When to stop having kids?

December 12th, 2013 at 11:00 am by David Farrar

Stuff reports:

Alana Jones is not your typical foodbank client.

Her husband has a good income, she was employed until the birth of her 5-month-old baby and she is not eligible for a benefit.

But with up to eight mouths to feed, constant rent increases and only about $200 for bills and food each week, she needs help.

This is the second time in two weeks Jones has visited the Christchurch City Mission for a food parcel.

Between Jones and her partner they have six children. They live in a “cold, damp” three-bedroom rental in Avondale. Two children have asthma and one has a heart defect.

She is $25 over the threshold to be eligible for a Housing New Zealand property, and her husband earns “just” too much for them to qualify for a benefit.

After rent, bills and petrol are paid from her partner’s $700 weekly income and their $420 Working for Families supplement, Jones estimated they had $200 to spend on food “if we’ve got it”.

Making ends meet was now getting “harder and harder”.

“We look back at what we used get and you can’t get that any more.

“We’ve lost internet, phone, TVs – so you can imagine it’s like camping. We can’t afford the bills.”

As well as having six children, Jones has five cats she rescued after the earthquakes and “can’t part with”.

She said she had “no money to free up anything” for her children. They could not afford school shoes, so they bought $5 pairs of canvas shoes each week to compensate.

It was her daughter’s birthday last week, but there were no presents.

“They don’t understand [our situation].”

To earn extra money on the side, Jones’s partner has been buying things off Trade Me, doing them up and reselling them, and they have been selling eggs from their chickens.

But they are still in the red.

I have huge sympathy for Mrs Jones. Raising six kids on what is now a single income must be incredibly difficult. The kids looks delightful and well cared for, and the sacrifices they are making to make ends meet is commendable.

According to the WFF calculator they should be getting $494 WFF a week, but that is based on assuming all six kids are young. Without the ages of each kid, hard to know.

But regardless of how much WFF is, the reality is that caring for six children on a single salary of $700 a week is, I am sure, incredibly hard.

The question I have is why they decided to have a sixth child, when presumably their finances were already stretched to the maximum. I don’t want to sound critical of what seem to be a great hard working family. It may be that the pregnancy was unplanned. But I think there is a general principle that the vast majority of families decide to limit the number of children they have to the lower of how many they want and how many they can afford.

I think we should have a welfare system that helps families with one or two kids, as I think you want every couple that wants children to have them. But whether we should be using limited taxpayer money to fund families than have four, five, six, seven kids etc – there I am less convinced. We do of course provide WFF for additional kids, but that is not a substitute for a couple deciding if their own incomes can support further children.

No Working for Families for those not working

August 30th, 2013 at 6:04 pm by David Farrar

NewstalkZB reports:

The Court of Appeal has dismissed an appeal by the Child Poverty Action Group which challenged the Government’s in-work tax credit, saying it discriminated against beneficiaries.

The Child Poverty Action Group (CPAG) had said the credit, which is worth at least $60 a week and applies only to working parents, not those on a benefit, was unjustified discrimination.

The challenge was the subject of a court hearing in the Court of Appeal in May.

CPAG alleged the “off-benefit rule” that the in-work tax credit was available only to those in full-time employment who were not receiving an income-tested benefit breached the Human Rights Act and the New Zealand Bill of Rights which prohibit discrimination on the grounds of employment status.

CPAG took the case to the Court of Appeal after both The Human Rights Review Tribunal and the High Court ruled against it.

The Court of Appeal said while it disagreed with the High Court on one aspect of the appeal, it did not affect the final outcome.

The Court of Appeal found that the off-benefit rule, on its face, subjected beneficiaries to different treatment that amounted to a material disadvantage but the rule ultimately did not breach the Bill of Rights.

“This is because the in-work tax credit deliberately created an earnings gap between people on a benefit and people who are working. The objective was to incentivise people into work and improve incomes for families with children,” the Court of Appeal judges said in their decision released today.

Thank goodness for that. It would have been ridiculous to have had the courts say that the Government can not pay a working family (who have costs such as travel to work) more than a family on the benefit.

However Labour and Greens last election both campaigned to change the policy, so that beneficiary families can get the In-Work Tax Credit. I guess they’d have to rename it!

The living wage campaign

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

The Herald reports:

A campaign has been launched for a “living wage” in New Zealand, inspired by policies in United States cities and London.

