Saturday, July 17, 2010

National - what have they done in government?

Whaleoil has dragged my attention to this weekend's National Party conference and I confess to some quiet amusement at his antics. There will be a few raw nerves ready for the touching today. What it's all over, I am not quite sure but in-party politics is a very real and very dirty game.

But more generally it seems timely to reflect on what National has done since taking office;


Key promised the country he would not raise the qualification age for Super. Stupid mistake. Life expectancies have grown enormously yet the pension is universally available at the same age as it was in 1898.

Working age welfare. The Future Focus bill will make minor changes about work-testing DPB parents when their youngest is 6 and some people on the Sickness benefit. The first completely avoids the real problem. The long-term dependency of young mothers who enter the system as teenagers, predominantly Maori. The unemployed will have to reapply for the dole after 1 year but over 80 percent never reach one year and they should be monitored so closely a reapplication process should be redundant anyway.

Kept Working for Families which they railed loudly against in opposition.

Fell into subsidising jobs for the young. Never works long term.

Kept quiet about the large increase in student allowances as people went into study instead of jobs thereby transferring from the dole onto another benefit.


Pretty much status quo but have reined in spending with mixed success. Reducing home services to the elderly was fraught. Home services keep people out of homes where they will need even more subsidised care. And these cuts are high profile and stir up a lot of public sympathy. Tony Ryall has probably done the best out of all Ministers.


National standards have been highly controversial. Yes, 20 percent of children are failing. So target those children. Not successful schools. Waste of time, energy and money. Seem driven by the right's hatred of teacher unions.

Kept student interest-free loans which they railed against loudly in opposition.


Trying to turn NZ into a 'soft' police state by increasing police discretion. Non reversal of the very unpopular anti smacking legislation. Introduction of on-the-spot DV orders, requiring DNA swabs from non-convicted people, three strikes which encompasses non-violent crimes, patch bans, looming alcohol clampdowns, upping war on P, stupid comments about the economic benefits of building prisons, car crushing, etc.


ETS - which they railed against loudly in opposition. This will be a very hard to handle election issue next year. Alienates their usual rural rock-solid voting base. Could lead to the formation of a new farmer's party which could have the effect on National that the Maori Party had on Labour. Stupidest action since in government.

Mining. If they actually get on and do it, one of my few ticks. But picking 'scared' places like Great Barrier was stupid and risks turning the public off the whole idea.


Small tax improvements soon to be cancelled by rise in GST.

So just a once over lightly but I think I have covered most of the things that the non-political joe-average notices.

God knows why they are riding so high in the who-would-you-vote-for-tomorrow polls. As always, I would love to know how many people would join me in the 'don't know ' group.

Friday, July 16, 2010

Working For Families evaluation

A Working For Families evaluation was published at the MSD website 2 days ago.

What does it cost?

The WFF changes affected 382,500 families with dependent children and cost an additional $1.5 billion in the year to March 2008 compared with the year to March 2004

What effect did it have on sole parent employment?

In the quarter ended June 2007, there were an estimated additional 8,100 sole parents engaged in some paid work as a result of the WFF changes, and increased numbers of sole parents were working 20 hours a week or more. Sole parents’ periods of benefit receipt were shorter and sole parents previously on benefit were staying off benefit longer. In 2007, two out of five sole parents who were not employed considered themselves available to work.

A more recent analysis suggests the economic downturn in 2009 has eroded most of this impact. The growth in Domestic Purposes Benefit numbers during the economic downturn was due both to an increase in grants and to a decrease in cancellations.
The growth in the number of grants is equally distributed between those who have not received a benefit in the previous four years and those who have.

What effect did it have on mothers (usually the 'second earner') in couple families?

