Wednesday, April 16, 2014

Should NZ introduce time-limits on welfare?

Should NZ introduce time-limits on welfare?

That's the subject of a piece I provided to Muriel Newman's New Zealand Centre for Political Debate.

And Muriel asks, Has Welfare Reform Gone Far Enough?

Kenneth Wang says Labour playing the race card

Good for him:
I have lived in New Zealand since I came as a student.  I love this country and have stayed and formed my own small businesses, provide employment and made my part of a contribution to this wonderful country.
I am standing for parliament again because I am alarmed at what has happened to race relations in our country. It has got much worse.
Last year, when Winston Peters launched a vicious racial attack and pointed at the New Zealand Chinese community for creating a 'Supercity of sin', only ACT stood up openly against his attack.
This year Winston Peters again started his campaign against foreigners. Everyone knows, including we Chinese New Zealanders, that his campaign is directed at us.
Sadly, now the Labour Party has joined in, playing the race card, blaming the Chinese for New Zealand's problems. No surprise for me to hear David Cunllife said that he “respects Winston Peters greatly” because Labour is 'going in bed' with Peters!
We need racial harmony, not racial hatred or hostility.
Most of the houses owned by Chinese are not bought for speculation.  It is Chinese parents buying an apartment for their children to live in while studying at University.  Those students pay full fees and contribute to our employment and economy.  How does that hurt New Zealand?

Monday, April 14, 2014

Music trumps reason

I have a new obsession. A saxophone.

In December, I went halves with my daughter on an old saxophone - a Selmer Bundy 11 - from Cash Converters (via a Trade Me auction that escalated.)

With no intention to use it myself, I wanted her to afford an entry level instrument. Her motivation was an accomplished Maori guy busking at Pack'n'Save just before Xmas. She gave him $5 (she's only 15 but has a part-time job) and he told her how easy it was to play and she should try it. That was enough. Plant a seed in her musical being and it grows.

As it transpired, she found it very hard going (and is back on the guitar as I write.)

The instrument was in need of a service. But with some training on clarinet and oboe in my early teens, the muscle memory came flooding back. Soon I could get a passable sound from it and started hunting out music, watching YouTube lessons, researching options for backing and software to transcribe chords. I got the bug.

Then, wah wah wah (as KS would say about Cunliffe's remonstrations) the semi functional sax had a catastrophic malfunction. Well, not really. But for a instrument ignoramus like me it was untacklable and heartbreaking. I had to fix it. A day without playing wasn't a day I wanted to have.

So came a restless night, difficult decision. Invest in fixing the old saxophone, buy a new student model, buy a Chinese knock-off (which are reputedly very good if you can trust the web), rent, rent-to-buy, search out another secondhand quality instrument... Total dilemma.

Only now obvious to me, in a lifelong pattern, I went economically foolhardy over music. The only things I have ever bought which I can't afford are connected to music (we currently have two pianos - one is my most valuable possession - which have been preceded by other varieties, amongst them a grand.)

For some reason circumstances conspired and I found myself at the woodwind specialists in Wellington asking for a brand new P Mauriat to be demonstrated.

Yep. That's beautiful. I'll have it. Jesus, Lindsay. I walked down Willis St wondering about this uncontrolled compulsivity.

But not once have I regretted it. I've even given up the horses to channel all disposable funds that way. Now I have a healthier addiction. Need to play.

But before I go, this was only meant to be a short intro into a story I read from the World Socialist Website tonight.

Heartwarming, but ruined with a caveat by those thicko communists cutting off their noses to spite their faces.
A New York City classical radio station recently completed a drive to collect used musical instruments that will be refurbished and distributed to music programs in the city’s public schools.
A total of 2,500 instruments were collected in the 10-day drive conducted by WQXR that ended on April 7. They included flutes, guitars, clarinets and some less common instruments, including a xylophone, a Chinese pipa, accordions and mandolins.
The number greatly exceeded the original target of 1,000 instruments. The success of the drive undoubtedly reflects strong support for cultural programs in the schools, and for the instruments getting into the hands of interested students who would not otherwise have the opportunity to learn and play...
There is some talk of the instrument drive becoming an annual event. While such a development would certainly be welcome from one point of view, any suggestion that this is an adequate substitute for full and expanded arts funding in the city’s schools, as part of the provision of quality education for the city’s working class majority, must be thoroughly rejected.

NZ suicide rate 'normal'

'Normal' is, of itself, a controversial word. Here, I use it in the sense of being near the average.

I was under the impression the NZ suicide rate was relatively high. But apparently the rate isn't internationally abnormal (notwithstanding a break-down will show age and ethnic disproportionalities.)

Again I draw on the OECD 2014 Society at a Glance data which shows NZ's rate is below the OECD average, notwithstanding many countries hover around a similar rate.

That on it's own must tell us something.

Is Mana advocating cuts to benefits and Super?

Mana candidate John Minto is advocating a universal basic income. To be expected after Gareth Morgan talked to the weekend conference about exactly that. But Morgan's proposal, detailed extensively in The Big Kahuna, sets the tax free income at $11,000 per annum to replace all benefits and Super. Minto also mentioned doing away with WINZ. But $11,000 is well under the rate of Super and vastly under what a sole parent receives.

Morgan acknowledges this:

He openly admits it would also slash the incomes of superannuitants and halve average payments of the Domestic Purposes Benefit. Many pensioners would gradually lose ownership of their homes to pay the capital tax, which could depress the value of all our houses (Morgan sees this as a good thing as it would help young people to buy). Many solo parents on benefits would have to either move into cheaper housing or share with other adults to make ends meet...Solo parents on the DPB, who currently get about $20,000 to $30,000 a year depending on allowances and the number of children, would lose out badly. Morgan argues the state cannot afford to support a single person as if he or she was a two-parent household...Morgan is forthright about cutting payments to superannuitants - "they get too bloody much anyway" - despite huge political backlashes against previous governments who have dared to tamper with the pension scheme.
There are attractive aspects of a UBI eg it incentivises work by getting rid of high effective marginal tax rates.
But it penalises the rich and the poor alike.

A number of classical liberal thinkers have proposed it in the past eg Milton Friedman and more recently Charles Murray, so I try to stay open-minded about it. I recall even (some members of the) Libertarianz Party had a crack at advocating it. But I struggle to see how it fits with their overall principles given forcible transfer of wealth continues.

It seems to me that the UBI is an attempt to improve the complicated, contradictory and corrosive system social security has become. But it continues the subjugation of the individual to the state.

In a way if Mana adopt Morgan's proposal I will respect them for it.  Because they will be telling the poor, their constituency, that in the immediate future they will be worse off, but their ability to improve their lot through their own efforts will be much improved.


This line wasn't reported in the audio I heard.
Mr Minto says it would need to be more than that, although the costings haven’t been worked out.
Thought so.

Just to give you a rough idea of costing if Mana pushed it up to $15,000 (x 3 million people assuming age 18 plus) that's twice MSD's budget.

Sunday, April 13, 2014

More evidence for Mike Treen

Daily Blog poster Mike Treen is persisting with his theory that people are being denied an unemployment benefit despite my data showing the number of refusals was fairly constant between 2005 and 2013. He has repeated his original claim in a new post entitled "Right wing lies continue".
...around the mid 2000s the Labour government introduced a severe case management regime that seemed designed to prevent people accessing their entitlements rather than encouraging them to. The numbers on the unemployment benefit began to fall dramatically faster than the HLFS unemployment number until the gap hit 50,000 in 2008. The international crisis and recession of 2008-10 sent the HLFS unemployment numbers soaring but the new National government’s even more punitive regime managed to keep the numbers on a benefit from increasing anywhere near as fast....I believe that statement to be true and remains true."
I believe that statement to be true and remains true. - See more at:
I believe that statement to be true and remains true. - See more at:

Mike is still of the view that before the mid 2000s everybody who was unemployed received a benefit. People were not denied.

Below is data from a Department of Social Welfare Benefits and Pensions report for the financial year 1989/90. It's a photocopy from my own files and I don't have data for other years.

It shows that 175,736 unemployment benefits were granted and 16,972 were declined. That's an application  refusal rate of 8.8%

In the 2011/12 year 110,244 unemployment benefits were granted and  13,417 were declined. That's an application refusal rate of 10.8%.

These are facts. These are not lies.

Helen Clark likens government to toothpaste

 Being interviewed by Australian media, this remark was made by Helen Clark:
Reflecting on her time in New Zealand politics, particularly towards the end, Clark said it was "regrettable" politics had become something of a consumer commodity. 
"Where you change the brand of toothpaste, you just change the brand of government without giving too much thought to the taste or what it’s going to do."
 What a strange analogy. How many people are really that flippant about who they vote for?

What influences which toothpaste you use? I don't give a rat's to be honest. I buy what someone else asks me to, or what's on special, or whatever is making the most dazzlingly bogus claim. But it's decision that occupies my consciousness for a nano second once a fortnight at best.

Whereas the world I inhabit is constantly considering politics: policy and players.  Whether I am listening to the radio, reading newspapers, blogging, having conversations or just out walking by myself, things political are there.

And I doubt anybody is just not buying toothpaste, so how does she account for the non-voters?

It's a stupid statement. But perhaps that is how Helen dealt with the ousting. Convincing herself that her rejection was just a casual choice to buy John Key because he would make our teeth whiter. Ooooh, I like the blue box better than the red one.

Doesn't it just scream of the contempt in which she holds New Zealanders? No wonder she had to get out of here.

Saturday, April 12, 2014

ACT 2014 policies

Not long ago ACT still had 2011 policies posted at their website. Now they have replaced them with a concise two paragraph overview in each area. Nobody has prompted me to them.

For instance, Welfare and Family:

ACT believes that the welfare system New Zealand developed from the 1970s onward has been a social and economic disaster.  While the intention of reducing hardship was noble, the incentive effects of the system have overwhelmed the resource provision effects.  The policies have led to dependency and indignity for hundreds of thousands of New Zealanders, with an intergenerational dimension.
ACT supports the current government’s initiatives to shift welfare from a paradigm of open-ended provision and resulting dependence to one of mutual obligation.  ACT would continue this process by reducing effective marginal tax rates for those shifting from welfare to work, outsourcing rehabilitation functions to private providers, putting lifetime limits on all welfare eligibility including Sole Parent Support, cracking down on benefit fraud, and scrapping the minimum wage.

There is a problem with putting "lifetime limits on all welfare." A small percentage of people have some form of mental or physical disability that precludes them from self-support, for some or most of their lifetime. But I can agree with lifetime limits on anybody outside of this group.

"Scrapping the minimum wage" would hopefully be accompanied by a taxfree threshold. That could be set at a level which would also enable "reducing effective marginal tax rates for those shifting from welfare to work." Otherwise achieving the second is very tricky indeed.

Here's Education:

ACT believes that education at this level is an investment in human capital that the government rightly makes.  However, the delivery of the service has been captured, at the primary, intermediate, and secondary levels at least, by a providing bureaucracy that limits choice and innovation for the purpose of self-preservation.
ACT believes that state education funding should be seen primarily as an asset of the parent and child, to be used at a school, public or private, of their choice.  ACT would diminish the role of the Ministry of Education in allocating resources, separate the property ownership role of the Ministry from the operations role, make Boards of Trustees more autonomous in their governorship of schools, introduce better mechanisms for State and Integrated schools to expand and contract according to demand, and increase the subsidy to private schools to the extent that it is expenditure neutral. 

Imagine the howls of outrage at the proposal to  increase the subsidy to private schools. But if that enables private schools to expand their rolls with a corresponding reduction in public school numbers (hence neutral expenditure change) that's a progression away from the state's near-monopoly. This policy is the headline grabber. The unions will ensure that.

One more for now. Immigration:

 ACT is and always has been the pro-immigration party.  ACT believes that immigration is a part of our natural heritage, and should continue to be so.  However, ACT also believes that government policy should seek to ensure that immigration remains a good deal for the domestic population.  To this end ACT supports the points system for new immigrants, ensuring that immigrants have readier access to work and do not have easy access to welfare, and lowering the tax burden so that the best immigrants may be attracted.  ACT is also committed to monitoring the emerging literature that suggests immigration may make the domestic population poorer through a process of capital widening.
All good with me but pleased to see that addendum about monitoring the effect on the socio economic status of the domestic population though "capital widening" may be unavoidable and only curbed by limiting immigration. The antithesis of the original  intent. But in general we don't do enough monitoring of policy.

BTW, the OECD 2014 Society at a Glance had a really interesting graph showing how NZ stacks up in terms of its foreign-born population, "our natural heritage". Almost one in four (23.6%) residents was born overseas. Up from about 18 percent in 2001. Very high in OECD terms.

NZ no longer leads western world in sole parent benefit dependency?

It used to. And if you look at the latest OECD graph below (NZ data from June 2013) you'd think it still did.

The brown bar is 'lone parents'. (Unemployment assistance does not feature on this graph as it is considered 'primary'. Check out the link for more information).

For NZ the number is 3.7 percent. Australia follows with 3.3 percent, then Iceland with 3.2%. Before their welfare reforms the US probably would have outdone NZ. (The Ireland bar is suspect. They have quite a high number of sole parents supported by the state. Clue.)

3.7 percent may not seem like a huge proportion but from it flows other matters which are very important like child poverty, ill-health and under-achievement. Matters which will be highly influential in the election this year.

BUT National can spin a good news story here.

By December 2013 the percentage had dropped to 2.8%.

How come?

The balance were moved onto 'primary' out-of-work assistance. Jobseeker Support.

They disappear off the graph.

More dubious inequality claims

Research from the NZ Council of Christian Social Services (or the journalist who wrote the article)  reported in the NZ Herald, relies on 2007 - 2010 data (see below)
The OECD report says household income in New Zealand has suffered a "large decline" since 2008 - NZ was put in the same basket for income as Mexico, Spain, Estonia and Greece.

But our own latest household income data shows rises since:  

  And the rises are across all income bands:


Still as the journalist was happy to rely on outdated OECD data I wonder why he didn't include this one?

Because between 2007 and 2010 inequality actually reduced and that doesn't fit with the story (which just highlights the inherent nonsense in inequality data. If the rich take a hit - surely what the envyists want - and the poorest stay on CPI/wage proofed state incomes, inequality reduces.)