More than a little stupid

March 29, 2016

Mirror, Mirror on the wall, which is stupidest of all?

Strong arming banks and legislation was rightly met with indignation.

Then came 200 bucks for “free”, funded from tax paid by you and me.

And now you want the flag to change by whatever process you arrange.

If you think you’re going to pick it, you know just where you can stick it.

 

March hasn’t been a good month for Andrew Little, the Labour Party and anyone with hopes they might soon be fit to lead a government.

Little’s attempt to get onside with farmers by suggestions of strong arming banks and legislating to force them to reduce interest rates was met with the derision it deserved.

Then he came up with the proposal of a Universal Basic Income which, as the Herald points out is an idea that’s more bad than good  :

. . . The economy would suffer under punitive levels of taxation, avoidance would be rife, and the benefits would be illusory. . . 

The Taxpayers’ Union points out a UBI would require income tax rates of 50% or more:

A Universal Basic Income which avoided superannuates and beneficiaries being made worse off would require a flat rate income tax of more than 50% or drastic cuts in government services to pay for it, according to a new report released today.

The report, Money for all: the winners and losers from a Universal Basic Income, by economist Jim Rose, examines the Labour Party’s “Future of Work” proposal for a UBI and the more modest proposal by the Morgan Foundation.

A more affordable version of Labour’s scheme, such as that proposed by the Morgan Foundation of $11,000 per annum ($210 per week), would cost $11 billion dollars more than the existing welfare system, while making solo mothers $150 per week worse off. For superannuates, a UBI at this level would see their weekly income reduced by $50.

Taxpayers’ Union Executive Director, Jordan Williams, says:

“We find it startling that the Labour Party would be floating the idea of a replacement to the welfare system that would see those most vulnerable in society being far worse off. A UBI replaces helping those most in need with handouts to the middle-class and millionaires.”

“If you take Labour’s assurances that no one will be left worse off under their UBI, the amount would need to be so high that Treasury’s economic modelling suggests that a flat income tax of between 50.6% and 55.7% would be needed to pay for it.”

“Here is a political party which for years has rightly been telling New Zealanders that current superannuation entitlements are unaffordable. Now they want to effectively extend the same scheme to every New Zealander from the age of 18.”

“The Morgan Foundation proposes to pay for its more modest UBI with a tax on those holding capital. Such a tax would incentivise all those modern and innovative industries Labour want to encourage, to shift off-shore.”

Jim Rose, the author of the report, says:

“We don’t believe Labour have fully considered the consequence of a UBI on labour supply and economic incentives. People would almost certainly work fewer hours meaning that the burden of supporting the programme would be borne by a fewer number of taxable working hours, potentially requiring even further tax increases.”

“Even the Labour Party’s own paper concedes that the taxes that would be required to fund a UBI higher than $11,000 per year may be ‘unrealistically high’. The analysis in the report certainly backs that.”

Key points and conclusions:

• The Morgan proposal would cost $10 billion more than the current welfare system but leave those most in need worse off.

• For a UBI to achieve any reduction in poverty levels, or to avoid it costing those in society who most need help, much higher taxes are required. These reduce the incentives to work and economic growth.

• A UBI which allowed those currently receiving benefits and/or superannuation would need to be at least $15,000 per year (equivalent to the current average level of benefits). To pay for this, Treasury estimate that a flat income tax of between 45% and 56% would need to be introduced (assuming other taxes stayed equal).

• Child poverty is not reduced by a UBI less than $15,000 per year because single parents receive no more income support than before.

• A UBI would likely push the New Zealand economy into recession off the back of the reduced labour supply from the windfall increase in incomes alone.

One of the National-led government’s successes is a reduction in number of people in long term benefit dependency with all the financial and social costs that go with it.

A UBI would reverse the good done by that and encourage more people into welfare dependency.

Not content with these two bad ideas, this morning Little has come up with another:

In the wake of the flag referendum, the opposition leader said he voted against the alternative as it “doesn’t reflect anything about New Zealand at all”.

“I’m pleased to say we haven’t adopted it,” he said. 

Mr Little said the country should revisit the issue “sooner rather than later”, suggesting a flag that “genuinely represents who we are, the diversity that is New Zealand”. 

Doesn’t reflect anything about New Zealand at all? Anyone’s views on the merits of the alternative flag are a matter of opinion but there is no arguing that the Southern Cross reflects New Zealand’s place in the world and that the fern is recognised as a symbol of New Zealand here and abroad.

It was used long before sports teams adopted it and they did so for that reason.

That aside, there is a mood for change but Little can’t lead it.

He voted for the legislation which set the process, campaigned for Labour with a policy to change the flag then, after the election put political expediency before his principles by criticising the process, the timing and the cost.

The time to criticise the process was before voting for it.