In New Zealand, Labour Department research shows that 103,800 workers under 25, and 161,000 aged 25 to 64, earned less than $15 an hour in the year to last June.

I have no issue with the campaign. But I caution that not all employees and not all employers are the same. I don’t think a 16 year old earning $14 an hour in an after school job is an issue. I think it is more of an issue if someone is earning that 10 years later. But also wages can only be paid if a company is earning enough income to employ people. An increase in costs can make a company unprofitable. This is why in the main individual employers negotiate agreements with individual employees – because that reflects the position of both of them.

Low wages for the Kaufisis mean the children don’t go to school when there is no money for lunch.

Leo Kaufisi, of New Lynn, earns $14 an hour as a dispatcher for Pacific Inks in Avondale. His wife Lopaini earns the legal minimum of $13.50 an hour as a cleaner.

Four adults and eight children live in the three-bedroom house which they rent for $350 a week – Mr and Mrs Kaufisi, their six children aged between four and 12 , Mrs Kaufisi’s unemployed mother, her mother’s partner, her 12-year-old sister and 10-year-old brother.

Six children sleep in one cramped bedroom.- The other children sleep with their parents.

Mr and Mrs Kaufisi are both working hard to care for their family. I have no problem with taxpayers helping them make ends meet. Sadly the article doesn’t detail what this support is.

I presume the two other adults receive the unemployment benefit. So my estimate of the weekly net income is:

  • Mr Kaufisi $471
  • Mrs Kaufisi $455
  • Family Tax Credit $598
  • UEB (couple) $342
  • Accom Supplement $32

This is a total net income of $1,898. The equivalent gross before tax income (if it was a single earner) is $2,627 a week. That is a gross annual equivalent of $136,604. Now that is for a large family, but it gives a more complete picture than just talking about $13.50 an hour.

Even with family tax credits, Mr and Mrs Kaufisi say almost all their income goes on the rent and on payments to finance companies. These total about $500 a week for furniture and other items including two cars, which were both repossessed recently when Mr Kaufisi’s work permit expired.

Actually the rent is under 20% of the net income, according to my calculations. The problem is the finance company payments.

Having 12 people in a three bedroom house is massively over-crowded. It is not clear if they are in a state house, but it seems to me they would easily qualify.

Mrs Kaufisi said their combined wages now were not enough to live on and she supported the call for a “living wage”.

“With a living wage, maybe we can afford to rent our own place or buy healthy food for my kids,” she said.

I’m not sure higher wages will make a huge difference to their household. I think the biggest issue is only two out of 12 people are earning. Let’s assume that both the Kaufisi’s get paid $17.50 an hour, or $35,000 a year. What would this do to their income:

  • Mr Kaufisi $584
  • Mrs Kaufisi $584
  • Family Tax Credit $524
  • UEB (couple) $342
  • Accom Supplement $0

This is a total of $2,034 a week. That is an extra $136 a week, but only a 7% increase in net income despite it being a 30% increase in wages for Mrs Kaufisi and 25% for Mr Kaufifi.

A speech by John Key

May 11th, 2011 at 12:36 pm by David Farrar

John key’s speech is here. Key points:

  • WFF, interest free loans and KiwiSaver costing $5b a year, and why we now have a structural deficit, and all has to be borrowed from overseas
  • All changes will take place after election, so there is a mandate for them
  • KiwiSaver will be changed so that over time employees and employers contribute more, and the Government less
  • KS changes will lead to an improvement in the rate of national savings and reduce foreign debt by 2% of GDP over the decade
  • Will reduce amount spent on WFF, but target a greater proportion at the most vulnerable families
  • For every $100 of student loans, taxpayers get only $55 back
  • Half of the overdue student debt is students living overseas – will make sure they live up to their responsibilities

The exact details will be in the budget. To me it looks like a good step in the right direction.

Fallow on paying for the quake

March 4th, 2011 at 10:00 am by David Farrar

Brian Fallow writes:

Key is right to be dismissive of the idea of an ad hoc tax akin to the Australian flood levy.

If levied on the same basis – half a cent in the dollar of income for those earning between $50,000 and $100,000 or 1c for those earning above $100,000 – a back-of-the-envelope calculation indicates it would bring in a bit less than $500 million. About half would come from those earning between $50,000 and $100,000.

