Friday, October 20, 2017

Benefit numbers at change of government

For your ongoing reference, here are beneficiary numbers, released today, at change of government. The slow but consistent reduction continued:

This illustrates just one of many positive social and economic factors for National, ignored by voters and Winston Peters (who insists on talking up a looming crisis for which he cannot be held culpable.)

Sunday, October 08, 2017

Another one bites the dust

What a blow. Rodney Hide announces his last column for the Herald on Sunday. I suppose it'll save a few minutes of my day not having to open the Herald page of a Sunday morning but that's the only upside I can think of and it's not a very good one.

There are countless opinion writers, as mentioned yesterday. There are three I take note of. Karl du Fresne, Martin van Beynen and Colin James. Occasionally I will glance at other writers columns, if the headline interests. But rarely do I reach the end. Mostly because it's recycled pap. The same ideas get expressed repeatedly with little thought about the manner of expression even. Originality is a rare commodity. In part that is why I blog infrequently now. I have said all I have to say and don't want to bore the readers or myself.

But Hide always had a new twist on something. Sometimes the twists seemed implausible but they never failed to either entertain or turn over the grey matter.

Perhaps he could be persuaded to start a blog? Creative thinkers need an outlet. And Lord knows, the rest of us need to hear their thoughts.

Saturday, October 07, 2017

Karl du Fresne on Winston Peters

In the on-line media age, where both 'writers' and readers are seemingly insatiably thirsty for content, opinion pieces have become all about quantity - not quality.

But this one is a cracker:

OPINION: As is well known, the MMP electoral system was created to ensure, as far as possible, that no party ended up wielding absolute power.

So far you'd have to say it has worked exactly as intended. In the eight elections since New Zealand adopted MMP, no one party has won an absolute majority. They have all had to compromise and negotiate with smaller coalition partners.

Now we find ourselves in the same position again. It should be familiar by now, yet something seems not quite right. What could it be?

Oh, that's right – Winston Peters, the 7.5 Per cent Man, is back in the mix, and making the most of his intoxicating moment in the spotlight.

He said he was out of phone range when Bill English called last Sunday. But what sort of politician goes bush, leaving his phone unattended, when he's in the hot seat and the country is waiting for a government to be formed?

Then there was his excuse that he was waiting for the 384,000 special votes to come in, as if these had the potential to skew the election night result by such an order of magnitude that any preliminary negotiations with other parties would be futile.

Peters wanted us to think he was delaying showing his hand out of respect for democracy, but I don't think anyone was fooled. We've seen it all before.

If he truly respected democracy, he would acknowledge that his party pulled a measly 7.5 per cent of the vote and stop behaving like some sort of vainglorious potentate from Berzerkistan. Heck, he couldn't even retain his own seat.

But this is Peters we're talking about. The "h" word that comes between "humidify" and "hummingbird" in most dictionaries apparently doesn't exist in the edition on Peters' bookshelf.

Perhaps MMP works best when you have politicians who are prepared to be conciliatory, to compromise and to make concessions. The Germans seem to manage it.

Unfortunately, Peters is not one of those politicians. Bluster and demagoguery, rather than consensus, is his default setting.

Politically, he's a living fossil: a relic of Muldoonism, with all its bullying, divisiveness and ad hoc state interventionism. From the time he first entered Parliament in 1978, his career has been marked by fractiousness and petulance. He is a settler of scores and a bearer of grudges.

Some of his policy ideas – reinstating the old Forest Service, introducing a police "flying squad", legislating to ensure free-to-air coverage of major sporting events – appear designed to exploit the nostalgic yearning of his ageing supporters for New Zealand the way they remember it.

Peters is a political Doctor Who, inviting us to join him in the Tardis for a trip back to a simpler time when an all-powerful state pretended it could solve complex problems with the pull of a lever. Look where that got us.

I said at the start of this column that MMP is working exactly as intended. Does this mean it's a good system? Not at all. It's a dog that replaced a turkey.

We weren't sure at the time that we wanted a dog. All we knew is that we desperately wanted to get rid of the turkey, and a highly motivated lobbying campaign convinced us – by a less than overwhelming majority, incidentally – that the dog would do the job better.

