10,000 fewer on benefits

July 17th, 2013 at 9:00 am by David Farrar

Michael Fox at Stuff reports:

At least 10,000 fewer people are now on a benefit compared with last year, new quarterly figures show.

The figures were released as the third and largest wave of welfare reforms were rolled out by the Government yesterday, although the reduction is being credited to the previous changes.

Yep that drop is pre the major reforms.

“That’s a reduction of more than 10,000 on welfare over the past 12 months and I am particularly pleased that 5600 of them are sole parents,” she said.

If they have gone from welfare into work, that will benefit their family not just financially.


Net tax in NZ

July 10th, 2013 at 12:30 pm by David Farrar

net tax small


This is a fascinating table from a speech by bill English today showing how highly re-distributive the NZ tax and welfare system is. Basically what this shows is that the top 5% of households pay 47% of net tax in New Zealand. Households up to $60,000 income receive more in welfare on average than they pay in tax, Yes, they are effectively paying no tax.

Now I’m not complaining about this too much. I’m happy to some extent to help working lower income families when they have kids to look after. But when political parties complain that we need to hike taxes on rich pricks, then bear in mind that our tax and welfare system is already highly highly re-distributive. The debate should be on how we allow Kiwis to keep more of their income, not how to take more off them.

Bill English noted:

Estimates of net income tax paid by household income, before and after Budget 2010, indicate the system has become more progressive over this period, Mr English says.

Households earning less than $60,000 are generally expected to pay less, in percentage terms, towards net tax in 2013/14 than they were paying in 2008/09. 

Conversely, households earning more than $150,000 are generally paying more of the net tax than they were in 2008/09.   

“It’s appropriate to maintain a tax and income support system that helps low and middle income households when they most need it.

“But people who call for even greater transfers to low income families, or who call for the top tax rate to be raised, need to be aware of how redistributive the tax and income support system really is,” Mr English says.

Income tax rates should be lowered, not increased.

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The cost of breakfast

June 1st, 2013 at 10:00 am by David Farrar

Stuff reports;

It can cost parents less than 50 cents a day to give their child breakfast, but principals say most families who send their children to school hungry cannot afford to feed them.

Really. I’d welcome one solid example of a family who can’t afford 40c a day for breakfast. By a solid example I mean full details of their income and expenditure.

But Hamilton beneficiary and mother-of-two, Ali, says she battles every week to put potatoes, rice and Weet-Bix on the table and petrol in the car with the $38 she has left after rent, bills and loan repayments.

The Waikato Times has found that a basic breakfast of Weet-Bix and milk, peanut butter on toast, or porridge costs between 20 and 39 cents a day per child – between $1.43 and $2.73 a week.

And the DPB pays $295 a week in the hand plus $157 family tax credit is $452 a week. Breakfast for two kids is $3 to $6 a week from that or around 1%.


$293 from Winz, plus $120 rent assistance.


$285 rent. $30 electricity. $60 loan repayments to the bank and people to whom she owes money.

$38 left for petrol, food and unplanned expenses.

They appear to have left out the $157 family tax credit. Did the reporter not ask, or does Ali not mention it, or has she failed to register for it?


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Eight adults, none working

April 27th, 2013 at 3:00 pm by David Farrar

The Herald reports:

A state house with 19 people living in it has been identified as one of the homes receiving more than $100,000 in taxpayer-funded benefits each year.

The Housing New Zealand property in Manukau houses 11 children and eight adults, according to a spreadsheet of the top 50 households which receive the most social welfare payments.

The weekly rent is $87 and collectively the household is getting $2499 in benefits each week – or $132 for each individual – adding up to nearly $130,000 each year.

$2,500 a week in the hand is equal to almost $3,500 gross or $180,000 annualised.

No wonder none of the eight adults have decided to get a job. With an unemployment rate of under 7%, the chances all eight are unable to find a job is miniscule – 0.00000006%.


US Disability Benefits

April 8th, 2013 at 10:00 am by David Farrar

In case you needed convincing about the need for welfare reform, this story from the United States should help convince you.