There is an opportunity cost to such an impost. It is money they cannot spend on consumption or investment elsewhere in the economy.

The economy started this year without a whole lot of momentum.

Export prices are at all-time highs, true, but many farmers are using the money to pay down debt and the flipside of the commodity boom is more and more of people’s incomes is soaked up by such necessities as food and fuel.

For firms chasing the consumer’s discretionary dollar an ad hoc levy is the last thing they need.

I totally agree. Putting taxes up when you are on the verge of a recession is daft.

As for calls for cuts to programmes like Working for Families or student loans, the case for such policy changes is no better or worse than it was before the earthquake.

They should be considered on their long-term merits. They should not be trundled through under cover of an all-purpose excuse, the cost of Canterbury’s misfortune.

I also agree. An inctreased abatement rate for WFF should occur because National doesn’t believe in welfare to relatively wealthy families, not because of the earthquake. The earthquake may prove to be a catalyst for considering the issue, but any change should be subject to an electoral mandate in November.

The response of both the previous Government and the present one to the global financial crisis and accompanying recession was to loosen fiscal policy.

They cut taxes and they let the automatic stabilisers work. As revenue took a hit and more people landed in the social safety net, operating surpluses turned to deficits and public debt rose (from a very low base).

They let the Crown’s balance sheet take the strain. It was the appropriate policy then and it is again.

This is a one off shock. The balance sheet is the appropriate place to take the strain, so long as the level of debt is not so great that the interest on the debt leads to structural deficits – it there is still a credible path back into surplus.

Working for Families

March 3rd, 2011 at 4:25 pm by David Farrar

The Government has said they will look at some changes to working for families, as one way to help free up some money for the earthquake recovery. The possible changes are to remove eligibility for higher income families to it.

At present, familes (in work) receive WFF up to the following income bands:

  • 1 child – $75,317
  • 2 children – $91,227
  • 3 children – $107,137
  • 4 children – $126,947
  • 5 children – $146,757
  • 6 children – $166,567

Now I have long advocated that a family earning $107k a year (let alone $127k a year) should not be receiving welfare. Welfare should be for those who truly need it.

It is also economically very inefficient to tax people, and then give them some of it back as welfare. One should minimise what they call churn.

Also on a personal level, I have no qualms about paying taxes to help a family on say $40,000 with two kids. Bit I do have qualms about paying taxes to be handed over to a family earning $125,000 a year, just because they have decided to have lots of kids.

Now National said they would not alter WFF during this term, and I believe they should honour that. The earthquake recovery will not just be taking place in the next six months. It is good that National will possibly (all they have said is they are not ruling it out) look at changes to WFF, but they should make them an election policy, and implement after the election if re-elected – as they are doing with partial asset sales. It is vital to get a mandate for this. Yes the earthquake is a game changer, and you can use it to justify a pre-election change. And if the election was two years ago, I’d argue you might not be able to wait. but the election is only six months away.

You might even announce changes in the budget to take effect on 1 April 2012, but hold off making any change until after the election, so said mandate is gained.

Now if the intent is to not have WFF, for more wealthy families, how would one do it? There are three ways.

  1. Reduce the base level of WFF for everyone. This means that it will abate out at a lower level. The problem is that all WFF recepients end up with less money, so it is not well targeted.
  2. Reduce the level at which WFF starts to abate. The family tax credit starts to abate at around $37,000 and the in work tax credit at around $59,000 (for a one child family). reducing the abatement level for the family tax credit would catch too many people on relatively modest incomes of $45,000 etc. You could arguable reduce the level at which the IWTC abates, but again this may not be that well targeted.
  3. The third option is to increase the rate of abatement above a certain level. The downside is that it increases the effective marginal tax rate for that family. The abatement rate is currently 20% and if paying a tax rate of 33%, means an EMTR of 53%. If they also have an accom allowance (unlikely)  that abates at 25% then the EMTR is 78%.

What I would consider is increasing the abatement rate from 20% to 25% just for those earning over $70,000 a year. You see National dropped the top tax rate from 39% to 33% (something Labour vows to reverse)for those earning over $70k year so the EMTR would still be slightly lower than it was under the last Government if they are a sole income family.