And so we ended up with a system in which a vain and egotistical politician whose party got 7.5 per cent of the vote determines who the next government will be; and where every solemn pledge made during the election campaign is now up for negotiation in a secret process that voters have no control over or input into.

We could, however, do a few things to improve the situation. For one thing, the media could stop stoking Peters' already rampant ego by refusing to give him daily opportunities to grandstand. And let's stop treating the post-election guessing game as some sort of diverting spectator sport or reality TV show. We're talking about the future of the country, for heaven's sake.

Oh, and here's another suggestion that might negate the Peters problem altogether.

You'd think that if any party "got" MMP, it would be the Greens. But at the very suggestion of a deal with National, they clutch at their skirts like startled virgins.

Well, Labour has never invited them into bed. If promiscuity is the price for getting some runs on the board, perhaps they should forget about virtue and get their knickers off.

 - The Dominion Post

Friday, September 29, 2017

Dreaded de javu

And so it came to pass. The self-serving, bad-mannered, boorish, duplicitous, Winston Peters has once more fooled some of the people, thereby visiting an unwanted prospect on all of the people.

Stephen Franks has a piece by his colleague, Rob Olgilvie, well worth a read:

Why just king-maker? Why not king?

Friday, September 22, 2017

Never a truer word...

Decades of state welfare and political paternalism have [since] conditioned some people to believe they cannot take care of themselves without government support. So they jeopardise their own freedom by giving government increasing authority over their lives while reducing the freedom of others too.


Only one party isn't promising to increase their authority over your lives this election. They are the only party promising to spend less, not more.

I will party vote ACT tomorrow. And despair over the vast majority who want to increasingly cede control of their lives. But I have long since stopped trying to understand why.

Sunday, September 17, 2017

Jacinda Ardern will increase poverty because she doesn't understand the drivers

Last year I wrote a paper which explored the link between child poverty and family structure. The strongest correlate with child poverty is single parent families on welfare. Additionally, children born into de facto relationships - which had a much higher likelihood of dissolving than marriages - were much more likely to become poor.

In a Sunday Star Times column Jacinda Ardern attacked my research:

This week I opened the paper to find some astonishing "news" - a lack of marriage is to blame for child poverty.

I've spent the better part of six years reading and researching the issue of child poverty, and what we need to do to resolve this complex problem in New Zealand

And yet here it was, the silver bullet we have all been looking for. Marriage. Getting hitched. Tying the knot. It turns out that we didn't need an Expert Advisory Group on child poverty, or any OECD analysis for that matter - apparently all we really need is a pastor and a party.

At least, that's the world according to Family First, who commissioned a report this week which, they claim, provides "overwhelming and incontrovertible" evidence that when it comes to child poverty, a lack of marriage is our problem, and it's simply become "politically unfashionable" to talk about it.

I'm happy to talk about it; in fact all of Parliament is. We debated the ins and outs of the institution not that long ago - it was called the Marriage Equality debate. Oddly, I don't recall Family First supporting the idea of increasing access to marriage when it came to same-sex couples. But I digress.

The major piece of evidence Family First use to back up their claims? Child poverty has risen significantly since the 1960s, and more people were married back then. I am paraphrasing, but that's the general gist. And yes, those two pieces of information are true. But are they linked? You only have to look at where child poverty figures really jump around to figure that bit out. Back in the mid-1980s, child poverty numbers (after taking into account housing costs) were about half the levels they are now. What happened to cause the spike? De facto relationships and single parenting didn't all of a sudden become "on trend".

What happened was Ruth Richardson's Mother of all Budgets. Government support was slashed, unemployment rates were grim, and child poverty, as you would expect, went up significantly. Equally, you can also see a downward trend in child poverty numbers around the early 2000s when Working for Families was introduced.

So what about the other claims in the report? How about "51 per cent of children in poverty live in single-parent families". Stating the obvious, surely. Single parent equals single income.