It was an exclusive story for Planet Money on National Public Radio. It has had great resonance in the US, as it has exposed how great the growth in numbers on disability welfare has been.

Some key findings:

  • 14 million people a month now get a disability check from the Government.
  • In one county in Alabama, 25% of working adults are on a disability benefit.
  • That the proportion of those claiming a disability benefit with a difficult to test problem (back pain, mental illness) has increased from 18% in 1961 to 53% in 2011.
  • That some states have as many as 9% of their adults on a disability benefit.
  • Fewer than 1 percent of those who were on the federal program for disabled workers at the beginning of 2011 have returned to the workforce since then.
  • The disability benefit pays $13,000, just $2,000 less than the minimum wage, plus Medicare so some are better off financially not working.
  • The number of children on a disability benefit has increased seven fold since 1974 to over 1.2 million.
  • If these children with learning or other disabilities get a job, their parents lose the $700 a month disability check.
  • Disability welfare now costs $260 billion a year, and will run out of reserve duns by 2016.

People should remember this story, when Labour and Greens constantly say there is no need for welfare reform in New Zealand. Note that the numbers receiving the Invalids Benefit in NZ has increased eight fold since 1976 from 10,000 to 84,000. Now by no means should anyone conclude this means everyone on that benefit shouldn’t be there. To the contrary I know some people on that benefit who would love to be able to work, or work longer hours than they can. So we need to be careful not to stigmatize those who are in genuine need.

However as the US story shows, the growth in the level of such benefits has been massive, and I encourage people to read the full story about what happens when the incentives to be on welfare are greater than to be in work.

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Why not inform people of whom is right?

March 4th, 2013 at 12:00 pm by David Farrar

Stuff reports:

It’s another case of she said, she said. Labour MP Jacinda Ardern was yesterday bemoaning record benefit numbers during National’s reign.

DPB, sickness and invalid beneficiary numbers were at the highest since records began in 1940, she said.

It didn’t take long for Social Development Minister Paula Bennett to respond with her own gloating statement.

The number of people on the DPB, unemployment and invalids benefits all decreased last year, she said. It seems statistics are everyone’s friend.

Rather than just report that both MPs are claiming different things, it would be nice if the media actually provided the full data and allowed people to decide for themselves.

I blogged yesterday that the numbers cited by the HoS and Ardern were over a year out of date. That’s not opinion – it is fact.

The excellent Stats Chat site also gives people the full data, in graph form. Sadly the number of people who read that site is far far less than those who read newspapers.

Lindsay Mitchell also has some useful fisking of Ardern’s claims.

Ironically Anthony Robins at The Standard is also unhappy with the article. Not for the misleading claims, but because a Labour MP is suggesting that it would be a good thing to have fewer people on welfare!

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Maybe it is the dads that should be sterilised!

February 17th, 2013 at 9:00 am by David Farrar

Joanne Carroll at NZ Herald reports:

One rogue 19-year-old is a liable father to 13 kids to different mums.

A source has confirmed the man is named on the birth certificates of 13 children, and is liable to pay child support for them.

Figures released by the Inland Revenue Department show 943 teenage fathers were liable to pay child support at the end of last year. Some were just 15 years old, and already liable for two children.

A study for Inland Revenue estimates the “average” cost of raising a child to the age of 18 as $250,000. It does not count stay-at-home parents’ loss of incomes or childcare costs. The weekly cost for a low-income parent raising a child is $150 – or $140,000 by the time the child reaches 18.

Sadly he knows that he won’t have to pay for any of them, as I predict he is almost inevitably not working himself. Even if he is, you pay the same for 13 kids as you do for one kid, in terms of child support.

What would be karma is forcing him to live in a home with all the mothers and kids and spend 40+ hours a day changing nappies, feeding etc.


Free contraception uptake

January 31st, 2013 at 1:00 pm by David Farrar

Claire Trevett at NZ Herald reports:

Low uptake negates fears beneficiaries and daughters being pushed into free scheme, says minister’s office.

