This post is by PaulL, a regular commentor and occasional contributor.   It is the second post in a series on the financial incentives to work and the impacts of our tax and transfer system on household formation.  The index to all posts in the series can be found here.

When we talk about incentives to work what matters is the impact on the next dollar – the impact at the margin.  People care about the impact of the change from their previous situation.  I wasn’t working and now I am.  How much extra money do I get than I had before?  I was working 20 hours a week, now I’m working 24 hours.  How much extra money do I get?

At a headline level the lowest marginal tax rate in NZ is 14%.  So if I work four extra hours at minimum wage, I should get $21.20 x 4 hours x 86% = $73 cash in the hand.  Easy, right?

But remember that I’m getting a benefit.  I may be getting an accommodation supplement.  I may be getting childcare support, and I get tax credits via working for families.  All those government programmes have some form of threshold and abatement rate.

If I work an extra hour I get $21.20 gross income.  

• I lose $3 to tax.  
• If I’m over the $160 weekly income threshold, my jobseeker benefit will also be reduced by 70 cents in the dollar. I lose another $14 in benefit reduction.
• I may also have accommodation supplement.  If I cross the earning threshold I’ll lose 25 cents in the dollar. 
• If I’m a parent I’m probably getting Family Tax Credit.  I’ll lose 27 cents in the dollar if my household income is more than $33,000 per annum. 
• If I’m not getting a main benefit I may get In Work Tax Credit, and I’ll lose 27 cents in the dollar on that
• If I’m a sole parent I’ll be getting a subsidy on my childcare. That has income thresholds at $840 a week, $1,250 a week, $1,400 and $1,500 a week, each of which reduce the amount paid.

Matthew speaks truth to power here,

The Kapiti Coast District Council has listed a $500,000 loan to Air Chathams as a loan to a community organisation.

This looks like trying to disguise corporate welfare as a charitable endeavour.

Air Chathams is of course a for profit company.

Stuff reports:

A teacher yelled racist abuse at an outnumbered group of police officers dealing with an aggressive crowd of Mongrel Mob members. …

Police were attempting to calm the situation when Morrison arrived, driving her Suzuki Swift through the group of police and others.

Morrison got out of her car and began to enflame the situation, yelling racist abuse at several of the officers, who were at that stage trying to leave the area due to being outnumbered.

When Morrison was later arrested she admitted her poor behaviour and apologised for her racist slurs, but not for attacking the officers.

It goes without saying that she should not be allowed anywhere near kids and a classroom.

Judge Sygrove noted Morrison had three pages of previous convictions.

How did she get registered in the first place?

Ipsos have released their latest regular polling of major issues in New Zealand. The top five issues (people can nominate up to three) are:

1. Cost of Living 58%
2. Housing 33%
3. Healthcare 32%
4. Crime 31%
5. Economy 23%

Below are how people assessed which party was best on each issue, and how that has changed from a year ago.

• Cost of Living – National 40% (+12%), Labour 26% (-11%)
• Housing – National 36% (+13%), Labour 33% (-21%)
• Healthcare – National 30% (+10%), Labour 34% (-11%)
• Crime – National 36% (+9%), Labour 26% (-9%)
• Economy – National 44% (+8%), Labour 28% (-10%)

So National leads on four of the top five issues. The one that Labour has dropped the most on is housing.

Henry Cooke writes in The Guardian:

Stories are trotted out about New Zealand being “the least corrupt country in the world”. But that isn’t what the index actually measures. It uses a survey of academics and business types to measure perceptions of corruption – which is a reasonable indicator of corruption, but not an actual direct measure, and one open to accusations of bias towards rich countries.

At the start of this year, New Zealand’s then justice minister Kris Faafoi was one of those quoting the nation’s high standings in the index, issuing a press release that again confused a corruption perception index with an actual corruption index. Now just 10 months later – and only three months since leaving the cabinet table – Faafoi has left parliament and started his own lobbying firm.

This is an appalling situation. A politician who was intimately involved in the conversations that shape our country now has a job trying to influence the way those conversations go, and is armed with the knowledge that only someone involved in those conversations would have – from the individual positions of other ministers to highly sensitive information from public servants.

It is unprecedented and appalling.