Although not an objective of the reforms, the WFF changes gave couple parents greater choice about working and caring for their children by making it easier to manage on less income from the labour market. Families could reduce their hours of work or take lower paying jobs and have their income topped up by WFF Tax Credits payments. The WFF changes also reduced the net return from additional hours worked for those families whose payments were abating. Although there was no impact on the total hours second earners in couple families were in paid work, 9,300 fewer second earners in couple parent families were in paid employment in the quarter ended June 2007 due to the WFF changes.

What effect did it have on child poverty?

The percentage of children living in poverty, using a 60% measure relative to 2004, dropped by 8 percentage points due to WFF. Without the WFF package, New Zealand’s child poverty rate would have continued to climb from 2004, most likely reaching around 30% in 2008.

In the scheme of things it's a lot of money for arguable gain.

Wednesday, July 14, 2010

Another Mickey Mouse makeover for the NHS

Based on the information relayed by the Independent this new makeover for the NHS, the "sixth major reform of the service in 20 years", looks as likely to succeed as all the others. Essentially it is about shifting the management of the budget from 302 Primary Care Trusts (conceptually similar to NZ's PHOs) to groups of GPs, and allowing patients to register with any practice they like.

Why does it look unpromising?

Groups of GPs organised into consortia are to be given freedom and responsibility for buying care from local hospitals and other providers, including private organisations, in a major switch of purchasing power from central management to the surgery.

There's that freedom word again. Getting a lot of that out of the UK at the moment.

But read on;

"GPs can't generate a surplus and pocket it, nor if they fail will they become personally liable."

If the GP does not have the freedom to make a profit if he runs an efficient service and he does not have any responsibility for losing money if he runs an inefficient service he doesn't have freedom and he doesn't have responsibility. He's still a semi-public servant on the tax-funded payroll, albeit highly trained.

But what is the problem they are trying to fix? Rationing, waiting-lists, lack of patient choice.

Say you had a car, most of us do. It periodically needs a check up and sometimes gets sick. Imagine the government holds the funds for the provision of these services. The funds are distributed via Primary Car Care Trusts. My local mechanic must apply for the funding to fix my car or arrange for it to go where it can get fixed. I don't have to pay him directly because I already paid him through my taxes. Great. Except there is a really long queue to get my car in because servicing and repairs are 'free'. And then when I do eventually get a slot it needs electronic work that he can't do and there's a new queue to join for that 'free' service. I am going to be walking or bussing it (although the buses are subject to the same shortages) for some time.

Based on this latest brilliant idea, giving the mechanic the 'freedom and responsibility' to deal direct with the ancillary suppliers, still publicly funded so 'free', will make the queues go away. And the government says I can now start going to other mechanics if I want to, which will also make the queues go away. But why would I want to? The next mechanic has no incentive to be better than the first. He's just working for the government (notwithstanding he has to fund his own premises and overheads either from what they pay him or what they allow him to charge me) with no prospects of becoming more profitable or going out of business. What's changed?

Tuesday, July 13, 2010

Colin James speculates

On the eve of a National Party conference (? searched '2010 National Party annual conference' on the Nats website and found nothing) Colin James speculates;

Key's moderate, Howard-style, bit-by-bit-term-by-term National-leaning policy evolution should be in tune with a party that went through 30 years of seesawing positioning and wants to settle back into long-term government commanding the centre.

There are two complications to this comfortable scenario.

One is the structure of the next government. This term Key has a super-majority, with ACT to support some measures and the Maori party to support others and deliver some Maori voters.

If in the next term National needs both parties for a majority (likely if, say, Labour gets 38 per cent and the Greens 6 per cent), managing their antithetical positions to pass contentious legislation will be very challenging -- or paralysing.
Even if there is a super-majority again (a real possibility) [my link insertion] can Key keep both in the tent?

He has given the Maori party some big mana wins and whanau ora. There is not much more mana he can deliver without upsetting conservative National members and voters. Whanau ora has potential to embarrass if not very tightly managed.