Only 35 women took up the Government’s offer of free long-term contraception for beneficiaries in the first five months – far short of the number expected.

Last July, Social Development Minister Paula Bennett announced the Government would pay for female beneficiaries and their daughters aged 16-19 to get long-term contraception such as an implant, intra-uterine device or the Depo Provera injection.

She set aside $1 million over four years for the policy – enough to fund thousands of grants covering doctors’ fees and contraceptive costs each year.

This is the policy that saw the disgusting cartoon that compared Paula Bennett to Josef Mengele. Shameful.

However, in its first five months from the end of July to the end of December only 35 women took it up.

Ms Bennett said she was not troubled by the low uptake.

“It’s going as I’d expected. We’re not promoting it so there hasn’t been significant uptake, but we’re looking at advertising it more so people are aware it’s available.”

It would be good for more people to be ware of it, so there are fewer unwanted pregnancies.

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Christchurch jobs

January 8th, 2013 at 10:00 am by David Farrar

There’s been a lot of stories about firms in Christchurch having problems finding employees. One in The Press today is:

Christchurch baker Diane McPherson has had an “absolute nightmare” trying to find staff for the past four months.

One applicant turned up for an interview in pyjama pants, another was texting during the interview and another flicked her tongue piercing in and out of her mouth and indicated she was not prepared to remove it during work hours.

McPherson, who owns the Brumby’s Bakery and Wendy’s Supa Sundaes stores at the Hub in Hornby, said many others did not return messages inviting them for an interview, or, having been offered a job, failed to turn up for work.

How many people in Christchurch are on the unemployment benefit or another work tested benefit?

One applicant for a job at Wendy’s Supa Sundaes decided he did not want the job because he did not want to mop the floors, and another did not want to have to wash dishes. A 22-year-old applicant for a job at Brumby’s Bakery arrived wearing a T-shirt, flannelette pyjama pants and socks, but no shoes.

Obviously trying hard to get a job.

McPherson approached the Christchurch Polytechnic Institute of Technology to see whether any recent graduates were interested, but “not one of them put their hand up”.

The jobs McPherson is advertising all pay $14 an hour or more, with the bakery job starting at $20 an hour.

“I’ve had a couple of guys tell me, ‘Oh, it’s easier on the dole but we’ve got to be seen to be applying for work’,” she said.

And remember some parties want to increase the level of benefits, reducing the incentive to work even more.

McPherson has placed advertisements saying applicants could say when they wanted to work, but has still not found staff.

“There’s a whole different attitude to working. It’s all about themselves and if it doesn’t fit in with what they want to do, they don’t want to do it,” she said.

McPherson is now looking to advertise overseas.

If anyone is on a work-tested benefit in Christchurch for more than say a few months, then there is something wrong.

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They want welfare for millionaires!

December 11th, 2012 at 9:00 am by David Farrar

Ben Heather  at Stuff reports:

A $2 billion Government overhaul, including more state homes and universal child support, is needed to fight child poverty, a report from the children’s commissioner says. …

They include scrapping many benefits for parents and replacing them with a universal payment for every child under 5.

Never ever ever. It is morally and economically wrong to tax people more so you can turn every family in New Zealand into welfare recipients. They want to turn the clock back to the 1970s.

The welfare state should be targeted at families in need. Handing out cash to every family with children is nuts and comes from people who have no appreciation of the fact all those welfare handouts need to be paid for by.

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$60 a week more to be on a benefit

November 9th, 2012 at 6:38 am by David Farrar

Parliament Today reports:

The Income Tax (Universalisation of In-work Tax Credit) Amendment Bill was defeated at its first reading by 61 to 60 with National, ACT and United Future opposed.

This bill sought to make the “In Work’’ tax credit payable to those on benefits.

The Green Party, which sponsored the bill, put pressure on United Future MP Peter Dunne to back the bill to select committee. However Dunne said during the week the bill would remove a financial incentive for beneficiaries to work.