If the timing was wrong last week, it can’t be right this week.

And if the cost of the process we’ve just gone through was too high, another process “sooner rather than later” is even higher.

The party partisan part of me is amused by the way Little stumbles from one demonstration that he’s more than a little stupid to another.

The rest of me is concerned that the leader of the second biggest party in government keeps showing he’s ill-fitted to lead the Opposition let alone a government.

 

 


BPS targets

March 15, 2016

The Public Service is working hard to meet the targets the government set for better public services:

Student achievement is ahead of target, welfare dependence continues to fall, immunisation rates are growing and child abuse rates are stabilising, Ministers Bill English and Paula Bennett say.

The Government has released the latest update of the Better Public Services (BPS) Results, outlining their progress against the ten challenging targets set by the Prime Minister in 2012.

The BPS targets include reducing long-term welfare dependence, supporting vulnerable children, boosting skills and employment, reducing crime, and improving public and business interaction with government.

Provisional 2015 NCEA Level 2 achievement results show the proportion of 18-year olds who achieve a NCEA Level 2 qualification has increased to 84.4 per cent, from 74.3 per cent in 2011.

“This means the target of 85 per cent by 2017 has almost been meet, two years ahead of schedule,” Mr English says.

The number of benefit recipients has decreased by 7,245 in a year, largely driven by decreases in Sole Parent Support and Job Seeker support numbers.

“This is good news on two levels because sole parents are getting into the workforce and becoming independent.

“In the last year we’ve reduced the long term cost of benefit dependence by $2.4 billion dollars through welfare reform and better support for beneficiaries to get back to work.”

The reduction of cost isn’t the only benefit. Social indicators such as health, education and crime are better for people in work and their children than for those on benefits.

The most recent results show that since the targets were introduced:

  • the proportion of immunised 8-month olds has increased from 82 per cent to  93.7 per cent
  • there has been a 45 per cent decrease in people being hospitalised for the first time with rheumatic fever, a disease of poverty
  • the trend in the number of children and young people experiencing substantiated physical abuse has flattened, after previously being on an upward trajectory
  • total crime, violent crime and youth crime have dropped 17 per cent, 10 per cent and 39 per cent respectively
  • 52.9 per cent of government service transactions with citizens are now completed digitally, up from 29.9 per cent in 2012

“This has always been an aspirational Government, which is why we set challenging targets in areas that matter to New Zealanders, like ensuring our schools deliver outstanding education, healthcare is reaching those who most need it, and our communities are safe,” State Services Minister Paula Bennett says.

“Without doubt, we wouldn’t be seeing these kinds of results without the hard work and dedication from hundreds of thousands of public servants across New Zealand.

“We’re committed to backing them to do their jobs, which is why we’re spending more on frontline services and changing our structures so agencies can work together more effectively.”

The latest Better Public Service Results update can be found here

New Zealand National Party's photo.


Quote of the day

August 31, 2015

. . . the social investment approach is not about cutting costs in the short term.

It is about working out where to spend money – possibly more money – to save it in the long term.

And it is about spending money only on things that work. –  Audrey Young


Govt report card on BPS

July 7, 2015

The government has released a report card on its Better Public Service targets:

More young people are achieving higher qualifications, welfare dependency continues to fall and Kiwis are doing more of their government transactions digitally, Deputy Prime Minister Bill English and State Services Minister Paula Bennett say.

The Government today published the latest update of progress against the ten challenging targets set three years ago by the Prime Minister.

“There are now 42,000 fewer children living in a benefit dependent household than there were three years ago. That’s more than the combined populations of Masterton and Levin,” Mr English says.

“Today’s results confirm the Government is making continued improvements to some of the really difficult issues that affect our communities and families, however progress in other areas is slower.

“We are getting a better understanding of the most vulnerable New Zealanders, and we’re willing to pay a bit more upfront to change their lives, because what works for the community also works for the Government’s books.”

Mrs Bennett says the BPS results targets were designed to drive a positive change in the public service and signal a willingness to try new things and work across agencies to have more of an impact in people’s lives.

“Significant progress has been made since the Prime Minister first set the targets in 2012,” Mrs Bennett says.

Since the targets were introduced:

  • participation in Early Childhood Education has increased from 94.7 per cent to 96.1 per cent
  • the proportion of immunised 8-month olds has increased from 84 per cent to 92.9 per cent
  • there has been a 14 per cent decrease in people being hospitalised for the first time with rheumatic fever
  • the trend in the number of children and young people experiencing substantiated physical abuse has flattened, after previously being on an upward trajectory
  • the proportion of 18-year olds who achieve a NCEA Level 2 qualification has increased from 74.3 per cent to about 81.1 per cent
  • the proportion of 25 to 34 year olds with a qualification at Level 4 or above has increased from 51.4 per cent to 54.2 per cent
  • total crime, violent crime and youth crime have dropped 17.6 per cent, 9.1 per cent and 37.3 per cent respectively
  • the rate of reoffending has dropped 9.6 per cent
  • there has been a net reduction of 16 percent in business effort when dealing with government agencies
  • 45.8 per cent of government service transactions are now completed digitally, up from 30.4 per cent in 2012.

