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.

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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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Homeless

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.

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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.”

Heh.

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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Being on the dole

December 5th, 2011 at 1:00 pm by David Farrar

A reader has sent in this guest post about their experiences of being on the dole and with WINZ:

I became unemployed in 2009. It was my choice, and it was a bad choice. I was hoping to move jobs and thanks to the recession, both my plan a and backup plan fell over. After 6 months of living off savings and some Working for Families money, I applied for the dole.

I generally found WINZ to be really helpful and some people I worked with really bent over backwards for me, even when I wasn’t worried about things. Pretty much every case worker sympathized at the lack of jobs, and acknowledged that there really wasn’t much that I could do.

However when I had to renew my dole after the 1 year mark I ran into some issues. I had taken myself off the dole over the summer while I tried to build up a small business I had started. I actually was told I should not be trying to create a business but should be looking for work. As a result of my initiative and in spite of having 3 interviews in the previous few weeks as well as me delaying my reapplication and actually going without income for several days on the hope that I would not have to reapply*, the Case worker decided I was a proud, lazy bludger and cast around for suitable torture. Having discovered that I was ineligible for one course due to actually having been a productive member of society(!), I was enrolled in a “course” for work seekers that turned out afterwards to be a weekly, early-morning commitment.

Well, I turned up every week. Typically, about 6 people who were supposed to did not. They started the process of being kicked off the benefit. Many who did show up didn’t have a CV, including one fellow who had been “looking for work” for over a year. We were told one week that the WINZ staff at that office had been calling people up, and almost no one had been answering their cell phones. The point was well made – would you get a job if an employer rang?

As for the course, it consisted of

A warning about what would happen if we didn’t show up for the course.
Looking through the WINZ web site for jobs that might possibly be suitable

As an experienced professional who’d found several jobs without any help from WINZ, and had a WINZ work broker wonder in amazement that I hadn’t found employment, it was humiliating. There were of course no jobs on offer for my skill set. But I did apply for several more basic jobs and got one interview. It did make me think about what I had to do to get a job, and made it clear that sitting on my bum was unacceptable.

Because, see that’s the thing. When there’s no sales being made on trademe, and there’s no interviews in sight, and the business that’s looking for a hundred non-skilled workers doesn’t even bother to reply to your application, you start to get depressed. And yet the dole payments, the working for families tax credits keep rolling in. That combination of discouragements and easy money is corrosive. I was actually better off unemployed financially than I had ever been for many years employed – and with hours of free time to boot. I would have been a fool if I hadn’t seriously considered making it a long term lifestyle.

In the end, I got a job by looking in other places. We moved city. It was a massive upheaval and traumatic for my family, but I am now a productive member of society.

One thing that helped the transition was the IWTC. Because of that extra income our Working for Families doesn’t drop and helps fund my travel to work and other extra costs. I can’t believe anyone would want to give that bonus money to people who don’t work – if you’re not leaving the house your costs are much, much lower.

I was out of work for almost 2 years. Yes, there are few jobs. But forcing people to get out and look is a good thing. Making them re-apply for the dole is a good thing. Forcing them to regular courses is a good thing (how on earth will someone who can’t get out of bed once a week get out of bed every day for a job?). Giving people a  financial incentive to work is a good thing.

As Labour says, there are people on the benefit who want to get out and work. No one doubts that. But there are also a large number who find it easier to sit at home and collect free money from the government. Society pays people the dole on the condition that they are looking for work, and I find it extraordinary that the measly token gestures such as the National party have made are so vigorously decryed by those who “support” people like me – long term unemployed. Instead of supporting them, they merely make the issue worse.

What would I do?

  • I would reduce (yes, reduce) the amount of working for families paid to beneficiaries and increase accommodation payments. It was my observation that payments are actually quite generous for people with no accommodation costs, but in places like Auckland those costs are crippling.
  • I would have people required to behave much more like they are in work. Many people are simply not employable because they have habits that are simply not compatible with being employable. Having them turning up *every* day for courses or sign-ins at normal work hours would be a minimum. Actually getting together people with complementary skills and seeing what they can produce. Encouraging out-of-the-box solutions.
  • At worst, I would like to see WINZ have work available that pays that anyone can just walk into off the street if they’re prepared to do it. Frankly there were times when I’d have quite happily shoveled manure all day and back again if I’d earned a dollar for it, just so I could be counted as working. I’m not talking work-for-the-dole here, I’m talking work for a little more pay than the dole, as a morale booster.

