Invitation to discussion on poverty

July 2, 2014

The Maxim Institute’s paper The Heart of Poverty is an invitation to discussion about the problem:

The paper in summary…

1. The Problem of Poverty—and why we need your feedback on this paper

– We still have a persistent poverty problem in New Zealand today, and not for a lack of debate, dollars, or desire to turn it around. But what exactly do we mean when we talk about poverty? Standing defiantly in the way of a clearer understanding of the nature, extent and causes of poverty—and life-changing solutions designed to combat it—is an underwhelming public discussion. Debates are riddled with caricatures and distortions that often confuse more than they illuminate— we tend to talk past each other rather than helping each other.

– Poverty has many faces; it is complex and multi-dimensional. Given this context, it is unlikely that a “silver bullet” solution exists. Before coming up with the equally complex and multi-dimensional responses needed to tackle poverty, we first need to understand, define and measure it better. Together, we need to have deeper, more meaningful discussions about what poverty is and what we should do about it.

– We see this paper as our starting point for stimulating and informing the current debate about poverty in New Zealand today. It is a personal invitation for you to join us in the conversation , and your input will flow into our longer journey towards understanding the causes and consequences of poverty, and eventually advocating for policies that will hopefully give struggling New Zealanders the help they need and deserve.

2. Understanding Poverty

– Poverty is multi-dimensional; it has both physical and emotional aspects, and at its core is about unacceptable hardship. Poverty is unacceptable. We have a moral imperative to do something about it. – Whether we recognise it or not, what we value drives what we do; we are all swimming in ideological waters whether we’re aware of it or not. Despite calls to cast aside partisan politics or pragmatically focus on “what works,” political and moral discussion is as necessary as it is unavoidable. Instead of arguing whether values or ideas matter, we should be arguing which values matter.

– Values inform competing ideas about well-being—what a good life looks like in New Zealand—and what we need to participate in this good life. While there is serious disagreement about the nature of poverty, there is more of a consensus about what we need to participate in society, potentially bridging this divide. – With differing perspectives on justice and the roles of the state and the market, ideologies like liberalism and social democracy have been influential in founding and building upon New Zealand’s welfare state. Ideas about well-being and needs are filtered through ideologies with particular conceptions of justice , and finally channelled through the welfare state, out-flowing in policies to help New Zealanders living in unthinkable hardship.

3. Defining Poverty – Defining poverty is about distinguishing between those who are poor and those who aren’t. – A serious point of contention arises between those who consider poverty to be absolute and those who consider it relative—between the “less-well-off ” in richer nations and the “life-and-death” struggles found in developing countries.

However, poverty is both absolute and relative. It is absolute in that there are certain reasonably universal needs that all humans have, and to be without them is to live in a state of unacceptable hardship; it is relative in that different societies in different times impose different needs upon people that must be met in ways specific to their society and time.

– Following this relationship between needs and resources, we define poverty as: an unacceptable situation where a person’s way of life falls below a decent minimum standard of a particular society at a particular time, and a lack of resources to rise above that situation.

4. Measuring Poverty

– It’s vital to measure poverty so that we can track how poverty is impacting people’s lives and how we are responding to it. Measurements are signposts that point towards, and attempt to quantify, the condition described in the definition. Like definitions, there is no one universally accepted way to measure poverty.

– There are two main theoretical approaches to measuring poverty: income thresholds and living standards. Income thresholds focus on inputs: income as a resource available to avoid hardship. Living standards on the other hand focus on outcomes: actual experiences like lacking a raincoat or two solid meals a day. These approaches identify similar proportions of the poor in New Zealand, however those who have a low income are not necessarily those who are materially deprived.

– Eight ways of measuring poverty are assessed and discussed in our paper. All tell related yet distinct stories. Measurements can and should be used together and where possible tracked across time to paint a more comprehensive picture of poverty than a single measure ever could. Qualitative research can complement these measurements to help capture what it means to be poor.  . .

The paper is 44 pages long and I don’t have time to give it the consideration it deserves now.

But I’ve read enough to believe it needs a wider audience and am using this post as a starting point.

 


Tax Tracker

May 15, 2014

The Maxim Institute is launching a free Tax Tracker web app at 6:00 this evening.

. . . The plan? An easy to use, mobile compatible tool giving New Zealanders a much-needed sense of scale in one click.

Simply enter a salary figure, hit ‘GO,’ and find out how much income tax you will pay this year, and how the Government plans to use it with an instant, individualised “tax receipt” based on today’s hot-off-the-press numbers.

