The biographies of top economists indicate that they were often motivated to study economics in order to be better able to contribute to the common good.
But what is meant by the common good and what policies contribute to it? After all, in general elections, voters are commonly confronted with at least one party advocating higher taxes in order to make New Zealand a better place for New Zealanders – and at least one other party advocating lower taxes in the same cause.
Welfare economics is a branch of economics that explores what might be meant by the common good, and seeks to evaluate economic policies on the basis of their effects on the well-being of members of a community.
As explained previously in the economic ABCs, an insight that has endured since Adam Smith (1776) is that competition, in conjunction with security in person and property, induces even solely self-interested butchers, bakers and the candlestick makers to serve their customers’ interests. Otherwise we freely take our business elsewhere.
During the 20th century, welfare economics formalised this insight into the proposition that stylised competitive processes will produce a zero waste welfare outcome. It is optimal in the sense that no one person’s (self-perceived) welfare can be increased with reducing that of at least one other person (whether such a change is worth doing regardless remains a moot point).
Welfare economics has clarified the many situations in which the same competitive processes will potentially fail to maximise welfare in this sense. These include problems of monopoly, public goods (such as national security and communicable diseases), environmental pollution, income distribution, poverty, malleable preferences and distorting taxes. Economists have formally shown in many of these cases how a well-motivated government might ideally use taxes or regulations to improve general well-being.
Nevertheless, related branches of economics have also illuminated many difficulties that confront government action, including problems of voting behaviour, inadequate information and political and bureaucratic incentives. The UK TV series, Yes, Minister, brilliantly depicts these difficulties. “Doing good” in government is subject to the Law of Unintended Consequences.
What about the welfare state? One of the earliest uses of this term was in the1942 Beveridge Report that ideologically proposed that the state was responsible for individual welfare “from the cradle to the grave”. What followed was a dramatic increase in taxes and social service spending in member countries of the OECD, albeit with significant national variations. Its effects on well-being will long be debated.
WINZ has released the latest benefit stats, and they’re good news.
- 16,196 fewer people on a main benefit than a year ago
- A 5% decrease for all benefits from June 2013 to June 2014
- An 11% decrease for sole parent support benefits
- A drop in the proportion of working age adults on welfare from 11.2% to 10.5%
- Lowest number of people on welfare since 2008 before the Great Recession
- Welfare numbers peaked at 352,000 in 2010 and now 294,000.
- The number of teen solo parents is down 12%. On average a teenager who goes on the benefit stays there 19 years and has a lifetime cost of $246,000
It is great to see the welfare reforms working. The best way to boost incomes is for people to move from welfare into work.
The Daily Mail reports:
In humans the ‘eureka moment’ is a commonly known feeling that occurs when we solve a particularly troubling problem.
But new research suggests that we’re not the only animals to experience this – dogs, too, gain pleasure from solving a tricky task.
In a series of experiments, scientists found dogs were happier when they earned a reward by performing a task, rather than just being handed a treat.
Those dogs won’t be Labour voters then! 🙂
The experimental dogs were only given access to the treat on the ramp when they successfully manipulated the three pieces of equipment they had been trained to use.
The control dogs, meanwhile, were given access to the reward when the puzzles were solved by their partner in the other arena, irrespective of how they used the equipment.
The dogs in the pairs were then tasked with performing the same run several times, and also played both roles of experimental and control dog.
The researchers found the experimental dogs were much more excited to actually get in the arena and solve the pieces of equipment.
On repeated runs they showed visible excitement, such as wagging their tails vigorously, at being led to the entrance to solve the problems again.
The control dogs, on the other hand, were more reluctant to go in and pick up their treat without having to solve any of the ‘puzzles’.
This, according to the researchers, shows that dogs enjoy problem-solving just like humans do.
The Adelaide Advertiser reports:
The Advertiser revealed on Thursday that there are a whopping 7313 Australians who receive the disabled pension but don’t live in Australia.
Many of them live in holiday destinations such as Bali and Thailand, where the $813 dollars they receive from the taxpayer every fortnight goes much further in the form of rupiah or baht.
More than 1200 of them are in Greece, nursing the kind of injuries which are so permanently debilitating that they apparently prevent them from ever re-entering the workforce, yet not from jumping on a 30-hour economy class flight to Europe and a ferry ride to the island of their choice.
Almost 1000 of them are over the ditch in New Zealand, just a stone’s throw from the country which is kindly subsidising their existence. …
The purse for this largesse is sizeable, coming in at $99.9 million a year. And at a time when the nation has been put on notice that the age of entitlement is over, it is a stellar example of how witless governments are when it comes to reining in unjustifiable drains on revenue, yet so adept at creating new streams of revenue by launching another assault on the people who are actually working.