* My wife was castigated by another staff member for my recklessness when she visited the office for another matter. She was almost reduced to tears in fact. Which makes what happened even all the more bizarre.

Always great to have a first hand perspective.

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Welfare fraud policy

November 15th, 2011 at 3:15 pm by David Farrar

National has announced:

Under National, there will also be a stronger, more proactive stance against those who abuse and defraud the welfare system. Jobseekers whose recreational drug use affects their ability to apply for or secure a job will also be sanctioned, and through the investment approach those with drug addictions will be supported to overcome their illness. In addition, benefit recipients on the run from the Police will have their benefit cancelled.

I think many will be surprised that this wasn’t already the case in terms of those running from the Police.

And a vast proportion of people on the sickness benefit are drug addicts. The welfare state should not be there to allow someone to remain a non work capable drug addict for years or decades. They should be treated and if they won’t take treatment, be sanctioned.

“This year alone, Work and Income’s data matching found around six to 12 per cent of people were receiving benefit payments they weren’t entitled to.

That’s a huge percentage. Of course not all of this may be due to fraud. Some may be accidental, but I would hope everyone would agree that figure should be around 1% or less.

And from the policy:

There are 25,000 people currently receiving a benefit who have committed benefit fraud in the past, or who have received substantial overpayments they were not entitled to, after abusing the welfare system.

I bet you Labour say it is a miniscule problem, not worth worrying about.

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Don’t work and get more money

November 8th, 2011 at 2:15 pm by David Farrar

In my By the numbers blog at Stuff I write:

Up until yesterday I would have said the worst of their new policies was the return to 1970s-style national industry agreements, which would have the government impose terms and conditions on every single employer in an industry.

But yesterday Labour announced that every beneficiary with dependent children would become eligible for the in-work tax credit, and get an extra $60 a week.

You can read the rest at Stuff, and comment there.

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Not Working For Families

November 8th, 2011 at 8:20 am by David Farrar

Labour’s latest bold policy is to borrow $2.6b and spend most of it on paying people not to work.

Labour says it will effectively extend the in work tax credit to, well parents not in work. Ironically in Government they refused to do so, even in the face of legal challenges to the policy.

Labour had already pledged to give all beneficiaries an extra $10/week. This would give a DPB recepient an additional $60 a week on top of that. While National is working on incentives not to remain on the DPB, Labour is getting rid of one the few existing incentives to be in work.

In fact Labour’s policy is unfair to working low income parents. Because if you work, you have additional costs such as travel to work, work clothes etc.This policy makes it harder for someone to go from welfare into work.

Incientially this is not the first time Labour have pledged to end child poverty. They said in 2002 that if they got re-elected, “ending child poverty will be its top social policy“. Not as bad as their policy to have no one under 18 not in work, study or training – that particular policy they had announced five times previously.

So with this policy working families will have to pay the interest on Labour’s extra borrowing, while a sole parent on the DPB will get an extra $70/week in the hand.

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The full story

October 6th, 2011 at 9:00 am by David Farrar

Kate Chapman at Stuff reports:

Sosefina Masoe spends her nights in one of the most powerful offices in the country; from the top of the Beehive she can see the lights of the Wellington skyline and the moon reflecting on the harbour.

When the 49-year-old solo mum isn’t cleaning Prime Minister John Key’s office, she’s at home in her Porirua state house with her four teenage children and four grandchildren.

Masoe joined Parliament’s other cleaners in Labour’s caucus room today to push for a $15 an hour minimum wage and to remind politicians that poverty does exist in this country.

First of all good on Ms Masoe for being in work, despite having eight kids and grand kids to care for. That’s excellent.

And from my time at Parliament, my memory of the cleaners are they were very hard working and professional. I am sure Ms Masoe is the same. And she is quite entitled to her view that she should be paid $15/hour. Personally I think that it is better to achieve that through negotiation than increasing the minimum wage. You can not create a more prosperous country by simply passing a law demanding everyone gets paid more. If only it was that easy.