On the other side, Rodney Hide has had some big wins in deregulation and local government this term plus some totemic wins. What can Key give him in a second term that doesn't scare the centre? (Might Hide look elsewhere to continue his career: for example, the Auckland mayoralty in 2013?)

And all the while, the economy will not be flying high and might even have another bad turn, given the debt-driven turmoil and huge uncertainties in the global economy. The 2014 election might look grim. Will Key want to risk a loss?

The point is that so far Key has not hit any big bumps in the road nor has had to make any really hard decisions. That has maximised the openings in the clouds for his sunny personality to shine through on his party.

So it will shine this coming weekend. And his faithful will bask.

Interesting observation about ACT and Rodney Hide. I struggle to see how ACT can survive 2011. Rodney can, but the party? What can they ask for policy-wise? The public perception is that law and order, welfare, education and health are all undergoing reform. Could they get votes on repealing the ETS? And is it politically tenable for National to entertain kowtowing?

Still, as they say, a week is along time in politics - let alone a year.

Collins and economic nonsense

Talking up the economic benefits of building prisons is a mistake.

Whatever the government spends building and staffing them is a loss to the private sector elsewhere.

This is illustrated by the 'broken window' fallacy written about by Henry Hazlitt;

Hazlitt noted that "everything we get, outside the free gifts of nature, must in some way be paid for." Government spending ultimately comes from taxes. What is seen is the benefits of the spending, and often they are truly benefits to some people. But what is not seen is the goods that would have been bought had the workers not been forced to pay the taxes from their wages. The public as a whole loses, because the gain to some is less than the overall cost to the taxpayers and consumers.

To illustrate this he developed the broken window example;

If someone throws a stone into a shop window, the owner needs to repair it. This puts people to work and increases total output. Since this creates jobs, would we be better off breaking lots of windows and repairing them?

Substitute Collins' claim;

If someone commits an imprisonable crime, they need to be locked up. This puts people to work and increases total output. Since this creates jobs, would we be better off breaking lots of laws and locking people up?

We know the answer to that.

At best what Collins is trumpeting is the benefit to the recipient of government redistribution. But in the case of crime and prisons, the loss of the taxpayer is even greater than usual because, unlike a simple broken window, crime incurs many other costs along the way.

What Collins is pushing here is complete statist socialist claptrap.

Monday, July 12, 2010

Big blooper about being behind bars

My anti-BS siren just went off when I read the opening sentence from a lead item on Stuff this morning;

Kiwis behind bars in many countries

Fifty-seven New Zealanders are behind bars in other countries.

There are over 800 people behind bars in Australia alone (prison bars that is.)

I don't have the time to check out other countries now. The soccer is about to start.

But wouldn't any thinking person have looked at that figure and thought, too low. Way too low.

Sunday, July 11, 2010

More power to Prast

Auckland mayoral candidate, Simon Prast, is a man who understands that drug prohibition only makes matters worse. That is the primary line he has to push. Avoid all the other distractions like drugs are bad for people - agree, for some they are, but they will use despite prohibition. Drugs cause people to commit crime - agree, yes they do, but predominantly because of their illegal status.

I have just finished reading The Spell of Morpheus about drugs and mothers in a NZ city (actually Dunedin but under a fictionalised name). The author interviewed ten mothers on the methadone programme and makes the astute observation that this programme is essentially about protecting drug users from the problems of prohibition. My own research satisfies me that few are actually graduating the programme drug-free. So what else is it for but reducing the ill-effects that criminalisation causes?

And I like the way Prast is highlighting the hypocrisy of government and other self-righteous chest-thumpers. The whole area of drug use (used in its broadest sense) is an inconsistent, unjust, mishmash and the laws as they stand should shoulder far more blame for dysfunction and death than the drugs themselves.

It'd be interesting to hear what the Local Government Minister makes of Mr Prast's stand. There is someone else who, I suspect, has sympathy with the developing call for an end to this stupid war on drugs. The difference is Mr Prast has nothing to lose.