What’s new? We’ve added a feature to this year’s Tax Tracker where you can toggle to compare how Government spending has changed on your tax receipt between the 2013 Budget and today’s new figures. . .


Baby bribe threshold higher than $150,000

January 29, 2014

Giving welfare to a couple earning up to $150,000 a year is bad enough, but now the details of Labour’s baby bribe are being released we find that people earning up to twice that could qualify.

. . . Labour leader David Cunliffe has confirmed that the income threshold would apply to what a family expects to earn in the year ahead, not what they earned in the year before the birth.

Under Labour’s policy, it is possible that families earning well over $200,000 before the birth of their child would be eligible for the benefit. . . .

Take a couple each earning $150,000 a year before the baby is born.

The woman takes paid parental leave – extended to 26 weeks under Labour – and when it runs out decides not to return to work until the baby is at least one.

They will already have received the highest possible paid parental leave payments and will now be eligible for the baby bribe of $60 a week for the next 26 weeks.

That is an extreme example but incomes well below this are still too high for welfare.

Labour is a fan of the so-called living wage of $18.40 an hour which is about $38,000 a year.

No-one would call that wealthy, even with what working for families would add on top of that.

But it is by the proponents of the living wage say it is:

. . . the minimum wage necessary for a worker to survive and participate in society. It reflects the basic expenses of workers and their families such as food, transportation, housing and child care.

If just over $38,000 a year, without the working for families supplement on top, is enough for a family of two to survive and participate in society, why is Labour extending welfare to people earning up to $300,000?

Had they offered $60 a week to people earning up to the so-called living wage it would have been difficult to argue against.

Even if they’d extended it to a family on $50,000, who currently pay no net tax if they have two children thanks to working for families, opponents would have found little fertile ground on which to sow their criticism.

But giving welfare to people on well above what Labour accepts as enough, even if there weren’t more pressing needs for taxpayer funding would be questionable.

When there are so many higher priorities, including helping vulnerable children and giving them the best start possible, the policy is irresponsible and show a reckless disregard for public money and those most in need.

It’s easy enough to criticise a policy from which I wouldn’t benefit, but at least one potential recipient is principled enough to say it’s wrong:

Dr. Jane Silloway Smith, Research Manager at independent think tank Maxim Institute and soon to be mother of two, questions how helpful Labour’s Best Start for Children package—and an extension of paid parental leave as indicated by National today—are, calling them poorly targeted to the problem of child poverty and a waste of money.

Smith says: “While there is little doubt that a child’s experiences and care in the first few years of life are vitally important, it’s hard to see how Labour’s intended spending will have as profound of an impact on child poverty as they anticipate.”

“My husband and I are both working, and I am seven months pregnant with our second child. We are a family who would benefit under Labour’s Best Start for Children package—but we shouldn’t.”

“Children are expensive even in two professional-income households like ours, but my husband and I are fortunate enough to be able to handle that financial burden and still be able to make decisions that are in the best interests of our family. Fourteen weeks of paid parental leave are nice, and getting even more leave and $60 a week in our new baby’s first year would be appreciated, but it’s far from necessary in cases like ours.”

There will be some Kiwi families who will truly be helped out by the additional cash. But for so many others the money will be wasted either because the family doesn’t really need it or because there are bigger issues in the family home than mere money can solve—drug and alcohol addictions, lack of family or community support, or volatile adult relationships.”

“Governments have a limited budget, and as a policy researcher, I hate to see any government spending its money on pointless programmes. There are families out there who can’t make the choices that my husband and I can make for our family. So instead, it would be great to see Labour target their spending on families who could really use the money, while diverting the savings from handing out upper-middle class welfare to invest in community initiatives and programmes that have demonstrated an impact on the bigger issues some families face.”

“If any government is going to hand out money, I’d like to see them putting it towards helping families in real need, rather than simply padding the bank accounts of families like mine.”

The necessity to address real need is the point of opposition to Labour’s policy.

New Zealand is facing many pressing needs and it is those to which any spare money should be directed, not welfare for people well able to look after themselves and their children.


Time for four-year terms

July 16, 2013

New Zealand is ready for four-year parliamentary terms.

This is the view of the Maxim Institute and one with which I agree.

In a submission (see attached) to the Constitution Advisory Panel released today, Maxim Institute Researcher Kieran Madden argues that a fixed four-year term strikes the right balance between effective government and governmental accountability.