The way it works now is an insult to people with genuine and permanent disabilities, exploding as it has from 500,000 to 800,000 recipients in less than two decades, its annual bill careening towards $15 billion.
The rule of thumb for government should be to provide generous support for those who genuinely cannot work.
It should also involve the ruthless denial of assistance to those who simply choose not to work, and who hide behind confected conditions to opt out of a contributive life, even heading overseas to bludge in a more agreeable climate where the beers are cheaper.
A good summary those last two paragraphs.
The Herald editorial:
It is almost 35 years since Norman Tebbit infamously told the unemployed of Britain to get “on yer bike”. The Employment Secretary was frustrated that, unlike his father in an earlier time, people out of work were not prepared to take to the road to find work. His plea for a less static workforce fell on deaf ears, however, not least because jobs were thin on the ground in the early years of the Thatcher Government.
No such problem exists these days in Christchurch, however. The rebuilding of the city has created plenty of opportunities. Any initiative that makes it easier for beneficiaries to move to this work is, therefore, welcome. …
As well as helping the beneficiaries, the scheme will, obviously, aid the rebuilding of the city. The need for more workers is evident in Canterbury’s 3.4 per cent unemployment rate, which is much lower than the 6 per cent national rate. According to the Social Development Minister, Paula Bennett, work is available not only in the construction sector, which has increased its workforce by 90 per cent since the earthquakes, but in hospitality, retail and many other industries. If the pressure on housing in Christchurch could cause a problem or two, that is hardly a reason to scrap the scheme, given its potential value.
All up, the initiative will cost, at most, $3.5 million. That is an insignificant sum for something that could be a life-changing experience for those who seize the opportunity during its 12-month span.
There should be no shortage of applicants. About 19,000 beneficiaries are required to be available for part-time or fulltime work in the 18-to-24 age bracket alone. Some of that number may be loath to leave the relative comforts of home and family. But rather than being disinclined, they should heed the “need work, will travel” mindset that has become common worldwide. Take, for example, the Poles, Czechs, Hungarians and others from central Europe who have moved thousands of kilometres to become part of the British workforce. …
Most beneficiaries also want to be doing meaningful work. Helping to rebuild a shattered city surely fits that bill. Nor are beneficiaries being asked to travel to another country and culture like the Poles and Czechs in Britain, or, indeed, the many people from overseas who have come to work in Christchurch. There is every reason for them to grasp the opportunity.
Hopefully they will.
John Key has announced:
So today I am pleased to announce a new initiative to further support the rebuild and at the same time help job-seeking beneficiaries outside the region gain work.
It’s called ‘$3k to Christchurch’, and it has two parts.
The first part is Work and Income actively promoting through advertising and direct marketing, job opportunities in Christchurch and surrounding districts to beneficiaries outside the region.
This will involve staff discussing with beneficiaries if moving is an option, and looking at whether their skills and a job in Canterbury can be matched up.
The second part is providing a lump-sum, one-off $3000 payment to beneficiaries interested in moving to Christchurch or surrounding districts who gain a confirmed job offer.
To be eligible, a beneficiary would need proof of a confirmed full-time job offer of at least 30 hours a week and for more than 91 days.
Sounds a good initiative. Getting people into work is excellent.
- Beneficiaries will not be required to provide proof of costs.
- The money will be paid in one lump sum, and it will be non-taxable and exempt from any income and asset tests.
- In most circumstances the payment would be non-recoverable, but situations where it may have to be repaid would be for cases like misconduct leading to dismissal.
- The offer will be open to all ages who are on benefits, but with a particular focus on those aged 18 to 24.
Non-taxable makes it more attractive.
The apprenticeship reboot I announced in January last year was so successful that by October, 8000 people throughout the country had signed up for training in apprenticeship programmes.
That happened in the space of just seven months – when the normal sign-up rate for a full year was 7000.
Because of this demand, in December last year we expanded the reboot to a total of 14,000 places. And they too have been filling up quickly.
Today, I am pleased to announce that the scheme will be expanded again because of continuing high demand.
Budget 2014 will provide up to $20 million to expand the Apprenticeship Reboot by 6000 places.
This move will boost the total number of places to 20,000.
This extension means we have doubled the number of apprentices that can get their training costs subsidised since the scheme was first announced.
Both are about helping young people get into work. The first job is often the most important one.
3 News reports:
More than 21,000 people have had their benefits cut since rules around overseas travel were tightened, Social Development Minister Paula Bennett says.
More than $10.5 million has been saved since July last year by suspending the benefits of those who chose to travel, Ms Bennett says.