The rules should not allow him to be reading cabinet papers in June and then lobbying his former colleagues on the same matters in October. Other countries – ones that aren’t naive as us – have so-called “revolving door” policies to stop this very thing, forcing elected officials to cool down for some period of months or years before engaging in lobbying.

One simple way to implement this would be for the PM to issue a Cabinet Office directive that no Minister or official will meet with a lobbyist who has been a Minister within the last three years. It doesn’t need a law change, just a simple decision.

Those who leave politics do have a right to build a new career, and use the skills politics gave them in that new vocation. But the public has every right to be appalled when the turnaround is this quick, and the service on offer is not just the skills and knowledge of a seasoned political operative, but also the connections retained from someone’s time acting as a servant of the public.

It is all about timing. Clayton Cosgrove only became a lobbyist nine years after he was a Cabinet Minister. Roger Sowry also didn’t become a lobbyist until nine years after he was a Cabinet Minister. Nine years is okay. Nine weeks is not.

Bryce Edwards writes:

Faafoi’s two-way trip through the revolving door is utterly brazen. There are no other examples in recent New Zealand political history – and probably no other examples in the OECD countries – of such a short period of time between running government policy to then trying to influence them on behalf of private business.

Even Donald Trump placed a five year ban on members of his Cabinet from becoming lobbyists afterwards.

The media need to ask the Prime Minister how comfortable she is with a cabinet minister quitting his job to immediately become a lobbyist who will be trying to persuade his former colleagues on behalf of vested interests.

Maybe even at her press conference today.

Part of democracy is your side loses sometimes, even often. It is how the system works. It is always a good idea to be a gracious victor and also a gracious loser.

The victories for the CR in the local elections has seen some very bad losers, starting right at the top.

The turnout in 2022 is looking to be near identical to 2019 when the left did very well. Did you hear the PM in 2019 declaring that there has to be an inquiry into the low turnout?

The very clear dogwhistle from the PM is that the left only lost because of low turnout, implying the results are somewhat illegitimate.

I have been advocating for over a decade two simple reforms to lift local election turnout – allowing people to return their ballot paper via the Internet (as overseas Kiwis do in general elections) and having the Electoral Commission in charge of local elections. Despite select committee recommendations, the Government has done nothing in the last five years to advance these. Only when they get walloped, do they seem interested.

Then you have journalist Donna Chisholm declaring that Aucklanders are racist as f*8K because they elected Wayne Brown over Efeso Collins.

Did Donna proclaim Aucklanders were all racist bigots in 2019 when they chose Phil Goff over John Tamihere?

Of course not. You are only racist when you vote against a left wing candidate.

The Daily Mail reports:

Sussex Police released a humiliating apology for defending the gender of a legally male paedophile online, after the Home Secretary said the force should be focusing on ‘catching criminals’ not ‘policing pronouns’.

Suella Braverman waded into the Twitter storm after the force said they ‘would not tolerate’ any hateful comments towards the gender identity of convicted paedophile Sally Ann Dixon, 58. 

Dixon, who was born John Stephen Dixon, was convicted of 30 counts of indecent assaulted which took place in the late 1980s and 1990s before she transitioned. …

Sussex Police tweeted that they: ‘do not tolerate any hateful comments towards their gender identity regardless of crimes committed. This is irrelevant to the crime that has been committed and investigated.’

Ms Braverman MP piled in saying: ‘Sussex Police have done well to put a dangerous criminal behind bars. But they’ve got it wrong by playing identity politics and denying biology. Focus on catching criminals not policing pronouns’

Several hours later the force issued an apology saying their previous tweet was ‘inconsistent’ with their usual style and emphasised the public are allowed to ‘express themselves freely within the boundaries of the law’.

It shouldn’t need the Home Secretary to get involved for a police force to stop threatening people for not using preferred pronouns.

And people wonder why some of us are nervous about bring in hate speech laws in NZ!

One can only enjoy this amicus curiae submission from The Onion in a Supreme Court case about parody. Their introduction is typical Onion:

The Onion is the world’s leading news publication, offering highly acclaimed, universally revered coverage of breaking national, international, and local news events. Rising from its humble beginnings as a print newspaper in 1756, The Onion now enjoys a daily readership of 4.3 trillion and has grown into the single most powerful and influential organization in human history.