Labour. Greens. Mana and NZ First all voted for DPB beneficiaries to get an extra $60 a week for not working.

As Peter Dunne pointed out, it disincentivises beneficiaries to seek employment. The in work tax credit is designed to recognise that you have extra costs when working such as transport to work, clothing etc.



Labour MPs showing beneficiaries how to budget

September 27th, 2012 at 1:00 pm by David Farrar

I think it is superb that a group of Labour MPs are living on $2.25 of food a day, for a week, to demonstrate how you can eat cheaply.

Their potato and spinach curry recipe should be displayed in all WINZ offices.

I am a bit confused that they are so eager to demonstrate you can feed yourself on just under $16 a week, that they demand increased welfare payments for beneficiary parents. Currently a low income parent gets $88 a week welfare for their first child, and $61 a week for additional children (on top of core benefit, accom supplement etc). Of course you have non food expenses also, but thanks to Grant, Jacinda, Phil, Annette and David they are showing you can have $72 to $45 a week for those other expenses.

I look forward to their other recipes on how to cook for $2.25 a day. Maybe they could publish a book with Muriel Newman on it?

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Again – not given full details

August 31st, 2012 at 10:36 am by David Farrar

Stuff reports:

Auckland schoolboy Peniata Junior Endermann is just 16 years old but already works 25 hours a week to help keep his siblings in school and provide the basic necessities for his family.

The Edgewater College student works from 5pm until 10pm Monday to Friday as a cleaner earning $13.85 per hour.

Between school, his job and homework Endermann puts in 16-hour days.

What great dedication to his family. That is a lot of responsibility for a 16 year old, and ideally no 16 year old should *have* to work 25 hours a week.

And the story states that he does *have* to work 25 hours a week so his family can make ends meet, but gives absolutely no details on which people can judge if that is the case.

The forum heard that one-parent working families were now experiencing severe financial hardship, young people were being forced into work through poverty and employment opportunities for school leavers were declining.

Endermann said he helped his mother, who also worked as a cleaner, to provide for his family and three siblings aged 15, 13 and nine.

“It is very hard to survive on my wage as it is not enough,” he said.

What we are not told, is how much income the family gets from:

  • The mother’s job as a cleaner (I’d assume $27,000 a year if FT)
  • Working for Families (I estimate $388 a week or close to $20,000 a year net)
  • Accommodation Supplement
  • Income from the Father
  • What their outgoings are

Now I’m not saying that if we knew all this, that the story would be wrong. It may be that the family really has no choice but to have their 16 year old son work 25 hours a week. My point is we are not given any information on which to make any sort of independent judgement – which makes the story more propaganda than information.


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Trans-Tasman on Key and income inequality

August 30th, 2012 at 1:16 pm by David Farrar

Trans-tasman reports:

 John Key showed his mastery of the political process when, with one verbal swipe in Parliament, he demolished what appeared to be a promising line of attack by Opposition parties on his coalition’s social policies. Armed with a report on child poverty, Green co-leader Metiria Turei was demanding Key acknowledge inequality in NZ has increased to the highest it has ever been, and institute a universal child payment. Key’s response “let us run through the logic of what the member has said. She says we are an unequal society, because the rich are getting richer, and now she’s on her feet telling me to give the rich families even more for their kids. What a dopey idea that is!” Turei was left complaining “I am not thinking straight.”

This is the great mystery. The left call for less income inequality yet fight for universal rather than targeted government support.

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Drug testing for job seekers

August 28th, 2012 at 1:00 pm by David Farrar

Paula Bennett has announced:

Beneficiaries with work expectations will face sanctions if they refuse to apply for drug-tested jobs, says Social Development Minister Paula Bennett. 

“Welfare reforms are resetting expectations and obligations and recreational drug use is simply not an acceptable excuse for avoiding available work.”

Under the current welfare system an unemployment beneficiary can decline to apply for an available drug-tested job, because they won’t pass the test, without consequence.

This seem reasonable and over-due. It is not random drug testing of all beneficiaries. It is merely saying you can’t refuse to apply for a job which requires drug testing.

“People will be given a warning and reasonable period of time to stop using drugs before having to take another drug test. But further failures will result in benefit reduction and possible cancellation,” says Mrs Bennett.

Where people fail a drug test or refuse to apply for a drug tested job, they must agree to stop using drugs or their benefit will be cut by 50 percent. They will be given 30 days to allow any drugs they have taken to leave their system.

Where they fail a test or refuse a second time, they will have their benefit suspended until they agree that they will provide a ‘clean’ drug test within 30 days. If they do not do this their benefit will be cancelled.

People with addiction will be supported to get help with their dependency while those on some prescribed medications will be exempt.

Some will argue against this, but I ask what their alternate policy is? That someone can remain indefinitely on the benefit refusing to apply for jobs that they could do if they were drug free?

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Labour on the in work tax credit

August 17th, 2012 at 12:00 pm by David Farrar

My Herald column:

If Labour vote for Catherine Delahunty’s bill, it will give National a very significant weapon to use at the 2014 election. They will portray it as making it more attractive for people to remain on welfare, rather than enter the workforce.

The alternative is for Labour to vote against the Delahunty bill. That may be better for them in the long-term, but will pose short-term challenges for them. Firstly they will be criticised for doing a u-turn, and having their third policy in two years on this issue. They will have been against the policy, before they were for the policy, before they were against the policy again.

And Steven Joyce will be delighted to read:

Labour will vote for the initial stage of a Green Party bill to extend Working for Families’ tax credits to beneficiaries, but will not commit to supporting it further or keeping the policy that was one of its main election pledges last year.

There is no way it will pass first reading, so Labour will go on record as having voted to give beneficiaries an extra $60 a week and working parents $0 a week.


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Labour’s welfare split

August 15th, 2012 at 12:00 pm by David Farrar

Claire Trevett reports:

Mr Shearer was also expected to be criticised – it is understood some caucus members were upset about Mr Shearer using the example of a person on the sickness benefit to state he did not approve of welfare fraud. Mr Shearer used the anecdote in a speech to GreyPower last week and yesterday said he stood by it.

It will be interesting to see if Shearer ever uses it again in a formal speech. If he does not, that will signal that Labour doesn’t support work testing for beneficiaries and is happy for people to remain on a benefit even if they are capable of working.

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Dom Post on the sickness beneficiary

August 11th, 2012 at 9:42 am by David Farrar

The Dom Post editorial:

Labour leader David Shearer tells a good story. Unfortunately, the punchline is missing.

If he can deliver it, voters might start listening to Labour again, but till he does the story serves only to illustrate the paucity of critical thinking within his party.

The story goes like this: during the 2008 election campaign Mr Shearer knocked on a door in his Mt Albert electorate. “See that guy over there,” said the man who came to the door, gesturing to a neighbour’s house. “He’s on a sickness benefit, yet he’s up there painting the roof of his house … Do you guys support him?”

Mr Shearer recounted the encounter at a Grey Power meeting in Auckland this week. The answer to his constituent’s question, he told his audience, was no, Labour was not in favour of people receiving the sickness benefit when they were fit for work. Fairness was a core feature of the social contract. People who needed assistance should get it, but once they were back on their own feet they should pull their weight and contribute to society.

Regrettably, that was the beginning and end of the lesson.

Mr Shearer said the government’s role was to ensure the transition from welfare to work occurred through upskilling, educating and giving a “nudge” to those not honouring their side of the bargain. But he did not say how he proposed to persuade the sickness beneficiary to descend from his roof and seek paid employment.

Given that the last Labour government had nine years to upskill, educate and nudge, the public could be forgiven for assuming that under Mr Shearer Labour has nothing new to offer.

That is the real issue. I’ve got no problems with the story as an example of what shouldn’t be tolerated, and think the Labour activists condemning it are being rather precious.

The real issue is that Shearer said he was against this happening, but his party has opposed policies to prevent it – and offers nothing new.

