’s not what the modern system should be covering either.

Photo: Under National’s welfare reforms, beneficiaries are expected to be ready and available for work, not travelling overseas - www.national.org.nz/Article.aspx?articleId=43536


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