In addition to maintaining a towering standard of excellence to which the rest of the industry aspires, The Onion supports more than 350,000 full- and parttime journalism jobs in its numerous news bureaus and manual labor camps stationed around the world, and members of its editorial board have served with
distinction in an advisory capacity for such nations as China, Syria, Somalia, and the former Soviet Union.

On top of its journalistic pursuits, The Onion also owns and operates the majority of the world’s transoceanic shipping lanes, stands on the nation’s leading edge on matters of deforestation and strip mining, and proudly conducts tests on millions of animals daily.

But they are intervening to make a serious point:

Third, the Sixth Circuit’s ruling imperils an ancient form of discourse. The court’s decision suggests that parodists are in the clear only if they pop the balloon in advance by warning their audience that their parody is not true. But some forms of comedy don’t work unless the comedian is able to tell the joke with
a straight face. Parody is the quintessential example.

Parodists intentionally inhabit the rhetorical form of their target in order to exaggerate or implode it—and by doing so demonstrate the target’s illogic or absurdity.

And in summary:

This Court has traditionally been hesitant to chill speech, and the prospect of chilling parody by imprisoning its practitioners provides equal cause for caution. “What may be difficult to communicate or
understand when factually reported may be poignant and powerful if offered in satire.” Rogers v. Grimaldi, 695 F. Supp. 112, 123 (S.D.N.Y. 1988), aff ’d 875 F.2d 994 (2d Cir. 1989). “ ‘[T]he last thing we need, the last thing the First Amendment will tolerate, is a law that lets public figures keep people from mocking them.’ ” Cardtoons, L.C. v. Major League Baseball Players Ass’n, 95 F.3d 959, 972–73 (10th Cir. 1996) (quoting White v. Samsung Elecs. Am., Inc., 989 F.2d 1512, 1519 (9th Cir. 1993) (Kozinski, J., dissenting)).

The Onion intends to continue its socially valuable role bringing the disinfectant of sunlight into the halls
of power. See Buckley v. Valeo, 424 U.S. 1, 67 (1976) (quoting Louis D. Brandeis, Other People’s Money and How the Bankers Use It 62 (National Home Library Foundation ed. 1933)). And it would vastly prefer that sunlight not to be measured out to its writers in 15- minute increments in an exercise yard.

I hope the Supreme Court agrees with them.

With the exception of Wellington, the major local body races were a disaster for the left today. Labour should be very worried so many of its supporters were wiped out. I’m not jut talking the big cities, but all over the place. Starting from the North.

Auckland

Wayne Brown won in a landslide over Efeso Collins with a 55,000 majority to date. A huge mandate for change. But it wasn’t just the Mayor.

In Albert-Eden-Puketāpapa C&R won (for now by 300 votes) the second seat off Julie Fairey, who is close to royalty on the left.

In Howick Maurice Williamson took out Paul Young who often voted left.

In Waitākere Ken Turner took out Linda Cooper who also often voted with Goff.

And in what will hurt most of all in Waitematā and Gulf, Mike Lee took out Pippa Coom. Now Lee is a long-term leftish but he is a fiscally responsible old school one and hated by the woke left who adored Coom.

This gives the CR a clear majority on the Council. Also a Mayor who will loudly stand up to the central Government on issues.

Rotorua

The retiring Mayor is a former Labour MP. The new Mayor is a former National candidate. Tania Tapsell got almost twice as many votes as the runner up.

Whanganui

A huge upset here. I wasn’t even aware incumbent Hamish McDouall (former Labour candidate) had a serious challenger. But he lost by 2,000 votes to Andrew Tripe after being re-elected unopposed in 2019. Tripe stood on an anti-three waters platform.

Lower Hutt

Labour’s Campbell Barry did get re-elected but by a narrow 1,300 majority, helped by hugely favourable coverage in the local media.

Wellington

Wellington is to New Zealand what San Francisco is to the United States. It went heaving Green, but significant that the Labour endorsed candidate came fourth.

Nelson

Nelson has had a very left leaning Council but former National MP Nick Smith won handily over the former Green candidate.

Christchurch

The moderate Phil Mauger replaces former Labour MP Lianne Dalziel and her preferred candidate of David Meates lost to Mauger.

