False kindness is cruel

February 26, 2020

Benefits have been indexed to inflation rather than wages for good reason – to ensure there is a big enough gap between the two to make work more attractive than a benefit.

Lindsay Mitchell points out that the previous government understood the danger of this:

 “…it is desirable to create a margin between being dependent on a benefit and being in employment….
The Labour Party isn’t the party that says living on a benefit is a preferred lifestyle. Its position has always been that the benefit system is a safety net for those who are unavoidably unable to participate in employment. From its history, the Labour Party has always been about people in employment.”
Michael Cullen, 2008

This is supposed to be a government of kindness but linking benefit increases to wage rises is false kindness, cruelly disincentivising work and trapping more people in poverty.

The Taxpayers’ Union points out that beneficiaries are getting something denied to the people who pay the taxes that fund the benefits:

The indexation of benefits to wages means that taxpayers are treated less fairly than ever, says the New Zealand Taxpayers’ Union.
 
Taxpayers’ Union spokesman Louis Houlbrooke says, “The Government says it’s fair to index benefits to wages because we already do this with superannuation. So about tax brackets? These aren’t indexed to inflation, let alone wages. The result is that each year, taxpayers keep less, while beneficiaries get more.”
 
“Politicians often say we cover the costs of super and benefits by increasing productivity. But under this Government’s policies, increases in productivity will automatically trigger hikes to benefits and super, meaning we can never dig ourselves out of this spending hole.”

 

Mike Hosking also raises the issue of productivity:

Most who got a three per cent wage rise did so because they did something productive. They made more, produced more, worked more – that’s the productive side of the economy. That’s how you incentivise people: there is reward for work

Beneficiaries got the same rise, that’s the non-productive side of the economy. Nothing more was produced, but more was put into it. And that is why the money is gone and we are borrowing.

Economies grow because of productivity, not because of non-productive spending. You need one to fund the other, and one must be stronger than the other. That’s how you move forward, run surpluses, and afford to cover difficult days.

A level of redistribution, the likes of which we are currently experiencing, leads nowhere sound fiscally. It makes us increasingly vulnerable to global shocks, and we are too small to be running that risk.

The spread of coronavirus (COVID-19) is bringing a global shock ever closer, threatening jobs and increasing the likelihood of more people on benefits.

It is neither kind nor sensible to be doing anything that will discourage work and add to the burden placed on taxpayers.

 


What are the parents doing?

February 21, 2020

A scheme that will eventually provide lunches in 120 low decile schools has been launched.

School principal Robyn Isaacson said the programme, only recently introduced in Flaxmere, had helped the key aim of raising student achievement.

Isaacson said the programme meant children were able “to open a lunch box, to never actually complain about what’s in it, to know that it is nutritious and is able to fill their pukus so they can learn in the afternoon”. . . 

In his autobiography, *The Good Doctor, Lance O’Sullivan said if children were fed and had any health problems treated at school the chances of them learning and breaking the cycle of poverty were greatly increased.

I can’t argue with that but it begs the question: what are the children’s parents or caregivers doing?

Some will be doing all they can to provide for their children but finding that despite their best efforts the money coming into the household falls short of the costs of providing for their families.

Some will be trying to manage but lack the skills to do so.

And some won’t even be trying.

There is no easy answer to dealing with this but the National-led government was making headway with its social investment initiative. That took some of the money that would be spent on the long term costs for people on benefits and was spending it up front in equipping beneficiaries for life and work.

Not all the people who can’t, or won’t, feed their children will be beneficiaries but they are the ones who get public money to provide for their families. If they can’t, or won’t, look after their children, they ought to be getting whatever is needed to ensure they do.

And if they still don’t or won’t? There’s no easy answer to that question but we must find one, and it must be one that doesn’t put the children at risk.

*The Good Doctor by Lance O’Sullivan, published by Penguin.


Living better lives

November 7, 2019

National’s welfare proposals have been condemned as beneficiary bashing by the usual suspects, but the party’s welfare spokeswoman Louise Upston says their aim is to help people live better lives:

. . .When people are in need, it’s important we support them to get back on their feet and give them a hand-up. We believe there should always be a safety net for Kiwis who need it. . . 

A safety net for those in need should not be confused with a hammock for those who could but don’t support themselves.

 At the heart of our policy proposal is the Social Investment approach. The previous National Government designed it, and it transformed lives – using data to identify the best ways we can solve the problems faced by Kiwis. Underpinning it all is the idea that the best interventions are the earliest ones.

This approach targeted spending, often at a greater initial cost but with a much lower long-term cost and it worked.

We know that families are the best form of welfare we have, so in helping families, we’re helping all Kiwis to live better lives.

That’s why National’s committed to investing in the first 1,000 days of a child’s life. We know that not all mums and dads feel prepared for what life as a parent will bring, so we’ve proposed a range of ways we can support young parents.

Whether that’s more home visits for all families in the first six months, or a focus on intensive home visits for vulnerable young mums who are at risk, we want to ensure we’re supporting families as they navigate their first moments with a new baby.

Plunket nurses used to visit all homes with new babies every week at first then gradually reducing the visits unless there was a need for more. There was no stigma attached as because visits were universal.

That’s why we’ve committed to giving all new mums a guaranteed three day stay in a hospital or postnatal facility just after giving birth, and why we want to change parental leave so parents can take it at the same time, for the whole family to help each other out and bond in those early days.

By getting Kiwi kids off to the best possible start, we’re giving New Zealanders the best chance to reach their full potential.

Better starts for babies improve their chances of better lives and provide a foundation for happier fmailies.

We’re looking for solutions that break cycles of poverty and tackle the root causes, not just the symptoms of disadvantage. We want to measure the success of those solutions using targets. Targets work, ensuring clear, focussed goals on positive outcomes for Kiwis.

When we introduced targets for immunisation, rates went up. We introduced targets for the number of people achieving NCEA level 2, and the numbers went up. We know targets are effective.

This Government scrapped targets – but we’ll reintroduce them so that we can help more and more New Zealanders to live better lives.

Targets are about spending taxpayers’ money responsibly – and we believe in spending taxpayers’ money responsibly. We wouldn’t have social welfare at all without the hard work of New Zealanders every single day, paying their taxes.

National believes work is the best route out of poverty, through the security of a regular pay cheque and the chance of career development. Children do better when their parents are in work, and parents do better too.

A relatively few people have health problems which mean they will never be able to work. But those who could work, should work and those who need it should be given help to be work ready and secure employment.

National is committed to having the right mix of obligations and sanctions, so that those who can work, do work, with all the opportunities that brings. We want to reduce the number of children in benefit-dependent households.

We want to hear your feedback on how we can best support New Zealanders, ensure taxpayers’ money is spent responsibly and give all New Zealanders the opportunity to live better lives. Please have your say at www.national.org.nz/social_services.

Sir Apirana Ngata’s prediction that welfare would destroy Maori has become true but not just for Maori.

The statistics are clear, people in work are much likelier to live better lives than those on benefits.

The government must look after the most vulnerable but it also has a responsibility to help those who could look after themselves to do so.


Delivering $132m more on dole

October 29, 2019

The government’s year of delivery has delivered an extra $132m in jobseeker benefits.

An additional $132 million of dole payments have been dished out to people who are able to work in the past year, Leader of the Opposition Simon Bridges says.

“New Zealanders deserve a fair go but not a free ride. Since Labour came into Government an additional 22,000 people have gone on the Jobseeker Benefit.

That’s around the total population of the Waitaki District who could be working but aren’t and on a be fit because of that.

“Social Development Minister Carmel Sepuloni doesn’t seem to care how many people go on the dole and she doesn’t believe there should be sanctions if people show no willingness to get into employment.

“Being in work lifts people out of poverty and improves the lives of families. There’s no excuse for taxpayers having to pick up an additional $132 million, a figure that doesn’t include inflation. This figure is just for people on the Jobseeker Benefit – people who are fit to work and doesn’t include other benefits.