She earns the current minimum wage, $13.50, and says that’s about $453.34 in the hand a week.

By the time she pays $250 in rent, $90 for power and $70 for petrol to get to and from work, Masoe has about $43 left to pay for groceries.

That usually consists of budget canned spaghetti and baked beans, cheap bread, oats, noodles and margarine.

“This is what our low wages can afford. It’s budget food, it’s not healthy,” she told MPs and fellow Service and Food Union representatives this afternoon.

Parliament’s cleaners worked hard for the health of those in the complex, they were “the most important people in your life” and deserved more, Masoe said.

“The cost of everything is going up, we can’t afford to feed our families with $13.50 an hour any more.”

Except that the family doesn’t just get $13.50 an hour.

Whale does some maths:

Her take home is $453 per week. Her WFF Credits are worth at least $677 per week if the article claims of eight children (four teens) are correct.  That equates to a salary of about $70,000 per annum.

Whale is correct except I actually make it that she gets $712 of WFF, which makes her gross income equivalent around $77,000. Also on top of that the taxpayer subsidises a state house so that it is only 25% of income maximum.

So when Labour plant a story about how someone has only $43 a week to pay for groceries for their family, it would be nice if the media thought to ask about total household income, because to be frank it is dishonest to ignore the other $700 a week of income.

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30 years on the DPB

September 21st, 2011 at 2:00 pm by David Farrar

The Waikato Times reports:

A single Waikato mother of six children has been receiving benefits for almost 30 years.

She is one of an army of long term Waikato beneficiaries revealed in information released to the Waikato Times under the Official Information Act.

Social Development Ministry statistics show 1647 people in the region have been receiving some form of benefit for 15 years or more.

A further 1500 have been on it for between 10 and 15 years, 3655 between five to 10 years, 6309 between two to five years and 12,904 for less than two years.

Nationally, welfare payments cost taxpayers about $7.6 billion a year.

The case of the solo mum who has been on the DPB for 30 years makes me curious. Did she have six children to the one partner, and then he left her or died? Probably not, as then you would not be on the DPB for 30 years.

So presumably up to five of the children she has had, were while on the DPB. Not to get the DPB you have to be effectively “single” and not in a relationship with someone. So who are the fathers of the six children and are they contributing to their upkeep?

I have no problems with having the DPB available to solo parents who find themselves without a partner for reasons of death or divorce/separation. I do have a real problem with solo parents who have multiple children while receiving the DPB. Now I’m not advocating no support in these circumstances because that may punish the kids. But I do think there needs to be a disincentive to continue having children if you are unable to support them yourself.

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Key’s speech on welfare

August 14th, 2011 at 12:23 pm by David Farrar

John Key said:

I’ve often said that you measure a society by how it looks after its most vulnerable.

But you also measure a society by how many vulnerable people it creates.

At the moment it is creating too many, so we are going to make changes.

Good.

Over the past year, there were between 8,500 and 13,500 young people aged 16 or 17 who were not in education, training or work.

What we know is that when these young people turn 18, 90 per cent of them will go onto a fully-fledged adult benefit, unless we do something to intervene.

I wonder how long on average they stay on a benefit for?

The first change is to find out who all these young people are.

At the moment we simply don’t know, because we lose track of them when they leave school.

That has to change.

The Government is going to amend the Privacy Act and the Education Act to allow two things to happen:

  • schools will be required to tell us when 16- and 17-year-olds leave during the year
  • and information on these young people can be shared between the Ministries of Education and Social Development.

 For the first time, we will be able to find out who all these disengaged 16- and 17-year-olds are; what circumstances they are in; what problems they have had at school; and what their risk of long-term welfare dependency is.

It staggers me that up until now, the Government was unable to even identify who these 16 and 17 year olds are.

We are then going to fund community and other organisations to provide a transitions service, similar in some ways to the current service, but one which:

  • much more closely targets the young people most at risk of long-term welfare dependency
  • and has a greater range of tools available, such as being able to arrange access to social services like drug and alcohol or counselling services
  • and, most importantly, is focused on results.