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A good initiative

August 9th, 2012 at 11:00 am by David Farrar

Olivia Carville at The Press reports:

Two Christchurch construction companies are hiring beneficiaries for the city’s rebuild.

Fletcher Building and Hawkins Construction have embedded Work and Income staff members to help recruit unemployed youth for jobs in the rebuild.

The two companies have assisted 86 unemployed Cantabrians into work.

Social Development Minister Paula Bennett visited a Hawkins Construction site today and met four workers who had been employed through the Work and Income scheme and a Maori trade training scheme.

One of the workers, apprentice Jesse Neville, 19, said he had been trying to secure a job for four years.

He had been on a benefit for 12 months before Work and Income gave him the chance to get an apprenticeship with Hawkins Construction.

Although life was “easier being on the dole, it’s less boring working”, he said.

When he was on a benefit he would usually wake up at noon and play Xbox for the afternoon, but now he was “way more motivated”.

Neville had applied for about 30 jobs to no avail and said that if the apprenticeship opportunity had not been offered to him, he would still be on the benefit.

That’s a very cool story. We need more of those.

Another worker had been employed at Hawkins Construction through He Toki ki te Rika, a collaborative Maori trade training scheme with Ngai Tahu, the Christchurch Polytechnic Institute of Technology and Hawkins.

Patrick Kohu, 51, decided he needed to “make a change” in his life after he was released from prison, and he had chosen to get involved with the programme.

“It offers a sense of belonging and purpose, I suppose. It’s about rebuilding my past,” he said.

And that is even better.

I will point out the 90 day probation period makes it less of a risk for employers to take on staff with a chequered background.


Large welfare families

July 15th, 2012 at 12:00 pm by David Farrar

The HoS reports:

Taxpayers are forking out $2000-plus a week to a select group of benefit-dependent parents with more than 10 children.

Official figures show that twelve families on welfare have 10 or more kids, receiving a range of top-up payments on top of their average of nearly $1000 a week.

It would be interesting to see how many families there are with more than 10 children who are not on welfare. A generation ago there would have been quite a few. Jim Bolger had nine kids for example. I suspect far fewer today. Even the Catholics seem to manage to restrict themselves to four or five kids – Vatican roulette must have got better over the years :-)

As for the 12 families on welfare with over 10 kids, what I’d be interested in is whether the kids came before or after they were on welfare. If one parent died, then their surviving partner would go onto welfare with the kids. That is how it should be (although I would recommend life insurance for parents with large families). But if a family has had 11 or more kids, and the parents have never been in the workforce – that is not a good thing.

“There’s two words we don’t use often enough in this country and that’s self-responsibility,” Bennett told the Herald on Sunday. “The size of someone’s family is their business, so long as they don’t expect someone else to pay for it.”

Absolutely. So long as the parents are capable of providing for their family, it is no one’s business how many kids they have. However if you are already unable to provide for your existing kids, and you choose to have more – then the taxpayer does take an interest.

The data, released by the Ministry of Social Development under the Official Information Act, shows there are 143 parents on Work and Income’s payroll who have eight or more children and receive basic payments of $7 million a year, plus supplements.

There are more than 3000 large families with five children or more on the benefit. One-third have been on the benefit for more than five years and 430 for more than 10 years.

This is what the recent welfare reforms are designed to reduce – long-term welfare dependency.

Bennett said there were some people, such as grandparents and foster carers, who had taken children into their care who were doing a valuable duty for the community – but others who were taking advantage of the system.

Yep, need to differentiate.

But beneficiary advocate and former Green MP Sue Bradford said everyone would be better off if beneficiaries received more money.

Umm, except taxpayers I presume. I would also dispute that keeping people on welfare is good for those families long-term.

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ACC and Welfare

June 23rd, 2012 at 12:00 pm by David Farrar

The Herald reports:

The proportion of long-term ACC clients moving on to benefits has surged since the corporation adopted a tough new stance, which has fuelled allegations that they are being forced off compensation before they are rehabilitated.