Employers are crying out for workers so there shouldn’t be people who are able to work lining up for the benefit.

These aren’t people who can’t work, they could be working and aren’t.

“This week National will release our Social Services Discussion Document. We’ll release our positive plans to get more people into work and improve the lives of individuals, families and communities.

“National is aspirational for New Zealanders, we want people to have a safety net when they need it but we recognise that this is paid for through taxes and there needs to be accountability and obligations with that.

“The Minister needs to explain to taxpayers why they’re funding an additional $132 million in welfare and what her plan is to get people back into work.”

There are lots of reasons why people who are able to work might not be able to find a job in the short term and benefits provide a temporary safety net for them.

But there’s something wrong with a system that allows the safety net to become a hammock that traps people in dependency when so many employers are desperate for staff.


Two years and what have we got?

October 28, 2019

The Labour, NZ First, Green government has just passed its second anniversary in power and what have we got?

  • Fee-free tertiary education which hasn’t had a positive impact on participation, and a third of those who got the help failed or withdrew.
  • KiwiBuild turned into KiwiFlop.
  • Higher fuel taxes for all to pay for public transport in Auckland which includes the stalled project of rail to airport about which officials can’t get direction from the Minister.
  • Two Ministers resigned/sacked.
  • Thousands of hectares of productive land converted to forestry.
  • Subsidies that incentivise forestry over farming.
  • Foreign ownership of productive land encouraged by much less rigorous requirements than for purchase for farming, horticulture or viticulture.
  • Business confidence in the doldrums.
  • Interest rates heading towards zero and below.
  • DHB deficits growing.
  • Polytechs that are working well to be sacrificed for those that aren’t.
  • Virtue-signaling environmental policies that come at a high economic and social cost here and add to environmental cost elsewhere.
  • Policy at the mercy of the minor coalition partner’s leader’s whim.
  • The waka-jumping legislation.
  • The Provincial Growth Shane Jones Promotion/NZ First re-election Fund.
  • Policy announcement after policy announcement that is high on feel-good but low on planning.

It was easy to come up with those negatives, and it wouldn’t be hard to add more.

But what of the positives?

The only one that comes to mind is a Prime Minister who  gets a lot of focus and high praise internationally.

But how much is that worth when there are so many problems that aren’t being solved at home?

A new government needs some time to get up to speed, but more than two-thirds through its term is too long on training wheels.


Poverty stats government’s shame

April 3, 2019

The nine child poverty statistics that will be used as the baseline for improvement show released yesterday by Stats NZ show all but one have got worse under the current government:

David Farrar compares the stats under National and Labour:

  1. Percentage of children in households with income under 50% of median, before housing costs. 156,000 in June 2008 and 156,000 in June 2017 so no increase under National (rate dropped 0.3%). In June 2018 increased by 27,000 and rate increased 2.3% for Labour’s first year.
  2. Percentage of children in households with income under 50% of median, after housing costs. 329,000 in June 2009 (no data for 2008) and 247,000 in June 2017 so a drop of 82,000 under National (rate dropped 8.1%). In June 2018 increased by 7,000 and rate increased 0.4% for Labour’s first year.
  3. Percentage of children in households in material hardship. 196,000 in June 2013 (no data before that) and 140,000 in June 2017 so dropped 56,000 under National (rate dropped 5.4%). In June 2018 increased by 8,000 and rate increased 0.6% for Labour’s first year.
  4. Percentage of children in households with income under 60% of median, before housing costs. 252,000 in June 2008 and 243,000 in June 2017 so a drop of 9,000 under National (rate dropped 1.3%). In June 2018 increased by 38,000 and rate increased 3.2% for Labour’s first year.
  5. Percentage of children in households with income under 60% of median, after housing costs. 355,000 in June 2008 and 314,000 in June 2017 so a drop of 41,000 under National (rate dropped 4.6%). In June 2018 increased by 27,000 and rate increased 2.2% for Labour’s first year.
  6. Percentage of children in households with income under 50% housing costs for the base financial year. 258,000 in June 2008 and 236,000 in June 2017 so a drop of 22,000 under National (rate dropped 2.5%). In June 2018 increased by 18,000 and rate increased 1.4% for Labour’s first year.
  7. Percentage of children in households with income under 40% housing costs for the base financial year. 156,000 in June 2008 and 178,000 in June 2017 so an increase of 22,000 under National (rate increased 1.6%). In June 2018 dropped by 4,000 and rate dropped 0.4% for Labour’s first year.
  8. Percentage of children in households in severe material hardship. 84,000 in June 2013 (no data before that) and 74,000 in June 2017 so dropped 10,000 under National (rate dropped 1.0%). In June 2018 dropped by 9,000 and rate dropped 0.9% for Labour’s first year.
  9. Percentage of children in households in material hardship and under 60% median income after housing costs. 96,000 in June 2013 (no data before that) and 86,000 in June 2017 so dropped 10,000 under National (rate dropped 1.1%). In June 2018 increased by 12,000 and rate increased 1.0% for Labour’s first year. . .