So, Family First, here's my view for what it's worth. Families will take many forms. Some children will be raised by one parent, some will be raised by two, possibly with some distance in between, and some will be raised by four. But the other factors Family First was so quick to dismiss - low wages and staggering housing costs - mean we have 305,000 children in poverty. And this is the stuff that needs to change. It's time we faced reality.

I was allowed only 150 words to respond via a letter-to-the-editor, but you can read my full response here.

Because she doesn't understand child - no let's call it 'family' poverty, Ardern is on the brink of making it much worse.

Granted that particular paper was about incomes. But they account for only one aspect of the poverty problem.

When countries redistribute wealth to raise incomes it comes at a cost - joblessness. Peter Whiteford and Willem Adema write:

"...there is an unavoidable trade-off between providing generous assistance to the poor and improving incentives for people to work and provide for themselves. On average across OECD countries, there is a fairly strong correlation between the effectiveness of tax and benefit systems in reducing poverty and the level of family joblessness. The correlation coefficient is 0.63 – implying that every 1 percentage point increase in the level of poverty reduction achieved by the welfare state is associated with an increase in the number of jobless families by 0.63 percentage points. Among the English-speaking countries  the correlation is even stronger (about 0.92), so that Australia and the United Kingdom reduce child poverty very significantly and have very high levels of joblessness among families; while Canada and the United States reduce poverty much less, but have much lower levels of joblessness (although they have much higher poverty among working families with children). That is, in the English-speaking countries the argument made by Adam, Brewer and Shepherd (2006) appears to apply – more generous support to poor families is associated with higher levels of family joblessness."


In a nutshell, for every percentage point family poverty is reduced, joblessness increases.

The possible future Prime Minister will substantially lift benefit incomes for young parents but reduce the incentive to work. Adding $3,120 annually per child aged 2 or under (and that's only one part of her policy) reduces, if not closes, the gap between incomes from work and incomes from benefits. And don't doubt that recipients factor this into a choice between working and staying dependent on the taxpayer.

"I get a good amount of money on the benefit, why bother working?"

Because work has many more benefits than money alone. Most importantly it teaches your children how the real world operates.

The last two decades has seen countries across the western world debating which is the best strategy to get families out of poverty - increasing work participation or redistributing income. National went largely with the former with their welfare reforms. Now there are fewer children benefit-dependent than since the 1980s (though there's a long way to go yet). Ardern though is predominantly choosing the latter. And if she needs the Greens, a softening of the reforms will be inevitable.

While claiming to have researched  child poverty extensively she has ignored the effect that redistribution has on both work participation and relationship status.

NZ Herald's Simon Collins summarized some of the research into the effect of welfare on relationships:

For parents on benefits or low incomes, the tax and benefit system actually created a financial incentive to separate. Economist Patrick Nolan calculated in 2008 that a mother earning $240 a week and an unemployed father would be $132 a week better off apart, even allowing for the extra costs of two households, because of the extra welfare top-ups the mother could get if she lived alone with the children.
Social researchers Paul Callister and David Rea, in a new draft paper, trace the other side of the equation - a worrying minority of mid-life men aged 30 to 44 missing out on both work and marriage. Mid-life men outside the labour force rose from 2 per cent to 11 per cent in the 30 years to 2006, and those living without partners rose in the past 20 years from 19 per cent to 33 per cent. 
Ardern is intent on reducing income poverty (with no guarantee the money will be spent on the children) but will unwittingly or worse, uncaringly, increase another kind of poverty. A poverty of purpose and spirit. These deficits are what drives the problems all New Zealanders want to see alleviated.

Monday, September 11, 2017

Farmers fight back

Great to see:

Maniototo farmers challenge Ardern to visit them on water tax

A group of Central Otago farmers are challenging Jacinda Ardern to visit their farms to discuss Labour's water tax plans.
The group of women, known as Water Maniototo, say they cannot afford a royalty on irrigated water, planned at one to two cents per thousand litres of water, and it could drive some off their land.


Saturday, September 09, 2017

Crucial good news stories ignored by 'change' voters

The number of teenage mothers granted a benefit has plummeted:


The percentage of children dependent on a benefit is falling and is lower than it has been for decades: