welfare

Farrar finally recognises the intellectual paucity at the NZ Herald

Arts, fitness, and travel blogger David Farrar gives the anonymous editorial writer at the Herald a good kick in the balls after their stupid editorial had this to say:

It has long been an anomaly that benefits for the young are raised annually by the rate of inflation while superannuitants have their pensions pegged to increases in wages, or inflation if it is greater.

Wages in recent years have increased at a rate above low inflation, causing benefits to lag the general rise in living standards enjoyed by wage earners and the retired. The cost of indexing working age benefits to wages might be considerable but it seems only fair that it should be done. If fiscally possible, it should be accompanied by a catch-up adjustment to benefit rates over the next few years.

Farrar responds:

This may be the stupidest and most financially illiterate editorial of the year.   Read more »

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And another Farrar kicking for Robbo

Our Pinko arts, travel and fitness blogger mate continues to point out what everybody knew, Grant Robertson is not a finance minister’s arsehole.

Grant Robertson has exclaimed:

The National Government has big questions to answer about how a provider of services to thousands of vulnerable New Zealanders is set to fold, ’s Finance spokesperson Grant Robertson says.

Relationships Aotearoa which provides support and counselling to families, individuals and survivors of domestic violence is set to shut its doors, minus any last minute intervention.

“There are thousands of vulnerable people and families who rely on Relationships Aotearoa for critical services. The government cannot leave them in the lurch.

“Like other non-governmental organisations, Relationships Aotearoa has been seriously underfunded in recent years. It has been asked to do more with less and the strain has clearly started to tell.

This is typical Labour. If an NGO has financial issues, then the answer is the taxpayer must throw more money at them. In the same breath they expect us to believe they would ever have lowered the deficit.     Read more »

Nearly 20% of all children continue to be born into welfare dependency

Lindsay Mitchell blogs:

If there is one statistic that epitomises the state of modern family under decades of benefit influence it’s the following.

Each year I put the same question to MSD (adjusting dates obviously):

At December 31, 2014, how many benefit recipients aged 16-64 had a dependent child born in 2014?

This time the answer  is 11,149 – or 19.4% of all children born in 2014. Still nearly one in five.

While there is gradual and steady improvement (below are the percentages for the last 10 years) the pattern remains well entrenched (largely independent of the economy), a point I have made repeatedly over the years: Read more »

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We’d have a surplus if Key and Joyce didn’t keep splurging on corporate welfare

John Key has announced in a pre-budget speech $80 million more of corporate welfare.

The Taxpayers’ Union is predictably upset.

The Taxpayers’ Union is shocked that the Government is wasting the last $80 million of the ‘Future Investment Fund’ on corporate welfare through Callaghan Innovation’s ‘R&D grants’.

“This is corporate welfare under the guise of ‘innovation’,” says Taxpayers’ UnionExecutive Director, Jordan Williams. “The fund was meant for health, education and infrastructure, not hand outs to private business.”

“Callaghan Innovation gives money to private businesses that pocket the returns. As Sam Morgan has previously pointed out, the main “R&D” component of the grants is the creation of a whole industry who write proposals so companies can cash in.”  Read more »

Who feeds them in the holidays?

Paula Bennett is dead right, and of course the usual harpies of the left are moaning that she is benny bashing.

But is she?

Minister of Local Government Paula Bennett says she expects parents to send their children to school with lunch.

National, ACT and United Future parties have voted down the Feed the Kids bill by 61-59 which sought to feed 20 per cent of New Zealand’s lowest decile school children.

“It absolutely is the right thing to do. We provide breakfast into any school that wants it and this is being taken up which is great, but we believe in parental responsibility and I stand by the decision we made,” Bennett says.