Possibly more shocking is the ward results. Left leaning Mike Davidson lost out massively to Victoria Henstock. Likewise Pauline Cotter lost to Ali Jones. Both won easily in 2019 and their defeat means the left have lost control of Christchurch.

Dunedin

I had not followed Dunedin closely. I just assumed Green Party’s Aaron Hawkins would easily get back in as he had a massive majority in 2019 but he lost in a landslide to Jules Radich. When Dunedin goes right, you know you have a sea change.

There were many reasons why so many left candidates lost – three waters, anti-car transport priorities, rates affordability etc. If Labour is sensible they will listen to the voters and ditch their Three Waters legislation. But if they refuse to listen, well they may get the same shock next year.

The Daily Mail reports:

The owners of an Ohio bakery celebrated on Thursday their $36.5 million victory over the liberal arts institution Oberlin College in a defamation case, declaring that ‘David has overcome Goliath’.

The college had been ordered to pay after jurors ruled that it had defamed Gibson’s Bakery by describing the institution as racist, after the storeowner chased down three black students who stole from the business in November 2016.

How dare they chase students who steal from them.

The anger at Oberlin was whipped up by the former dean of students, Meredith Raimondo, who led the woke mob’s attacks against Gibson’s – and even turned up outside the business to screech accusations while toting a bullhorn.

That is what landed the college in court – their own dean of students led the charge.

Soon, the woke college — located in the small town of Oberlin southwest of Cleveland — ordered its campus food provider to stop buying cookies, bagels and other items from Gibson’s, hurting the bakery’s profits.

And even after the storeowners complained about the way they were being portrayed by college officials, they refused to retract their claims, protests continued, and the store was forced to lay off half its staff and cut opening hours. 

Truly vindictive.

I am driving in the South Island this afternoon so won’t be able to cover the local election results in detail but have embedded my Twitter feed below as I’ll try and cover interesting results in them there.

Most of the interest is in the three main cities.

In Auckland, the polls have Wayne Brown in the lead. However Efeso Collins has the entire Labour and Greens turnout machine behind him. Every City Vision candidate will have had a team trying to get supporters out to vote, and if they are successful that could propel Collins to a win.

Also of interest will be the results of ward elections in AEP, Howick, Manurewa-Papakura, North Shore and Waitemata which will determine the left keep a majority on Auckland Council.

In Wellington I expect Tory Whanau to gain the most first preference votes. The Greens get 30% party vote in Wellington Central and 24% in Rongotai. A lot of people don’t realise how young Wellington City is – 49% of adults are aged under 40. But winning first preferences is not the same as winning under STV. What will be crucial is where the preferences go from the candidate who comes third.

In terms of Council, there are a few retirements so the interest is who replaces them, as well as whether any incumbents get knocked out.

In Christchurch a Q+A poll had Phil Mauger way ahead of David Meates. Meates’ campaign team includes former Labour Mayor Garry Moore and Lianne Dalziel’s former campaign manager.

Other races of interest for me will be Rotorua and Queenstown with two young strong female candidates standing.

Let the counting start!

Samira Taghavi writes:

Few people in New Zealand can comprehend what it is like to live in a country where the police will arrest you for not “correctly” wearing a head scarf. Let alone beat and kill you for it.

Yet this is happening right now in Iran.

Intensely disturbing is that the bulk of our usual sources of political outrage in this country have nothing to say. The Jacinda Ardern Government’s silence, particularly, needs to change.

Think if the PM condemned this with the same passion she condemns misinformation at the UN!

Mahsa Amini, was picked up by Iran’s “morality police” because of her “poor hijab” which purportedly – and fatally – revealed too much fringe. Alas, no high government official will ever be held to account for her death. It doesn’t work that way in a country that takes its view of women from the 12th century. …

I am lucky to live in this country, but I grew up in Iran before leaving at the age of 22 – the same age as Amini.

Had I stayed, my parents would have probably long ago mourned my death.

I know the fear of being picked up by the religious police – I have had that actual experience – without knowing where I was being taken and whether I would leave their custody alive or dead.

For a long time after moving here, I felt my body shiver on seeing a nearing police car. It can be hard to get ever-present fear and frequent terror out of one’s system.