The largest group of suspensions applied to nearly 11,200 people on job seeker benefits, followed by more than 4800 sole parents.
More than 1750 people had their benefit suspended for multiple overseas trips.
The figures don’t include people receiving superannuation.
Hard to be looking for a job when you’re overseas!
Almost 5000 people have had their benefits cancelled because they failed to reconnect with Work and Income eight weeks after their departure from New Zealand.
Ms Bennett said although the rules are tighter, they still allow for overseas travel on compassionate or health grounds in certain cases for job seekers.
People without work obligations may in most cases travel overseas for up to 28 days.
As we all know now Labour lied when they said 60,000 families a year will get Labour’s promised $3000 baby bribe or “Best Start Payment”. We now know that the 25,000 families who get paid parental leave will not get it for a year, just six months. So they’ll get $1,500 only – not $3.000
But the fine print also reveals that the 15,000 families who get the Parental Tax Credit of $1,200 will lose that, so their net gain will be a mere $1,800.
The PTC goes to families who do not get paid parental leave, are not on a benefit and earn under $80,000 to $110,000 (depending on number of children).
So that means only around 20,000 families will get the full $3,000 that Labour claimed 60,000 families will get.
So who are those 20,000 families. They are either beneficiaries or those earning around $100,000 to $150,000. They are the only ones who get the full $3,000.
Not exactly well targeted support. And very different to what Labour’s speech and advertisement said.
If Labour hadn’t wanted to deceive, they would have done tables showing how different families would be impacted – what they gain and what they lose. But instead they did tables just showing what they gain.
3 News reports:
Labour sold the baby bonus as $60 per week “for a baby’s first year”. But the truth was buried in the fine print. For most parents it only starts after an expanded 26 weeks of paid parental leave.
Labour’s own publicity showed the $60 payment applying from birth to age one. It actually starts after six months.
“If the parents are getting paid parental leave, they don’t get this concurrently,” says Mr Cunliffe.
“When I read the speech and looked at it, I thought absolutely you got it for the entire year your child was under one year of age,” says Prime Minister John Key. “I think David Cunliffe is being very tricky. I think he’s actually trying to mislead the New Zealand public.”
And further it seems you may be earning hundreds of thousands you until having the baby, and still get the baby bribe:
If Labour wins power, all families who earn less than $150,000 will get the bonus. Mr Cunliffe says that limit would be judged when they had the baby and were down to one income.
“It applies to income at the time they are applying for the $60-a-week benefit,” says Mr Cunliffe.
That means a couple earning a total of up to $300,000 would get the bonus if one took leave to be with the baby and they fall under the $150,000 mark. But before this could be properly clarified, Mr Cunliffe walked off.
It’s even worse than that. If Theresa Gattung was still CEO of Telecom and took a year off from being CEO to have a baby, then she’d get the baby bonus (if her partner earns less than $150,000) even though she was returning to a job that paid over a million dollars a year.
Matthew Hooton also looks at the policy. He notes:
- A family on $49,000 with a three year old will be taxed to pay an upper-middle-class welfare to families on $149,000 with a three month old.
- As a parent he knows the first year of a baby’s life is the cheapest as they eat so little. Costs rise as they get older.
- Will increase child poverty as the experience in Australia is that a baby bribe bonus increases the birth rate, leading to larger families in communities that can least afford it
Matthew also picks up on the point I highlighted a few days ago. David Cunliffe claimed that one in five Kiwi kids can’t afford a second pair of shoes, when in fact the real number is one in 20. He generously suggests Labour mixed up 20% and one in twenty!
UPDATE: Patrick Gower blogs on Labour’s misleading policy:
The Labour Party has been putting voters wrong about its baby bonus.
Labour has been deliberately misleading, and in my view dishonest by omission.
On Monday night I told 3 News viewers that under Labour’s $60 a week baby bonus policy, families would get $3120 a year for their baby’s first year.
A simple calculation you might think, of $60 mutiplied by 52 weeks, given David Cunliffe announced in his State of the Nation speech: “That’s why today, I am announcing that for 59,000 families with new-born babies, they will all receive a Best Start payment of $60 per week, for the first year of their child’s life.”
Now most normal people would think that means “all” those parents will get the payment “for the first year of their child’s life”.
But it wasn’t true – not that you would know that from Cunliffe’s speech, media stand-up, the MPs who were there to “help” and all the glossy material handed out to us.
Because buried in the material was a website link that takes you to a more detailed explanation policy.
And on page six of that policy document, in paragraph 3, it revealed the payment would commence at the “end of the household’s time of using Paid Parental Leave, ie. after 26 weeks in most cases.”