“Voters should have regular opportunities to tighten the reins on their elected representatives, but this must be balanced with the need to allow governments sufficient time to carry out what they promised and respond to problems as they arise,” says Mr Madden.

“With the changes to our constitutional landscape brought about by the move away from first past the post and the powerful majority governments it tended to produce, it is now time to look seriously at shifting the balance to allow more time for governments to govern well.”

“MMP has made enough of a difference to the way the powers of government are distributed and the legislative process carried out that the time is now right for Kiwis to decide this question at a referendum,” says Kieran Madden. . .

Three-year terms are short by international standards.

Even though one-term governments are rare, an election every three years slows down progress, adds uncertainty which impacts on growth, reduces productivity in the public sector and adds costs.

A four-year term would require less public money than three-year terms and it would also  demand less from volunteers who make a significant contribution to election campaigns.


Fair empty word in MMP debate

November 23, 2011

With just a few days to go until the referendum on the electoral system too many people are confused about the options.

That isn’t helped by the poor quality of the debate.

The Maximum Institute is doing its best to address that and says:

After a couple of weeks of the referendum campaign hitting full throttle, one gets the sense that we are watching a version of a beauty pageant, where the voting systems are getting primped and preened to look better than they are—their oddities and quirks sprayed over with fake tan. This is a far cry from what the referendum debate should be about.

Like everyone else joining in this debate, we have an opinion about which system New Zealand should have. But our bigger concern is not that people vote the way we would like, but rather that voters actually understand what type of representation and parliament the voting systems produce.

The systems are not just mechanically different. They produce different outcomes based on different understandings of good political representation. To chuck stones at FPP or PV for not being proportional is like blaming your local burger shop for not serving sushi—you are asking it to be something it was never meant to be. Likewise, blaming MMP and other proportional systems for producing coalition governments misses the point that that is exactly what they are designed to do. New Zealand’s voting systems debate needs to focus on how we understand parliament and representation, rather than just sloganeering.

One of the biggest divides between the different voting systems is whether they are proportional or majoritarian. Proportional systems, like MMP, are meant to ensure that parties get the same proportion of seats in parliament as the proportion of votes they received across the country, while majoritarian systems, like FPP, operate on the principle that whichever party has a majority of the seats in parliament should be able to govern. Neither is inherently bad or “unfair.” They are designed to produce different outcomes, and both have their strengths and weaknesses.

Advocates of proportional systems say that they are “fairer” because of an assumption that the composition of MPs elected to parliament should mirror the representation of interest groups in society. MPs are seen as delegates who govern according to the wishes of the identity group whom they represent. But this is not the only way to think about representation.

The other model of representation is the “trustee” model, which assumes that MPs are supposed to use their discernment to make decisions on behalf of the whole community who they represent, including those who did not vote for them. Under this model, the local electorate MPs are directly accountable to voters through their electorate vote, and the representation of local electorates matters more than how proportionate each party’s representation in parliament is.

Each voting system contains elements of both models of representation to varying degrees, but no system can provide for everything. They are all trying to strike a balance. The advantages of each system generate disadvantages that ought to be acknowledged. For example, an advantage of proportional systems is that they can produce coalition governments, which can reduce one party’s ability to ram through laws on a whim. The disadvantage is that voters can find it hard to know exactly what policy programme they are voting for, and it cannot be predicted precisely which parties will form a government.

Another advantage of proportional systems is that they are supposed to allow for the many different groups in society to have a voice in parliament, in proportion to how much support voters give them. But a proportional parliament does not necessarily mean that all parties or interest groups have a proportional influence on the laws that are made. It is possible for a minor party such as ACT—with 3.7 percent of the vote—to be in Government, while Labour—with 33.9 percent of the vote—is in opposition. ACT gets to help set the government’s agenda, while Labour does not. To borrow from Animal Farm, some politicians are more equal than others.

Majoritarian systems on the other hand are prized for their ability to produce a clear and stable government. MPs are also directly accountable to electorates who can vote them out if they are not performing. Yet majoritarian systems also have their limitations. They can mean a big proportion of the population—sometimes more than 50 percent—end up with a government they did not want. This is because election results are determined by which candidates win their electorate seats. Even though a party can win a significant share of the popular vote, it will not have any seats in parliament unless it wins a majority of the vote in specific electorates. Minority voices can struggle to be heard, and while majoritarian systems give voters a clear government and opposition, that also means there is little need for compromise and negotiation in making laws.