I don’t think we can ever appreciate how terrifying it must be for women in Iran. Ironically Iran has just been elected to the UN Women’s Rights Commission for a four year term.

The Western world is, it seems, often convulsed with angst about human rights, and routinely extends the long arm of disapproval even to people who are long dead. Statues are coming down, buildings and places are being renamed, all to express the strongest condemnation of outrages, including ones that happened centuries ago.

But it appears that outrage can be selective.

While Anglo-Saxon colonisers are condemned, that is often not so with Middle Eastern mullahs.

A good point.

In my view, this is symptomatic of a typically “woke” concentration on condemning the West but not the East; frequently giving my home country and the Islamic world generally, a pass from serious scrutiny.

Our Prime Minister recently felt motivated to effectively denounce justices of the United States Supreme Court, for observing (incontestably) that abortion is literally not included in the text of the US Bill of Rights and that it was a matter for elected representatives to vote on the issue.

Yep got far more worked up by a court ruling that abortion is an issue for legislatures to decide, then on what happened in Iran.

While our Government might be mute on Amini’s death and the Iranian government’s cruelty thereafter, other civilised countries have not on this occasion been so quiet.

Prime Minister Justin Trudeau announced that Canada will be placing sanctions on dozens of Iranian individuals and entities, including the country’s “morality police”. The United States has already placed sanctions on the morality police and Iranian security agencies. German Chancellor, Olaf Scholz, has also condemned the death of Amini and the Australian government supports calls for an investigation into her death.

Sanctions is a good idea.

The Supreme Court has quashed the convictions of Peter Ellis, bringing this 30 year saga to a close three years after he died. At lest his reputation has been restored to him.

I am so very pleased that finally the judicial system reached the obvious verdict that there was (at a minimum) reasonable doubt about his guilt, or more specifically whether any abuse ever occurred.

His original convictions were twice upheld in the Court of Appeal and his three appeals to the Governor-General were unsuccessful.

The Wikipedia article on him covers the case well, and especially how the Police initially found no abuse, but it was only after parents wound each other up, that social workers went it whose techniques were sub-standard.

It is worth noting that the finding of miscarriage of justice does not mean you can conclude there was no abuse (as some parents and their children still believe). It means the finding of guilt was unsafe. Having said that, I personally think on the balance of probabilities it did not occur. It seems implausible that the offences he was convicted of could have occurred in a small centre with no other staff member noticing.

The Herald reports:

A man who killed a woman after crashing into her car at 117km/h, and while under the influence of alcohol, had five previous drink driving convictions at the time of the fatal accident.

If he has six drink driving convictions them almost certainly he has driven drunk at least 600 times, as you only get stopped less than 1% of the time.

This was Nepia’s sixth drink driving offence and last week Nepia breached his bail by drinking, the court heard.

Who thinks he will stop drink driving?

Graham Adams writes at The Platform:

The accusation that “Māori had their language beaten out of them at school” has become common shorthand for the widespread belief that it was Pakeha who were almost entirely to blame for the dwindling fortunes of te reo over the past 180 or more years.

For that reason, many people are shocked or disbelieving when they are told that prominent Māori were among those pushing most energetically for English to be the only medium of instruction in Native Schools. These were set up in 1867 as a nationwide system of secular primary schools for Māori children, for which hapū provided the land while the government provided the buildings and teachers.

It is an equally inconvenient fact that it was Pakeha missionaries who, from the early 19th century, were determined to teach Māori children in te reo — often against the wishes of Māori themselves, who saw proficiency in English as the key to success in trade and politics and as a gateway to the outside world.

In 1871, the newly elected MP for Eastern Māori, Karaitiana Takamoana, pointed out in Parliament that missionaries had been teaching children “for many years, and the children are not educated. They have only taught them in the Māori language. The whole of the Māoris in this island request that the government should give instructions that the Māoris should be taught in English only.”

Nowhere in the legacy media do we learn these inconvenient facts. It is just easier to paint a childish picture of Pakeha Government bad.

Sir Apirana Ngata — who served as Minister of Native Affairs, was ranked third in Cabinet and whose image graces our $50 note — mounted a  campaign in the 1920s and 1930s to have English given priority in Māori primary schools. He argued that proficiency in the English language was “the key with which to open the door to the sciences, the mechanised world, and many other callings”.