Now one could say is there any point in reducing the top tax rate by 6% and increasing the WFF abatement rate by 5%. Well yes there is. It is better to have a lower tax rate and not pay a relatively wealthy family welfare, then have higher tax rates and higher welfare payments. Tax churn is inefficent and wasteful.

So what would an extra 5% abatement do for WFF maximum incomes? They would be:

  • 1 child – $75,317 to $74K
  • 2 children – $91,227 to $87K
  • 3 children – $107,137 to $99K
  • 4 children – $126,947 to $115K
  • 5 children – $146,757 to $131K
  • 6 children – $166,567 to $147K

It would be a small modest step in the right direction of saying wealthier families should not recieve welfare. And it would leave Labour in the ludicrous position of having to argue that a family on $120,000 should not receive a tax cut but should receive welfare.

WFF and Tax

May 21st, 2010 at 11:00 am by David Farrar

I’ve done some calculations on what the tax cuts mean for working families who get WFF payments. The assumption is one parent working rather than two, which is the conservative scenario maximising tax paid.

The pink line is the standard average tax rate at each $10,000 band.

If you have even just one child you do not pay any income tax until you are earning $42,000! And you keep receiving WFF until you earn $74,000.

With two kids, then your family pays no income tax $50,000 of income. And you receive WFF until you earn $89,000.

If kid number three turns up, then you pay no tax until $56,000 and you receive WFF payments until you income exceeds $105,500.

And for the Catholics amongst us, kid number four means no net income tax until you reach $63,000. And you keep getting WFF until your combined earnings exceed $120,500.

Who to blame, and what to do with the economy

December 22nd, 2008 at 9:00 am by David Farrar

The set of economic forecasts inherited from Labour were bad enough reading last week. But then on Friday, I noticed that Finance Minister Bill English said that the economy is already nearly at Treasury’s worst-case scenario.

So how bad is the now likely worst case scenario:

  • Unemployment peaks at 7.5% in mid 2010
  • Economy contracts in year to March 2010 as well as March 2009
  • OBEGAL deficits of $32 billion from 2009 to 2013 – averaging greater than $8 billion a year
  • Gross debt to increase from $35 billion to $82 billion over four years – a $47 billion increase
  • Net debt to increase from $6 billion to $54 billion
  • Gross debt as % of GDP to go from under 20% to 39% in four years, and to 76% by 2023

This is a worse outlook than Labour left National in 1990. And you can’t even compare to the 1999 PREFU which was:

  • Operating Balances growing to almost $2.5 billion
  • net debt falling from 22% to 18%
  • Economic growth of over 3% a year
  • Unemployment to reduce from 7% to 5.7% over two years

Cullen was left with a wonderful set of projections.

So the next few years are going to be a disaster in fiscal terms. So who is at fault? Well of course the main responsibility is the global credit crisis – that goes without saying. But why are our fiscal fortunes so fragile, than a crisis such as this fucks our economy for the next decade or more? Let’s look at some of the possible culprits.

National’s tax cuts

If anyone blames the deficits and debts on National’s tax cuts, then they are incompetent or lying. The tax cuts were 99% funded from changes to KiwiSaver, and other expenditure savings. They have no impact on the deficit or debt.

In fact National’s tax cuts are (in hindsight) an even better idea than when first mooted? Why? Because they contribute towards a total fiscal stimulus package of 5% of GDP – this is one of the largest in the OECD and may help soften the recession.

But even better, the tax cuts are not funded from cutting current spending (which would detract from the stimulus) but by reducing subsidies into KiwiSaver which would lock the money up for decades.

We’ll come back to the issue of KiwiSaver.

Labour’s tax cuts

So how about Labour’s tax cuts? Is all this fiscal doom and gloom because Labour finally gave in and delivered tax cuts? Well it is certainly true that Dr Cullen has indicated he would have not cut taxes to the extent he did, based on PREFU’s numbers. And many people suspect Labour, if re-elected, would have cancelled some or all of their tax cuts.

The cost of Labour’s tax cuts over four years is $10.8 billion. So yes, if Labour did not cut taxes at all in their nine years of office, then the fiscal situation would be slightly better. Of course taxpayers would be worse off, but who cares about them!

But compare that $10.8 billion to OBEGAL deficits of over $30 billion and an increase in debt of almost $50 billion.  If Labour had not delivered tax cuts (and had not spent the money saved – a big if), it would have somewhat improved the fiscal outlook, but left households worse off, and made the recession worse.