So translated, in most cases, the $60 a week payment is not for the first year, but for the second six months.
Most journalists, like our office, only had time to find this overnight on Monday.
Here’s a question. When all the media reported the policy as applying for a full year, instead of six months, did anyone in Labour contact them and tell them they were wrong? Or were they happy for the media (like everyone else) to report it the way they did, and hoped they wouldn’t notice the fine print?
Now Cunliffe and Labour knew this $3120 for one year figure was wrong, but nobody rang to correct it.
Usually political parties and the taxpayer-funded spin doctors are screaming down the phone if there is an error (and rightfully so, I might add), but in this case Labour was dead quiet.
And I believe that’s because Labour wanted the punters to think it was $60 for a year.
They were desperate to get cut-through and were happy to omit key information and let the wrong message get out there.
And I think that is deliberately misleading and dishonest from Labour.
At some point, I’m sure senior Labour people made a decision to omit key details on the day to maximise publicity – it was no mistake.
But not the way to win friends and influence people.
And it goes on: Labour’s Sue Moroney has just explained to me that there are 60,000 births in New Zealand each year, 59,000 of those families earn under $150,000, 26,000 are eligible for paid parental leave, meaning 23,000 will get the $60 for the full twelve months.
That means Cunliffe should have said 23,000 people will get the baby bonus for a year, which is not “most” of the 60,000 familes that have babies each year – it’s actually under half.
Interestingly it means the baby bonus will mainly go to those who were not working when they got pregnant!
Cunliffe also struggled to explain yesterday whether families would be judged on their pre-baby double income (ie. two earners of $140,000 each, getting $280,000) or after-baby income $140,000.
This seems a pretty straightforward aspect to me, and I wonder if it was policy-on-the-hoof. He either didn’t know the policy properly or was trying to avoid showing how generous the policy is.
For the record, it’s judged on the after-baby, one income and Cunliffe says he misunderstood the questions from myself and Brent Edwards.
So as I said above, the CEO of Telecom could get the baby bonus if she takes a year off. This isn’t middle class welfare, but universal welfare – which we pay for!
The bonus kicking in after six months is nothing to be ashamed of. It is a generous policy and has set the political agenda this week.
Labour didn’t have to be dishonest – it could have just told voters the truth.
Media will be very very careful with the next announcement to ignore the speech and press release and look for the fine print.
Labour’s baby bribe doesn’t just apply to those working and earning $148,000 a year, but also to those not in work.
One thing that interested me is how much money would someone on the
DPB Sole Earner Benefit receive under Labour with their new policy. This excludes childcare subsidies or the like, and is just direct welfare payments. For someone in Auckland and with 1 or 2 children it would be:
- DPB $295
- Accom Supplement $160 (1) or $225 (2)
- Family Tax Credit $98 (1) or $166 (2)
- Baby Bribe $60
That is a total of $613 a week in the hand if they have one child aged under 3 and $746 in the hand for two children under three.
If you gross that up to an equivalent pre-tax wage, that is around $37,500 if you have one child and $45,700 if you have two children on the DPB.
The Greens would go further. They want the IETC for working parents paid to those on the DPB also. That would increase the equivalent gross salary to $41,000 for being on the DPB and having one child, if you are receiving the maximum accommodation supplement in Auckland.
Labour have said if you earn under $150,000 a year you need welfare payments from the Government if you have a baby. The following MPs have a salary below $150,000 so if their partner is not working and they (or their partner) has a baby, taxpayers will have to fork out a baby bonus to them under Labour.
- Grant Robertson, Labour
- Shane Jones, Labour
- Jacinda Ardern, Labour
- Chris Hipkins, Labour
- Nanaia Mahuta, Labour
- Phil Twyford, Labour
- David Shearer, Labour
- Su’a William Sio, Labour
- Phil Goff, Labour
- Louisa Wall, Labour
- Andrew Little, Labour
- Moana Mackey, Labour
- David Clark, Labour
- Kris Faafoi, Labour
- Carol Beaumont, Labour
- Megan Woods, Labour
- Darien Fenton, Labour
- Trevor Mallard, Labour
- Poto Williams, Labour
- Clare Curran, Labour
- Rajen Prasad, Labour
- Raymond Huo, Labour
- Rino Tirikatene, Labour
- Meka Whaitiiri, Labour
- David Clendon, Greens
- Denise Roche, Greens
- Gareth Hughes, Greens
- Holly Walker, Greens
- Jan Logie, Greens
- Julie Anne Genter, Greens
- Kevin Hague, Greens
- Mojo Mathers, Greens
- Andrew Williams, NZ First
- Richard Prosser, NZ First
- Brendan Horan, Independent
- Phil Heatley, National
- Kanwaljit Singh Bakshi, National
- Ian McKelvie, National
- Simon O’Connor, National
- Paul Foster-Bell, National
- Claudette Hauiti, National
So the question I would ask each of those MPs is if they agree it is a good use of taxpayer money to give them a welfare payment of $3,000 a year if they or their partner chose to have a baby? Do they think that on their salary of $147,800 that taxpayers should be giving them welfare payments if they or their partner have a baby?