For the first time, a considerable part of the government’s funding of transitions services will depend on something actually changing.

That could include goals like the young person successfully completing a training programme, or not being on a benefit at age 18.

Put simply, we are going to make it worth someone’s while to get these young people back on track.

Incentives tend to work.

At the same time, the government will provide a lot more training places.

Next year there will be 7,500 places available under the Government’s Youth Guarantee policy, which provides free study towards school-level qualifications in places like polytechnics and wananga.

And in two years’ time we will have built up the number of Trades Academies so that 4,500 places in free, work-focused trades and technology training are being offered.

I imagine this will cost the taxpayer more money in the short to medium term. But I’m happy for my taxes to be spent on stuff like this, if it really does lead to fewer young people spending years or longer on benefits.

The second part concerns those young people who are receiving benefits in their own right.

I need to make it clear that today’s announcements will not affect the Invalids Benefit, which can be received by people as young as 16.

But there will be changes for young people who receive other sorts of benefits.

At the moment these young people are largely left to their own devices.

But I believe this hands-off approach has failed this group of young people.

We can do a lot better.

So the policy on benefits for young people is going change.

These changes will apply to all young people who get the special 16- and 17-year-olds’ benefits, and also to 18-year-old teen parents.

This has three elements.

And they are:

  1. first is that we are going to fund community and other organisations to provide comprehensive and concentrated support to these teen beneficiaries
  2. we are not going to simply hand over benefit money every fortnight. Instead, we will have a much more managed system of payments, with the young person’s support provider, or MSD in some cases, paying bills on their behalf and helping them manage within their budget
  3. Young people who are receiving these payments will have clear obligations, for example; to attend budgeting or parenting programmes. Most importantly, each of these young people will have to be in education, training or work-based learning

The details of (2) are likely to be:

  • some essential costs, like rent and power, will be paid directly on the young person’s behalf
  • money for basic living costs like food and groceries will be loaded onto a payment card that can only be used to buy certain types of goods and cannot be used to buy things like alcohol or cigarettes
  • and that a certain, limited amount will be available for the young person to spend at their own discretion.

And details of (3) are:

We have carefully considered the interests of the children here.

And we absolutely believe that a child’s interests are best served if their parent continues with her own education, and if the child is in good-quality childcare.

So we will be insisting that teen parents continue with education or training, and we will cover the costs of the childcare involved. …

However, we envisage that by the time their child is one year old, most teen parents will be in some form of education or training.

The cost of the package is estimated to be $25 million a year. I think that is an investment worth making if it produces results.

Being a parent can be bloody tough, even for professional couples in their 30s. Our current system of just paying a benefit to a couple of 17 year olds, and hoping they’ll be okay as parents has been benign neglect. I welcome these changes, and think they’ll be good for both the teenagers, and for their kids.

A Q&A on the policy is below:

WelfarePolicy_QA_3

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MacDoctor on benefit budgeting

April 9th, 2011 at 10:36 am by David Farrar

MacDoctor blogs:

John Key was castigated in the left wing blogosphere for suggesting that the increase in people needing food parcels was due to issues of budgeting. It seems he was right. Not that the Herald would actually use the MacDoctor’s headline – they prefer:

Mum refused food aid under tough new rules

And then they launch into a long story about a solo mum with fibromyalgia and three children (7, 13 and 17) who has had to escape an abusive relationship. So far so good – that is what the DPB was intended for (although I would have thought she would have been on the sickness benefit, rather than the DPB). The story gets lurid with the nasty National government refusing to provide this poor lady with food aid.

Only in paragraph ten do we learn that this woman is receiving $827.50 a week in various forms of government largesse. It is not until the end of the article that we learn that she has had  four aid packages in the past six months and that she refuses to attend any budget meetings with WINZ.

I note the rent for the property is $385 a week. The article does not say whether or not she has applied for a state house. Maybe she doesn’t want to move, but if she did move into a state house then the rent would be well under $200 a week.

The power bill is $65 a week. At 25c/unit, that is 37 units a day which seems pretty high.

Also worth noting that while her expenses are currently $31/week higher than her income, $83 a week is repayments and fines. So if they had been avoided, then there would be a surplus of $52 a week.

None of this is suggesting that life isn’t challenging bringing up three kids on $830 a week. I am sure it is. But the facts show that the level of taxpayer support is already very significant, and that there are cost savings which can be made.

UPDATE: The Herald today reports:

However, a Glenfield solo mother of three children who was refused a $106 food grant on Wednesday was given the money late on Thursday after the Herald reported on her case.

Work and Income head Mike Smith said the mother, “Maree”, was not refused a grant – “she walked out of the meeting before a decision could be made”.

“Last year Maree received 13 hardship payments. She owes us $1400 for money we’ve advanced her,” he said.

“She is clearly having trouble managing her finances. We want to help her with that, rather than continuing to service the symptoms of the problem with hardship grants.”

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The cockroach eating boy

April 6th, 2011 at 10:23 am by David Farrar

Stuff reports:

Reports of a starving boy eating cockroaches, pensioners eating cat food and a soaring increase in demand for food parcels were raised in Parliament today as Labour accused the Government of turning its back on New Zealand’s most vulnerable citizens.

Labour’s deputy leader, Annette King, asked Prime Minister John Key what he intended doing to help people who couldn’t afford to buy food because of the rapid rise in the cost of living.

”Many low-income families can’t afford even a basic nutritious diet for their children…the Salvation Army in Whangarei has seen an increase of 90 percent in food parcels since the New Year and is now having to ration them to one per family,” she said.

Mr Key said he understood the cockroach case could be an issue of neglect rather than income support.

”The Government obviously supports not only a benefit-based system for those who find themselves in need but also significant hardship grants,” he said.

The Government spends $21.2 billion on social security and welfare. Yes, that is $21.2 billion. That is aI lot of money for a country of 4 million.

So if I was media, and I heard claims about a family so starving, that a six year old boy is forced to eat cockroaches for food, I would ask two questions before breathlessly reporting the claims.

  1. What is the family’s current income, and are they getting all the Government support they should
  2. What has that income been spent on, so there is no food for their six year old child?

The level of welfare that a “poor” family gets is exactly the same today, as it was under nine years of Helen Clark. No benefits have been cut, and they are adjusted for inflation. In fact National passed a law making the inflation adjustment mandatory.

NZ has a very generous welfare state at $21.2b. That is not to say that life isn’t very tough for families dependent on welfare – of course it is. But I would be amazed if it turns out that the reason that six year old was eating cockroaches was because WINZ had refused them assistance.

UPDATE: The BOP Times makes clear this is a case of neglect, not insufficient support. So shame on Labour for trying to blame the cost of living on this.

A Western Bay mother’s appalling neglect of her family reduced her 6-year-old son to eating cockroaches to survive.

This admission was made to Homes of Hope director Hilary Price.

The boy told how hungry he used to get before he and his siblings were removed from their mother by Child Youth and Family (CYF) and put into the care of Homes of Hope.

One day they got so hungry they went to look for food and found cockroaches. He then described eating the cockroaches: “Yeah, they were crunchy and juicy.”

Mrs Price did not doubt the boy was telling the truth because of his age and the manner in which he confided to her.

“I was appalled to hear that. There is no excuse when the person was receiving enough support to access the basics for her children.

Yet this is what Annette King asked the PM in Parliament:

What is he prepared to do to assist New Zealanders who are most in need, in light of reports over the weekend that a boy a was found eating cockroaches because he was starving and that the budgeting services are receiving reports of pensioners eating cat food as the cost of living keeps going up at a rapid rate?

So Labour knew this was a case of extreme parental neglect, and that the local welfare group had said the mother was receiving enough support for the basics – yet they still tried to portray this case as tied to the cost of living. Shame.

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Food Banks

February 17th, 2011 at 7:20 am by David Farrar

Claire Trevett in the Herald reports:

When Labour’s social development spokeswoman Annette King asked about Salvation Army reports of high demand for food parcels, Mr Key responded by saying it was true that the global recession meant more people were on benefits.

“But it is also true that anyone on a benefit actually has a lifestyle choice. If one budgets properly, one can pay one’s bills.