Labour’s tax cuts were equivalent to a one off $3.3 reduction in taxation – the only personal tax reduction in nine years, where taxation went from $32 billion to $57 billion.  It is probably the most modest tax reduction program in the western world.

Labour’s Spending

What has really left us with a massive problem, isn’t Labour finally doing a $3.3 billion annual tax cut, but the massive increases in annual expenditure.

Expenditure has increased from $34 billion per year to $57 billion. That is a $23 billion hike – or seven times as great as the belated tax cuts.

Now of course some of this is necessary increases – even Sir Roger advocates you should increase spending in line with inflation and population growth. But off memory that is still $18 billion a year in extra spending.

And this is the problem Labour has left us. They massively increased spending in non-essential areas, on the assumption that we would have record growth and surpluses forever. They didn’t just keep funding and improving existing programmes (schools, hospitals) but they invented new schemes. Now these schemes were arguably good things – but they were funded based on an assumption of growth and surpluses. And together they combine to remove flexibility from future Governments.

Let us look, at just three of them:

The Cullen Fund

The Cullen Fund was based on a premise that as we are going to have surpluses for the next 30 years, then we should save some of those surpluses to meet the future cost of superannuation, so we won’t have to borrow money in the future.

The fatal flaw was always the assumption about surpluses, but as the years went on and they continued unabated, the opposition to the Fund diminished, and even National signed up to it.

But we are now in a very different situation. We have a structural deficit, and face massive borrowing for at least a decade.

So the Cullen Fund is now based on borrowing heaps of money today, so we do not have to borrow heaps of money in 25 years? Anyone else see the fatal flaw? Borrowing money to save money is the sort of stuff that cuased the credit crisis.

The Government should seriously consider suspending contributions to the Cullen Fund. We can’t save money we do not have.


KiwiSaver has much the same problem as the Cullen Fund. It is all well and good to help subsidise people’s savings, but not if the taxpayer is having to borrow money to do so.

Because who is going to have to pay back and pay the interest on all that borrowing? Those same savers. So once again we have the stupidity of borrowing money today, to help people save. That is not sustainable.

I like KiwiSaver. If we were going to continue with record surpluses, it would be great to have a scheme which provides massive incentives for people to save. But we don’t. Does anyone think Labour would in 2009 have announced the KiwiSaver subsidies they did in 2007? Of course not.

National has wisely already cut the cost of taxpayer subsidies to KiwiSaver. Arguably they need to go further and also look at whether the employee subsidy is affordable. If we need to borrow to find it, then it isn’t.

You see the employer matching contribution is a 1:1 subsidy already, which is massive. Hell most people are happy to get a 10% return on investment and the employer contribution gets you an instant 100% return. Now the employee subsidy gets you a further 100% return, so those earning up to $52,000 get a 2:1 subsidy or a 200% return on investment.

Unless the fiscal fortune improves, maybe the employee subisdy has to go also. Sure that means only a 100% return instead of a 200% return, but that is a lot better than the standard 10% return and I doubt it would discourage people going into KiwiSaver. Maybe raise the employer contribution rate to a maximum 3% so the total saved isn’t decreased.

Working for Families

This is another major spending commitment that falls into the category of unaffordable with hindsight. Basically whenever Labour had spare cash they hoovered it up into this targeted welfare assistance programme. And now taxpayers are going to have to borrow billions of dollars to fund this programme.

Unlike the other two programmes though, this one can’t be easily reformed. Families have grown used to having the extra cash, and in the midst of a recession, it would be quite wrong to take the money off them.

But what does need to be done, is some medium-term work on a better tax and welfare system that has less tax churn.

The full English quote

August 4th, 2008 at 10:25 am by David Farrar

08wire has a transcript of the audio recording of Bill English. It is copied below:

ENGLISH: The basic point is… We spend a lot of time on this. The basic dynamics of it are… you look at it from the punters point of view – they’re saying they don’t like the government, and Clark, they took all this frickin’ tax off me and they spend billions of it, and it went on What’s Up badges and websites and bullshit


ENGLISH: They got a bit fat.