Here’s an interesting aspect of Labour’s announcement yesterday.
If a low to middle income family already has kids at school, they get nothing at all. Say you have three kids at primary school and your family income is $60,000. You get not one cent as far as I can tell.
But if you are a backbench MP who gets pregnant, or whose partner gets pregnant, in the near future, then Labour will give you $60 a week for a year.
This is why National should offer tax cuts, because all working families benefit from tax cuts, including those who have already had their babies.
Labour’s launched its election year lolly scramble with child payments of $60 a week to all families with newborns, who earn a total annual income of up to $150,000.
My God. We’re turning families on $140,000 into beneficiaries.
Welfare should be targeted at those most in need. A family on $140,000 with one child do not need our taxes.
At the other end of the scale, this is a huge incentive to have more children if you are already on welfare.
Labour says 59,000 families – or 95 percent – would receive the payments until their child’s first birthday, and payments of up to $60 a week will continue for “modest and middle-income” families until their child turns three.
I presume this is on top of Working for Families, so in fact every extra child you have on welfare will get you an extra $120 a week.
UPDATE: Was pointed out on Twitter that backbench MPs will be eligible for this new welfare payment. Yep, if a backbench MP gets pregnant (or their wife gets pregnant), then taxpayers will be paying them $60 a week welfare because they’re in such dire need. Sickening.
UPDATE2: According to this fact sheet, a sole parent beneficiary will now get $128 a week more if they have a second child while on welfare.
The SST reports:
Extended members who care for children who are not their own will get an extra $35 million in benefits, the Government will announce today.
More than 12,400 kids in New Zealand are cared for by relatives, often grandparents, when their parents are either incapable or unwilling to raise them, often due to drug use, violence, neglect and mental health issues.
Around 8500 foster parents already receive an unsupported child benefit, with the Government paying out about $111.5m between July 2011 and July 2012. But many say the money is not enough.
Social Development Minister Paula Bennett said today’s funding package would include a one-off establishment grant of $350 when a carer takes a child into their home. It would also include a “start-of-year payment” that will range between $400 for kids under five and $550 for children over 14 to relieve caregivers having to buy school uniforms and pay fees.
The ministry will also set up a discretionary extraordinary care fund of up to $2000 a year for children with significant difficulties, or who show promise. This fund will become available in July 2014.
I have huge respect for those people who care for children who are no theirs.
A 9-year-old’s comment about how “cool” it was to be on a benefit has changed a Huntly woman’s life.
Until six months ago, Judy Wilson was one of about 80,000 sole parents in New Zealand receiving a benefit.
She was devoted to raising her six children but, in her own words, she was also drinking, smoking, and not doing “anything”.
And she had been for close to 20 years.
“It was my nine-year-old that said, ‘It’s cool being on the benefit because you’ve been on it for so long, eh, mum. I’m going to go on the benefit too’.”
Wilson, 43, said she was “shocked” to think her circumstances would have such influence on her daughter, and the comments jolted her into action.
She started a six-week course at WINZ in order to pick up new skills and followed it up with another, more specific course, in caregiver training for about eight weeks.
Since July, she’s been working at Kimihia Home and Hospital in Huntly.
That’s a good outcome. I think we can not under-estimate the impact family has on a child’s expectations. If a child grows up in a household where no adult has ever worked, then they could well decide that work is an option, not a necessity.
Rodney Hide writes in the HoS:
Let’s start with the numbers. They aren’t mine. They come from a recently published Ministry of Social Development “factsheet”.
A total of 76,000 New Zealanders were born in 1993. About 6000 were subsequently abused or neglected; 3000 became known to the Youth Justice system by the age of 17; and 41,000 – more than half – spent time in a household dependent on a main benefit such as the dole or DPB.
The benefit-supported children were six times more likely to be abused than those who were not benefit-supported. And they were 14 times more likely to be known to Youth Justice.
Those in households benefit-dependent for nine or more years were 13 times more likely to be abused and 29 times more likely to be known to Youth Justice.
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.
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.
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?
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%.
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.
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!
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.
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.
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.