That may be the case, it may not. Let’s look at the numbers.

But yesterday’s figures show that the proportion of long-term claimants leaving ACC and going on to health-related, unemployment or domestic purposes benefits rose sharply from early 2009.

In the five years to 2008, the proportion going on to benefits was 12.1 per cent, but during 2009 that rose to 16.4. In the first five months of 2010, the most recent data held by ACC, the proportion rose to 19.4 per cent.

ACC figures also showed the corporation had reduced the number of long-term claimants on its books by 3644 or 25 per cent to 10773 in the three years since June 2009. That reduction is well ahead of ACC’s targets.

Okay so 3,644 people have gone off ACC, and 19.4% have gone onto welfare. First of all that presumably means 81% or 2,937 are now in employment which is a good thing.

Of the 707 who have gone onto welfare, the data suggests 441 would have been on welfare under the previous trend. That means an extra 266 have gone onto welfare.

At a macro level, an extra 266 on welfare for an extra 2,937 back in work seems pretty reasonable. But this shouldn’t really be about the macro level. In an ideal world no one would be declined ACC support who genuinely is unable to work due to an injury, and no one would remain receiving ACC support who is capable of resuming full-time work after their injury. There will always be some in both categories, and the aim should be to minimise both.

Of the 266 extra people on welfare, a key thing might be what benefit have they gone onto. If they have gone onto an invalid’s benefit or even a sickness benefit, then it suggests there could well be a problem. If however they are on the unemployment benefit, then that may just be because the jobs market is still subdued.

So that data is interesting and worth investigating more. But it is not conclusive of itself.

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February 16th, 2012 at 10:02 am by David Farrar

Stuff reports:

Ms Ngatai was evicted from the Charles Cr house, where she lived with her partner and eight children, on January 26, following a tenancy tribunal hearing which found she had not paid rent in over a month.

Property manager Flo Drabble, who inspected the house after the eviction, said it was so filthy that she vomited while trying to clean it.

“In all honesty it was the worst condition property I have ever been in.”

The walls and floors were apparently filthy, it reeked of urine, windows were smashed, animal faeces were scattered inside and it was riddled with insects.

Miss Drabble said the house will need to be fumigated and the carpet needed replacing.

Ms Ngatai, along with her partner and children, aged three to 15, are now living in a tent in the backyard of her cousin’s home in Putaruru.

It sounds like the tents may be more hygienic.

On February 11, 2009, Ms Ngatai and her partner, who are both beneficiaries, entered into a rent-to-buy agreement, at $336 per week, with Auckland-based property investor Mike Hyams.

The house was in the process of being renovated throughout, but Ms Ngatai needed a place to live and thought owning a home would be a good investment for the future.

She said it had no hot water or electricity, leaking pipes, no kitchen, faulty wiring and rubbish littered everywhere.

She claims to have invested thousands of dollars of her own money into maintenance of the property.

“The conditions were, [Mr Hyams] was supposed to do the house up and he didn’t. We were stuck for three years fixing up electricals and plumbing.”

Mr Hyams said he wiped off more than $6000 of money owed based on these allegations.

In November 2009, Ms Ngatai could no longer afford to purchase the property and it was agreed she could remain as a tenant at a weekly rental of $165. The Times was shown a tenancy agreement signed by both parties on November 6, 2009.

So the evil landlord was charging them just $165 a week.

As of May 12, 2011, Ms Ngatai owed $4300 in arrears, which is recorded in a tenancy tribunal application by Mr Hyams.

So around 25 weeks of arrears.

Incidentally I’ve done a quick estimate of how much money the family should have been getting in benefits and it is $980 (after tax).

But I guess some will still say that the problem is that benefits are not high enough.


Debate on having children

February 8th, 2012 at 4:39 pm by David Farrar

Danyl at Dim post blogs in response:

But the point here is that having a couple of children shouldn’t be a ‘bad personal choice’ for everyone not earning a high income. 