“We set these targets to stretch the public services to get better results from the more than $70 billion we spend each year,” Mrs Bennett says. “We have always said that some of them will be challenging.

“For example, reducing rheumatic fever remains difficult, but progress has been made. The previously increasing trend for assaults on children has been successfully flattened, but more needs to be done to achieve the target.

“We are making progress in many cases by working with individuals and families to develop services better suited to their needs,” she says.

The government deserves credit for setting targets against which progress can be measured, for working for the most vulnerable and being prepared to spend more upfront to solve long-standing problems.

But these targets aren’t just about the government, they’re about people served by public servants and those public servants who are working to meet the targets.

Education minister Hekia Parata gives credit where it’s due:

Today’s Better Public Service (BPS) update showing the Government is on track to achieve its goal of lifting the proportion of 18-year-olds with NCEA  Level 2 is a tribute to the hard work and professionalism of teachers and principals, says Education Minister Hekia Parata. . .

These targets aren’t necessarily destinations, many are staging posts in a journey towards better public services and better outcomes for the people who use them.

The  report is here.
John Key's photo.


Quote of the day

June 16, 2015

“The government currently invests $331 million each year in this sector, and we need a structured plan to ensure this funding is making a difference for our most vulnerable Kiwis, and that it is being invested in the right places,” says Mrs Tolley.

“At the moment there is little evidence of the effectiveness, or not, of funding in this sector, because up until now most contracts have focused on the numbers of clients receiving services, rather than the effect that the service has on improving the lives of vulnerable people.

“We need to address this so that future contracts are built around positive results and evidence of what is working.”  –  Anne Tolley

Hat tip: Lindsay Mitchell


Quote of the day

June 9, 2015

‘We don’t mind it being more expensive if we get results. The most expensive programmes we have are those where we churn out millions of dollars every year, thinking we’re having an impact when either we don’t or we don’t know.’ . .

‘We often spend money on a service where about 100% of it doesn’t work. So if we can get a return of 5% or something that is working, then we’re well ahead.’ Bill English


Addressing hardship better than measuring manufactured poverty

May 28, 2015

A few years ago a newspaper asked Oamaru clergy to comment on poverty.

One vicar said that he came from South Africa where hundreds of people shared a single cold water tap which made it difficult for him to comment on a town where people drove to the food bank.

The dictionary defines poverty as the state of being extremely poor.

The measuring class—people with tertiary education who spend all their time telling us how much misery there is in our community  have manufactured a new definition – 60% of the median income.

By that measure poverty could only be solved by taking everyone’s money and redistributing it equally and ensuring it stayed redistributed equally for ever.

While gross inequality can be a problem, making the rich poorer will not address the causes of, nor provide a longterm solution to, the problems of the very poor.

This is why Finance Minister Bill English took a swing at critics of the government on ‘poverty’:

“The term ‘poverty’ has been captured by a particular idea of how you measure poverty and a particular solution to it. That is, you measure it relative to incomes, and the solution is mass redistribution.”

Those who use the term “poverty” and “child poverty” in this way have been “admirably open” about their objectives, Mr English told the meeting but it is not a view the government shares.

“We are not addressing that phenomenon. What we are addressing is absolute levels of hardship. That is someone not having enough to live, and we don’t think that is worse just because someone else has a bit more.”

Incomes are only one part of what keeps people at the bottom of the social heap, he says, and other factors matter more.

“What we are addressing is what I think is the kind of communal or moral dimension and the worst examples of it are not purely about poverty. They are about ways of behaving, and I don’t think poverty is an excuse for serial criminality or beating up your kids. But those are parts of the ways of behaving of parts of our community, in my view sometimes made worse by the way the government deals with some of these problems.” . . .

It is not often a politician talks about the moral dimension and that should not be taken to mean that moral problems are the preserve of the poor.

But when Northland GP Lance O’Sullivan says children will be better off away from their homes and the social dysfunction in them, the problem of hardship is not just a financial one.

When National came to government it took an actuarial look at welfare and uncovered the longterm costs of it.

Those costs were both financial and social which is why reducing dependency and addressing real hardship are so important.

It doesn’t matter what you call it, the problem is whether or not people have enough which in turn begs the question how much is enough?

Regardless of the answer, the solution lies in addressing real hardship, as this government is doing, not by manufacturing poverty by redefining it in a misguided attempt to solve it through redistribution.


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