ENGLISH: And all our work tells us they’re pretty keen to keeping the bit they’ve got. And we call them Labour-plus voters – and they’re sitting there thinking “that nice man Mr Key is pretty smart – he’ll get me a bit more.” They’re not saying “that nice man Mr Key will take something off me” – they’re saying “he’ll give me a bit more”.

And the reality is if we had been the government with the surpluses they had, we would have had something, like working for families, but not the same. We would have given them quite a bit of cash back. And what happens is – you go in there to try and change it, frankly Don and co got a bit carried away, cos they didn’t understand it. If you give people money then, it is very hard, there’s a set of inevitable problems. It’s like physics, right. If you push something up its gonna drop. If you give people cash, you have high marginal tax rates. OK, that’s it. You can’t get round that. Don thought he could but he couldn’t. So did John, actually – but you can’t. So the only – the raw choice is: fix the problems; or take money off them. And there’s no way you can fix the problems without taking money off them. So we’re sitting here saying the punters are keen to keep it. They’re facing a recession. The last thing we want is to spend the whole election campaign with families of four on TV saying “Mr Key’s taking money off us”. You can’t do that.


ENGLISH: So later on we’re gonna have to have a bit of a sort out. Yeah, we’re gonna do something, but we can’t do it now.

NATIONAL DUDE: What about selling Kiwibank?

ENGLISH: And actually, we just have one guy with a spreadsheet. And it’s bloody complicated.

NATIONAL DUDE: I’m sure you’ve Lockwood Smith’s spreadsheet…

ENGLISH: Oh yeah yeah, it is.

NATIONAL DUDE: What about getting rid of Kiwibank, I mean…

ENGLISH: Well, eventually, but not now. Well, its working. A lot of our supporters get a bit antsy about it, but its working. It’s like a lot of things…

The Working for Families aspect is very interesting. People forget National actually introduced child tax credits and the like. Labour gave it a slogan, and extended it.  So it is quite unremarkable that Bill says National would have done something like WFF, but not the same. I expect it would have been like the 96 and 98 packages where National both cut taxes and put money into family support/child tax credits. It has been the lack of balance from Labour which has been the problem.

The comment on high marginal tax and abatement rates are the same comments I made last week – it is a very challenging trade off.

The full Kiwibank quote is revealing also, because it has Bill saying Kiwibank is working, that there is no need to change anything despite supporters being antsy. That is pretty obviously saying nothing will happen against the policy – just a desire for the future.

This will of course be messy, as any taped conversation is where an MPs personal opinions differ from a party’s position. A tape recording of what Michael Cullen really thinks of tax cuts would be fun. But does that mean a party will break its election promises? Nope – both Labour and National did that in the 80s and 1990, and have been scarred by the experience since. No one wants to be a one term Government.

I fully expect National in Government will look at Working for Families (in fact I strongly urged them to do so) and also ownership of certain assets. And if they come up with a good case for change, will include them in their manifesto for the 2011 election.

Working for Families

July 28th, 2008 at 7:16 am by David Farrar

It is disappointing but not totally surprising that National is not making changes to Working for Families in its first term.

There are two aspects to Working for Families which I don’t like. They are:

  1. Families with six figure incomes get what is effectively a welfare benefit
  2. The overall tax and abatement rate for parents earning above $60,000 is around 89% (39% tax rate, 25% accom supplement abate and 25% WFF abate off memory)

Now the solution to no 1 would normally be to just abate WFF at a faster rate. But that then makes problem no 2 even worse. So the other solution to no 1 is to have it start abateing at a lower level or to reduce the level of payment for everyone.

Now if one pursues the latter possibilities, you want to do it in a way where tax cuts compensate so no one gets a take home income drop. This is not the time to be reducing anyone’s take home income.

I suspect it just got too difficult to try and design such a scheme in Opposition. I actually worked in the early 2000s with Lockwood Smith on some potential tax formulas which could take into account number of children, and hence deliver all assistance just through the tax system. The problem is many families pay negative income tax, so that wasn’t possible. Plus I am not sure IRD would have appreciated having a parabolic equation as part of the tax code 🙂

My hope is that if National is elected, they will get officials to look at a way to restructure Working for Families and the tax system, and then go into the 2011 election with that as a policy for which they seek a mandate. The deadweight costs of high income families paying tax which just gets delivered back to themselves as WFF welfare is quite considerable. If we want to grow the economy faster than Australia we do need to reduce this “churn”.