It’s not a couple of children. I don’t disagree that a couple of children shouldn’t be a bad personal choice. This was four children though. One from a previous relationship, and three from this one. I stand by my view that if your household income is $42,000 a year, then it is not a good time to have a fourth child.

This used to be a country in which a family could be comfortably supported on a single, average income.

$42,000 a year is below the average personal income (for a FT employee) and well below the average household income for a couple. And four children is twice as much as two children.

That’s because our median wages remain stagnant while our living costs continue to rise.

Untrue. Our median after tax wage has increased in real terms.

Choosing your family size to meet your budget is nothing new. It is what the vast majority of couples do. Many well off couples decide to say limit their family to two or three kids, as a third or fourth kid would be too expensive.

I have a lot of sympathy for families with children, who fall on hard times, say with one or both parents losing their job. That is why we have a multi-billion dollar welfare state with welfare benefits and Working for Families.

But if a family is already finding it tough to make ends meet, and chooses to have further children, then I have less sympathy.

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Dom Post on Shearer’s challenge

January 9th, 2012 at 2:00 pm by David Farrar

The Dom Post editorial:

As new Labour leader David Shearer embarks on the daunting task of reconnecting his party with the people who used to vote for it, he could do worse than take note of recent developments in Britain.

There, Liam Byrne, the British Labour Party’s spokesman on work and pensions, has written an extraordinary article calling for a radical rethink of the welfare policy his party first introduced almost seven decades ago. …

Byrne lauds him for his vision, but says he would be worried by the way his system has “skewed social behaviour” by creating long-term dependency. “For him ‘idleness’ was an evil every bit as insidious as disease or squalor,” writes Byrne. “He wanted a responsible government taking determined action to create work, but a responsible workforce too.”

Michael Joseph Savage, the architect of New Zealand’s welfare state, believed everybody, as a right of citizenship, was entitled to “a reasonable standard of living in the days when they are unable to look after themselves, whether it be because of old age or physical infirmity”. However, he also believed in the dignity of the working man.

It is inconceivable that Savage and his colleagues ever viewed welfare as a valid alternative to work, as some of their successors appear to do.

Labour campaigned at the last election that working poor with children will get an extra $10/week and those not working with children will get an extra $70/week. What an awful incentive and message they were sending out.

In New Zealand, as in Britain, the challenge for Labour is to reconnect the party with the working man, and woman.

A good start would be for David Shearer to announce the scrapping of their 2011 policy to pay beneficiaries $70/week more to not be in employment.

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The new front bench

December 15th, 2011 at 11:00 am by David Farrar

I like this photo (from Stuff) of the Ministers being sworn in. I like the fact that a third of the front bench are woman (and two are Maori women) and indisputably all there on merit – not on the basis of quota or factional appeasement.

I also likes this response from John Key to David Shearer’s call to be on the Ministerial committee on poverty:

Mr Key wished new Labour leader David Shearer all the best in what was a “thankless” job as leader of the Opposition.

Mr Shearer had been “quite quiet” as an MP so it was difficult to tell how he might perform.

However, he rejected Mr Shearer’s call to widen a ministerial group on poverty to all MPs.

“I’m more than happy for David Shearer to be a part of the ministerial committee if he’s happy to give the Government confidence and supply.”


On the serious substantive issue, both John Key and David Shearer would sincerely like to see less poverty in New Zealand. They agree on the aim, but the reality is National and Labour disagree strongly on the solutions. This is not always a bad thing – it means NZers get to choose whose policies etc they prefer.

For example National believes a key way to reduce poverty is to reduce the numbers on welfare. Labour however believes that you reduce poverty by paying those on welfare more.

One could argue shouldn’t we do both. Well, yes you can but the policies are not that compatible. The more you pay people on welfare, the harder it generally is to reduce the numbers on welfare.

Ultimately it is of course a bit of a balancing act. Few advocate abolishing the welfare state and having a Singapore system where families must support those not in work, rather than the state. And likewise few support having a welfare state where work is voluntary and you can just go on a benefit whenever you feel like it.

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