Furthermore, it was an approach enthusiastically endorsed by Māori parents. In 1930, Ngata stated that the primary purpose of the Native Schools was to teach English. “Māori parents do not like their children being taught in Māori even in the Māori schools, as they argue that the children are sent there to learn English and the ways of the English.”

Again key information we never learn elsewhere.

Stuff reports:

Now, teachers’ unions are joining forces to call for streaming in schools to be abolished. …

Webber cited evidence which showed “how educationally harmful [streaming] is for male students”. …

Albany Senior High School English teacher Philippa Wintle has worked in education for 15 years, and said any system where male students were at the bottom was “by design, inherently sexist”. …

“Any system where students who predominantly boys are over-represented in negative statistics has got to be a system that by design favours non-male students.”“Any system where students who predominantly are boys are over-represented in negative statistics has got to be a system that by design favours non-male students.” …

“It is really damaging because you have the underlying unconscious bias with teacher perceptions so more boys end up in the bottom classes,” Prendergast said. …

“This contributes to inequitable outcomes, especially for male learners who are disproportionally placed in lower streams.”

The appalling education outcomes for boys at school can no longer be accepted, so it is right to stop streaming because so few boys make the top streams.

This post is by PaulL, a regular commentor and occasional contributor.   It is the first post in a series on the financial incentives to work and the impacts of our tax and transfer system on household formation. The index for the full series is here.

Adam Smith in 1776 famously said “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages.”  His point was that in a free market we don’t appeal to the good will of the baker to bake our bread.  They bake bread because they can sell it – they do it because it’s in their interest to do so.

Society benefits when people work.  Many of the things we want in life are produced by other people through their work.  Working also creates social cohesion and gives people a stake in society.  It often leads to a sense of purpose and improved mental health.  Parents working provide a role model to their children and to others in the community.

Having said that, I’m also well aware that It’s called work for a reason.  While we may enjoy our work, who amongst us would choose to spend our time (or as much time) at work if we didn’t get paid for it?  Perhaps we’d instead stay at home and play video games, or buy a Transit van and tour NZ enjoying our incredible country.

This post series on the financial incentives to work, and the impacts of our tax and transfer system on household formation is by PaulL, a regular commenter and occasional contributor to Kiwiblog.  This post is the index post for the overall series and will be updated with links to each post as they are released. Some posts are planned but not released yet.

Story arc 1: What do our tax and transfer incentives look like at the moment?

• Why do incentives to work matter? Why do we care whether people have an incentive to work?
• What is an effective marginal tax rate? How do you calculate an effective marginal tax rate, what’s included in it?
• Example 1: Sole parent, 2 kids. Illustration of the income and clawbacks facing a sole parent moving into work, or considering increasing their hours of work
• Example 2: Sole parent, 2 kids. Illustration of the income and clawbacks facing a sole parent increasing their hourly pay rate (i.e. returns to increased productivity)
• More examples: Other demographics. Illustration of the EMTRs facing single people with no children, couples with children with one person working, couples with children with neither working.
• EMTRs and household formation. What impact does the tax and transfer system have on incentives to form stable relationships?
• Summary of EMTR impacts. What do all the preceding posts tell us in general?

Story arc 2: What could we do about that?

• What sorts of policy are available to us? An attempt to categorise and describe the interventions we might choose to use
• Universal basic income: would this help and can we afford it?
• Universal child support: could we afford to make the child support portions of the benefit system universal? These are the cause of much of the EMTR problem.
• Tax free threshold: this may be politically advantageous, but does it help with incentives to work?
• Adjusting thresholds or marginal tax rates: can this let us improve incentives to work?
• Adjusting abatement rates: what would this cost and does it help?
• Lowering benefits: could this help fix abatement rates, and is it politically possible or a good idea?
• Non-financial incentives: what can we do to encourage work that doesn’t rely on financial changes?
• Recommendations: what would I do if I was in charge of things?

Related Posts:

• Number of people on a benefit over time
• Housing costs
• Productivity
• Employment from the community you’re serving
• EMTR on the recent minimum wage increase