Does all this mean we might as well give up? Are there are no good systems on offer at the referendum? Not at all. The point is just that we need to look at the merits and draw-backs of all the systems and determine what we prefer. Deciding how to vote in the referendum should not just be an issue of slogans and system mechanics. It should be about asking how we want parliament to work and what sort of representation we think is best for New Zealand. The debate needs to move to this level.

None of the systems is perfect and whether or not they are fair is very much a matter of opinion.

Under MMP parliament better reflects the way people voted but it  comes at the cost of more power for parties and poorer representation for people.

You could call placing more power in the hands of parties, most of which have little if any more than the 500 members required to register, a lot of things but you can’t call it fair.

There is more on the debate at kicking the tyres.


Know what you’re voting for

November 12, 2011

The Maxim Institute has acted on its concern about voter ignorance by developing a website, NZ Votes.Org  to educate people.

In 2011 the nzvotes website will function as a portal to a whole lot of resources that will help people learn about the candidates andparties they have to choose between at the election. It will also link them to resources to find out about the voting systems on offer in the Referendum.

Along with this we have created a few videos to help kiwis recognise the need to pay attention to politics and learn about what the different parties stand for before casting their vote.

The website is NZ Votes.Org.

The videos are here and  here.


The case for SM

October 28, 2011

Next month’s election will decide who governs for the next three years.

The referendum on the electoral system which is to be held the same day could determine how we’re governed for decades.

The anti-change movement has been more vocal until now but people encouraging a vote for change are beginning to speak out.

Jane Clifton has an MMP guide in this week’s Listener  (it included a an error which Graeme Edgler corrected). Sir Geoffrey Palmer put the case for MMP and Roger Kerr put the case for change.

The Maxim Institute which published Kicking The Tyres Choosing a Voting System for New Zealand last month has today issued two more papers.

The first is “A Better Mix: Why SM strikes the best balance and should be New Zealand’s voting system.”

The second is   “Enhancing MMP: How to improve New Zealand’s current voting system.”

They correctly point out all systems have their faults:

“There is no perfect voting system. Deciding which system is best for New Zealand involves making trade-offs among a whole range of criteria—local and interest group representation, legitimacy, accountability and stability of government being just a few of those criteria. After evaluating all the systems on offer at this year’s voting systems referendum, we believe the system that strikes the best balance is SM (Supplementary Member),” says Steve Thomas, Researcher at Maxim Institute. “We also believe that if MMP is kept it could be improved in several ways.”

“There are two broad types of voting systems: majoritarian systems and proportional systems. SM, like MMP, mixes elements of both majoritarian and proportional voting systems. But where MMP is designed to be more proportional, SM is the opposite—it generally produces majoritarian outcomes,” says Thomas.“Mixed systems are a good option for New Zealand, as they allow people to vote for both a candidate and a party to represent them, but we think that SM is the better option.”

“Majoritarian systems sometimes get a bad name, with a perception that proportional systems produce‘fairer’ outcomes. This argument sounds intuitively right, but it does not actually stack up. Majoritarian systems, like SM, can produce a ‘fair’ outcome because the result is representative of which parties most people voted for in their electorates—it all depends on what is meant by ‘fair.’”

“We also think that SM would be beneficial for representation. There would be 90 electorate MPs if SM were used in New Zealand, so it would be weighted more towards electorate representation than MMP is. We think that electorate representation is important for providing a direct relational connection between parliament and local communities. Parties and list MPs can only provide for this kind of representation indirectly. The 30 list MPs that there would be under SM would still enable various non-geographic communities, such as ethnic, minority and interest groups, to be represented in parliament.”

“Under SM, it would also be more likely that single-party majority governments would form. This would provide for stable government and bring clarity of focus to government policy, as the major parties would not have to make policy concessions to the minor parties in return for their support. The reduced influence of the minor parties would decrease the instances of interest group politics unduly influencing parliament and the government’s agenda. Obviously this has other negative trade-offs but we believe that, on balance, this is the best way to go.”

“Proportional representation is not the only factor that should be considered in choosing a voting system. When all factors, like legitimacy; effectiveness and stability of government; representation; accountability; and the need for opposition and oversight are taken into account, we believe that SM strikes the best balance.”

I voted against MMP and opted for FPP in previous referenda.

I don’t want a return to FPP but I do want change from MMP and agree with the points made above.

Electorates are far too big under MMP, reducing representation for people under a system which increases the power of parties.

SM gives, more and therefore smaller, electorates while still allowing for an element of proportionality and a better chance for the wee parties to be represented than FPP.


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