“And that is true because the bulk of New Zealanders on a benefit do actually pay for food, their rent and other things. Now some make poor choices and they don’t have money left.”

The PM is right that the majority of those on a benefit do not use foodbanks. Those who do use foodbanks probably fall into three categories:

  1. Those whose expenses regularly exceed their income – which probably does indicate a budget prioritisation issue
  2. Those who have a temporary one off high priority expense, such as medical bills (note special need grants are also available)
  3. Those who prefer free food to paying for food

I don’t know what proportion of foodbank goers fall into each category. But I am reminded of what happened when VUWSA set up both a welfare fund (free cash) and a foodbank (free food) for students.

Year after year they would report that demand exceeded supply, and that this proved how more and more students were living in poverty, and hence why they needed to double the budget for said funds. And even after said doubling, the following year they would again run out of free money and free food. And again they would declare this proved how more and more students were living in poverty.

My theory was simpler. My theory was simply that students like free money and free food.

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A new years treat for taxpayers

January 5th, 2011 at 2:10 pm by David Farrar

The Press reports:

Former gang leader Darryl Harris will lose the sickness benefit he has claimed for 26 years.

Social Development Ministry chief executive Peter Hughes said Mr Harris, who lives in Christchurch, had been told that his benefit would stop from January 10 because “he no longer meets standard eligibility requirements”. …

Mr Harris, who has three months to appeal against the decision, and his wife, Marcia Robins, made headlines a year ago when it was revealed they had been claiming unemployment and sickness benefits continually since 1984.

They had received $30,000 in special-needs grants since 2000, including payments for new tyres for their 2007 Chrysler saloon and to fence a swimming pool at one of their Christchurch properties.

Efforts to cancel Mr Harris’s sickness benefit failed when he obtained a medical opinion from one of Work and Income’s designated doctors that he was addicted to cannabis.

Oh no, he is sick, so he must get welfare for life. Or not.

Social Development Minister Paula Bennett said yesterday that the Government believed those who could work should, “and if that is considered hardline, so be it”.

“If someone is receiving the benefit because they are unwell, it is reasonable to expect them to be making every effort to get well so they can return to work.

“That is their responsibility to the taxpayer,” she said.

“It is unreasonable to expect the New Zealand taxpayer to support someone for extended periods on welfare because of a drug habit, unless every effort is being made to kick that habit and get back to work.”

You go Paula.

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Meanwhile in the Land of Oz

December 9th, 2010 at 9:31 am by David Farrar

Simon Collins reports in the NZ Herald:

An alternative welfare review group will call today for raising welfare benefits by as much as 50 per cent to meet the basic needs of jobless families.

The alternative group, chaired by Massey University social policy expert Mike O’Brien and including former Green MP Sue Bradford, says current benefits of $194 a week for a single adult or $366 for a sole parent with one child are “simply too low to live on”.

It calls for restoring benefits “as a first step” to the proportion of the average wage that applied before they were cut by up to $27 a week in 1991. That would mean raising the single dole by 53 per cent to about $296 a week and lifting the benefit for a sole parent with one child to about $536 a week.

I have some questions for the alternative welfare working group:

  1. Is pepsi more popular than coke where you come from?
  2. Is the gravitational field strength also 9.81 m/s^2 on your planet?
  3. Is the sun a yellow sun, meaning Kal-El has his full powers or a red sun, meaning he is just a normal human?
  4. Does the fertile soil on your world allow you to grow the money on trees, or do you plant seeds in the ground?
  5. Is the speed of light 299,792 km/s in your dimension?
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Paid to promote virtues of unemployment

October 16th, 2010 at 1:19 pm by David Farrar

Keeping Stock alerted me to this story in the Dom Post:

An out-of-work artist is setting up a taxpayer-funded “beneficiaries’ office” in downtown Wellington to promote the virtues of being unemployed.

Yes – taxpayer funded.

He is part of a $53,000 performance art installation series paid for by Creative New Zealand and Wellington City Council.

Creative NZ is defending its decision to provide a $40,000 grant but said last night it was unaware of the installation’s “precise content” when the grant was signed off.

Well why the fuck not? Someone should get sacked for this. Or at a minimum Chris Finlayson should take $40,000 out of their budget for next year. Art is one thing – but promoting the virtues of bludging should not qualify.

Tao Wells, 37, advocates the opportunities and benefits of unemployment and says it is unfair that long-term beneficiaries are labelled bludgers for exploiting the welfare system.

It’s unfair that I have to work 60 hour weeks to fund your fucking life style, you bludging wanker.

Wells’ installation, The Beneficiary’s Office, urges people to abandon jobs they don’t like rather than suffering eight hours of “slavery”.

“We need to work less, so we consume less. The average carbon footprint of the unemployed person is about half of that of those earning over $100,000.”

I await the Green Party insisting that this pilot be introduced nationwide – that everyone gives up their jobs to reduce carbon emissions.

Backed by five “staff”, Wells plans to promote his unemployment philosophy publicly and debate it with politicians and the gainfully employed.

Remember, we are paying for this.

He described himself as an unemployed artist with a masters degree who had been “off and on” the unemployment benefit since 1997. Wells said he was receiving welfare and admitted his benefit was at risk by him speaking out.

Late yesterday afternoon his benefit was cut off after Work and Income learned of the project.

Not just a greedy selfish bludger, but a stupid one also.

He refuses to work, but is happy to apply for grants so he can preach about why people should bludge like him. WINZ should refuse to put him back on any benefit unless he can demonstrate sustained activity seeking employment.

Wells denied his pro-unemployment stance was hypocritical when he was being paid $2000 for the project. “We should never be forced to take a job. If you’re forced to take a job it’s a punishment. If a job’s a punishment then society must be a prison.”

Listen Mr Fuckwit, you are not forced to take a job. So long as you don’t want those of us who do work to pay you a benefit, you do not need to ever work again.

Creative NZ boss Stephen Wainwright said the agency’s role was to encourage, promote and support the arts. Innovative new work, such as the Letting Space series, could act as a powerful form of social commentary and encourage debate.

Oh for fuck’s sake. They seriously have too much money. Having a layabout wanker who is illegally claiming the dole, promote dole bludging as a lifestyle choice is not innovative. Would Creative NZ give money for a tax felon to set up an office and advise people not to pay their taxes?

This just makes my blood boil.  We’re borrowing $240 million a week and this is what Creative NZ thinks is a priority. Why don’t the staff responsible at Creative NZ follow the advice of Mr Wells and quit their jobs to escape the slavery of work.

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Hope he stays off welfare

July 15th, 2010 at 3:12 pm by David Farrar

The Press reports:

Lance Bradford says he was so determined to get Metallica tickets that he quit his job before camping overnight at a Ticketek outlet.

His employer would not give him the afternoon off to set up camp outside Canterbury University’s student union, so the driller quit.

Bradford, 23, said he was “ripped and angry” when Metallica said they were coming to New Zealand, but not to Christchurch.

This month, his favourite band announced a surprise Christchurch date, with tickets going on sale at 9am today.

“When I found out they were coming, I thought if they are willing to come down here, then I’m willing to quit my job and come down here to line up,” Bradford said.

While admiring of his tenacity and determination to get Metallica tickets, I do hope he finds another job and doesn’t plan to go onto welfare anytme soon.

If he does, he may get a nasty surprise, discovering WINZ staff do read newspapers.

Another solution may have been to keep the job and pay a friend to queue up for you.

Incidentally if I was his employer, I’d definitely give him leave to queue up for music tickets so long as the absence was not going to critically affect things.

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A new approach to welfare

June 23rd, 2010 at 10:00 am by David Farrar

Dutch News reports:

The Frisian villages of Dongeradeel and Dantumadiel have come up with a novel way of cutting spending on welfare payments – encouraging jobless women to find a rich man, the Leeuwarder Courant reports on Tuesday.

The local social service departments are paying for the women to have a make-over in the hope they can hook up with a rich husband to support them, the paper says. If 70 women find a new husband, the council can save €400,000 on welfare payments.

The councils are putting €1,400 into each woman to have her hair done and get help with her image. They will also get their wardrobe updated and tips on social skills and presentation.

I await the announcement of a pilot here, by Paula Bennett!

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