Who would have thought it? Seven of the child poverty measures dropped under National, one was static and one went up.

And under the Labour/NZ First/Green government that purports to be compassionate and set reducing child poverty as a priority?

Seven of the child poverty measures worsened and only two improved.

What’s behind the difference?

Former Prime Minister and Finance Minister Bill English was determined to search out the risk factors which lead to poverty and the disastrous social outcomes that usually accompany it.

Having found them he used the social investment approach – spending more upfront on helping those most at risk. The higher short-term cost was justified by the expected reduction in the long-term human, social and financial costs should those at risk not be helped.

The compassionate and intelligent response of the Labour/NZ First/Green government would have been to continue and build on what was working.

The failure to do so is this government’s shame.

Instead it sabotaged business confidence, wasted money on policies including fee-free tertiary education and winter heating subsidies for people who don’t need them, and got soft on policies that used both carrot and stick for those who could be working but don’t.

Early days is no excuse, this government is almost half way through it’s first term.

It can’t blame National for what’s going wrong when under it, seven of the measures were improving, one was static and just one was going the wrong way.

The government has only itself and its ideological blindness to blame which will be no comfort at all to the families whose situation has worsened.

Lindsay Mitchell blogs on the causes of poverty:

The Canadian think-tank, the Fraser Institute has just released a paper which suggests an elegantly simple framework in finding three causes of poverty: bad luck, bad choices and enablement. The first two need no explanation. The third is described thus:

We can say that poverty is “enabled” when systems and structures are in place to discourage the kinds of efforts that people would normally make to avoid poverty, i.e., find employment, find a partner (especially if children are present), improve one’s education and skill set, have a positive outlook, and take personal responsibility for your own actions. Ironically, it is government programs (welfare, in particular) that are intended to help the poor but end up actually enabling poverty.

In NZ, many of our current influencers (MPs and media) pooh,pooh the idea that bad choices are responsible for poverty despite this being self-evident. They base their disdain for the idea on a belief that greater systems, for example institutional racism, drive bad choices. Of course when they do this they excuse bad choices and even compensate the person making them. Undoubtedly, most of those sitting on the Welfare Expert Advisory Group would hold views of his nature. . . 

The soft bigotry of low expectations is not a cliche, it’s a fact.

This government’s low expectations are enabling poverty and turning around the improvements that National’s policy of social investment were making.


Does not compute

January 18, 2019

A business offering $400 a day to people willing to plant trees can’t get staff.

Aged care workers are concerned about under-staffing.

But one in 10 people are on a benefit.

That does not compute.

A Taxpayers’ Union report found that benefit sanctions, the help-but hassle approach to welfare reduces poverty.

. . . If the Government wants to reduce child poverty, it should encourage the unemployed and single parents back into work and off welfare.

Our report advocates a help-but-hassle approach that nudges beneficiaries back into work, leaving more to spare for those in genuine need.

If the Government took this approach, it could afford to be more generous, within existing budgets. The difference is that the money would be more targeted to those who most need it. . . 

Is it that simple?

That benefit numbers reduced when National took that approach suggests it is.


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