What’s a necessity and who pays?

August 4, 2016

When I was in the UK in the early 80s women were up in arms over the imposition of VAT on tampons when pipe cleaners were exempt.

Fair enough.

One is a necessity the other is not.

Fast forward more than three decades and students want universities to supply free sanitary products to students in the same way they provide condoms.

New Zealand Union of Students’ Associations president Linsey Higgins said it had heard from a number of students from across the country about the compromises they were making due to not being able to afford sanitary products.

Ms Higgins said students were having to use substitutes, such as toilet paper, or staying home while on their period, and were missing out on their education.

She said universities could use their negotiating position to buy in bulk to provide the products for free.

“We would like to see menstrual products having the same pride of place that condoms do in tertiary environments, for example in fish bowls, in medical centre receptions or student association receptions, so they’re not hidden from students and it’s not a shameful thing.”

“The more we can minimise and destigmatise menstruation, the better off we are.” . . 

You could argue whether or not universities should be supplying condoms but they prevent disease and accidental pregnancies both of which impose a cost on individuals and the taxpayers.

Neither of those apply to sanitary protection, the benefits of which are the individuals’.

People on very low incomes struggle to afford enough food and other necessities. Sanitary products are necessities and aren’t cheap.

But students have choices.

They can work part time during the term and full time in holidays to supplement student allowances and loans.

They can study part time and hold down part or full time employment.

They can defer study while working to save enough to get them through their studies.

Every dollar universities spend on something like this is a dollar less available to spend on what they’re there for – providing excellent tertiary education.

If universities are expected to provide free sanitary protection should they also provide free razors for men who can’t afford to shave?

Managing those who can’t manage selves

July 12, 2016

Act MP David Seymour has a suggestion to help people who have children while on a benefit:

. . . You might think that if you’re on a benefit it’s a bad time to bring a child into the world.  You’re probably like the overwhelming majority of New Zealanders who think it proper to wait, save and sacrifice before having children, in a comfortable environment, then stop when you feel your family is at a size you can support.

Chances are you don’t begrudge taxpayer support for people who fall on hard times, need to escape an abusive partner, or have any of a dozen other circumstances.  But here is the interesting thing: being on a benefit seems to make you more likely to have children.

Only 10 per cent of working-age people are on a benefit, yet 20 per cent of children are born into families receiving benefits.  In the six months to March 2015, 6000 babies were added to existing benefits.  That’s enough to raise the hackles of those paying tax while preparing to have their own family, but worse is the outcomes for the kids involved.

Benefits seem to make people have kids early, a key risk factor for maltreatment.  As of 2015, in the general population 22 per cent of births were to mothers 24 or younger, but 44 per cent of beneficiary caregivers (mostly mothers but sometimes fathers) with a child born that year were 24 or younger.

The ultimate result has been calamity for New Zealand kids.  University of Auckland researchers have found that, of under-fives who faced maltreatment, 83 per cent were on benefits before age two. . . 

That doesn’t mean being on a benefit causes people to abuse children but it does show those on benefits are more likely to be abusers.

Out of fairness to the taxpayer and the children, we need a new deal.  It’s simply not good enough that the Government taxes some people, who are often waiting, saving, and sacrificing for parenthood, so that it can pay others to have kids earlier.  It’s absolutely unacceptable when we know this policy is enlarging child poverty and abuse.  We need to put children first.

If you’re 18 or younger, you can’t get an all-cash benefit from the Government.  Instead it pays rent, power, and basic necessities before giving the remaining entitlement in cash.  A compassionate government should attack child poverty by extending Income management to any parent who has additional children while on a benefit.

The message would be simple.  If you want to have children while receiving a benefit that’s fine, but the Government will give entitlements in a form that puts the needs of the children first.

Beneficiaries get more money when they have more children.

Providing income management for those who have additional children while on a benefit will help them budget and provide for their families.

This isn’t beneficiary bashing.

No-one can blame children for their parents being benefit-dependent. If people can’t manage themselves and the state is paying them to look after their children it also has a responsibility to ensure that they do.

Meanwhile in other news

May 12, 2016

While the Panama papers and examining the entrails of The Bachelor are getting headlines the government books are in a healthier state than forecast:

The $167 million operating balance before gains and losses (OBEGAL) surplus for the nine months to 31 March was $334 million better than forecast, Finance Minister Bill English says.

Core Crown revenue was $206 million higher than forecast, largely due to core Crown tax revenue being $702 million higher than forecast by the Treasury in December.

These aren’t big numbers in relation to the government’s total finances. But given the global financial position and the impact of low dairy prices, this is an achievement.

This was partially offset by core Crown interest and dividend revenue being $456 million lower than forecast.

Mr English says because of sustained, moderate growth in the economy, the Crown accounts are in good order ahead of the delivery of Budget 2016 later this month.

“We’ve been successful in turning an $18.4 billion deficit in 2011 to a surplus last year. In Budget 2016 our focus is shifting more to repaying debt.

“Budget 2016 will reflect this Government’s continued commitment to responsible fiscal management. At the same time it will build on the good progress we’ve made over the previous seven Budgets, with further investment in a growing economy and public services.

“We measure success by results, rather than the level of spending.”

It’s not what they’re spending but the impact that spending that matters.

One area that always takes a lot of spending is welfare.

The government is taking the investment approach which means spending more in the short term for longer term social and financial gain.

A report from Deloitte and NZIER says that the investment approach needs to become a mainstream way of working across more of the social sector.

State of the State New Zealand 2016: Social investment for our future advocates broadening the use of the social investment approach to manage New Zealand’s future fiscal challenges and support better outcomes for Kiwis.

NZIER Deputy Chief Executive John Ballingall says the State of the State takes a close look at government finances and the burdens New Zealanders could face in the future.

“A combination of our ageing population, low productivity and revenue growth, and the need to reduce government debt will impose huge fiscal pressures in coming decades – particularly in social spending. More importantly, too many people in New Zealand are experiencing poor life outcomes and too many of their children are at risk of following them,” says Mr Ballingall.

Deloitte partner and public sector leader Dave Farrelly says it’s the sum of these factors which drove us to focus the report on social investment, an approach to funding social services focusing on root causes to prevent the need for these services in the future.

“For example, with social investment the task is not to deliver the next 100 prison beds for the same cost as the previous 50. It’s to remove the need for those new prison beds altogether,” says Mr Farrelly.

“Today social investment is like a start-up – a small number of people are working incredibly hard to bring a big bold vision to life. Tomorrow, social investment needs to become a mainstream way of working,” he says.

In the six months of research for the report, Deloitte and NZIER spoke to some of the most senior and influential leaders in the public, non-government and private sectors – all of whom provided a unique perspective on social investment.

State of the State proposes a package of bold reforms to realise the aspiration for social investment in New Zealand. The recommendations are:

1. Release, every four years, a government-wide statement to define the outcomes and targets for at-risk New Zealanders
2. Establish a new agency to commission specialist social services for people at risk of poor life outcomes
3. Embed the social investment approach to funding quality and sustainability in the new agency’s operating model
4. Enable better access to government-held data and detailed evaluation reports

“We suggest a structural reconfiguration that some will find challenging, while acknowledging we don’t yet have all the answers,” says Mr Farrelly.

“But we must be bold in tackling these challenges today to maintain our way of life in the future,” he concludes.

Social investment is working and the reforms Social Development Minister Anne Tolley is promoting will do more.

Trans Tasman notes:

. . . The reform being pushed through by Tolley is perhaps the most far-reaching undertaken by the Govt and could stand as its greatest legacy if it achieves its goals. Already it has made some headway in improving the lives of Maori children who are more than twice as likely as Pakeha children to grow up in households experiencing hardship, and fare worse in most indicators. A report by the University of Otago-based Child and Youth Epidemiology Service shows increasing numbers of Maori pre schoolers are getting early childhood education. There’s also been a halving of school suspensions for Maori students, an increase in immunisation rates, fewer young Maori smoking,and falling hospitalisation rates for Maori children for injuries from assault, neglect or maltreatment. Tolley is understood to have secured an additional funding, probably of the order of $500m in this year’s budget for the reform. . . 

Turning around benefit dependency and all the financial and social costs that go with it will not be neither easy nor cheap but the investment approach is working and it’s a much better story than many of the others which are getting attention at the moment.


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.

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