Meanwhile Labour Justice Spokesperson Jacinda Ardern says of course it’s the role of parents to feed their kids but some parents cannot afford to feed their families.    Read more »

UK Cutting Benefits to Bludgers who won’t work

Welfare is a safety net, not a lifestyle choice. Ninety years of welfare has created intergenerational welfare dependency, and instead of accepting this, the Pommy Tory Party have been aggressively chasing people off welfare. They started by limiting the benefits any family can receive to twenty six thousand quid, which drove people to work. Previous some families were receiving double this, maying work very unattractive.

Now Iain Duncan Smith has started nailing bludgers who aren’t looking for work.

More than 466,000 people have their benefits suspended including 2,000 who are barred from claiming for three years

Nearly half a million people have had their benefits suspended over the past year after they failed to do enough to find work, turned down job offers or missed Jobcentre appointments, according to new figures.

A total of 466,000 people were hit by sanctions which saw them barred from claiming Job Seekers Allowance for an average of between four weeks and three months.

However, 2,000 repeat offenders were hit by significantly harder sanctions and had their benefits stopped for the next three years, including 49 single parents and 978 people under the age of 24.

Iain Duncan Smith, the work and pensions secretary, hailed the figures as evidence that the sanctions system is deterring people from offending after the proportion of people sanctioned fell by 18 per cent.

He said that “there should be consequences” when people “don’t play by the rules”: “The vast majority of people on benefits want to work – and take up all the support on offer to move into a job. We can see this from the record numbers of people in work and falling unemployment.   Read more »

Something for the Nats to consider: a benefit ceiling

Who would have guessed?   You pay people less free money, and some are finally motivated to go get a job.

The new cap on benefits payments for the unemployed has forced thousands of people to find work instead of living off the state, new research will reveal this week.

Four detailed studies from the Department for Work and Pensions (DWP) will deliver the most comprehensive evidence so far that the benefits cap is encouraging people to move off welfare and into jobs.

The households that have lost the most in benefits payments since the cap was introduced in April 2013 are the most likely to have begun working for a living, the research concludes.

Claimants who saw their benefits cut by £200 a week or more were three times as likely to have found work after a year as households whose benefits were not affected, the findings suggest.

Iain Duncan Smith, the Work and Pensions Secretary, said the evidence showed the Conservatives were right to plan to cut the benefits cap further.

I think there is a kind of symmetry to increasing the minimum wage at the same time as decreasing (or capping) the unemployment benefit, don’t you?   It just seems… fair.

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Guest Post – Douglas wrong about National

A guest post from Lindsay Mitchell.


Making some otherwise sound recommendations to his old party, Labour, Sir Roger Douglas made this statement:

 “National’s do-nothing, status-quo approach to economic and social policy provides Labour with a real opportunity to get back up on its feet.”

In the last six years National has done more to address working-age welfare dependence than Labour did in the prior nine.

A Labour supporter would reject my claim on the basis that numbers on the unemployment benefit took a nosedive over their incumbency. That’s true. Work and Income put enormous effort into those on an unemployment benefit, and Labour luckily oversaw an economic boom (giving them full credit for which is as questionable as blaming National for the GFC.)

But chronic welfare dependence, a crippling social and economic issue for New Zealand, lies in the other main benefits:  pre-reform they were the DPB  and Sickness/Invalid benefits combined.

In 2009, National set up the Welfare Working Group, and from there, commissioned the Taylor Fry actuarial work which exposed where long-term reliance is concentrated. The revelation that teen parents and other young beneficiaries entering the system at 16 or 17 would stay there the longest was no surprise.

Through the early 2000s, while only 2-3 percent of the DPB total at any given time was teenagers, between a third and a half of all recipients had begun on welfare aged under twenty. Throughout Labour’s administration I argued that average stays on welfare were much longer than government issued figures. Point-in-time data produces much longer averages than data collected over a period of time, but it suited Labour politically to use the latter data to minimise average stays and downplay dependence.

To understand this statistical phenomena imagine a hospital ward with 10 beds. Nine are occupied year around by chronically ill patients; one is occupied on a weekly basis. At any point-in-time 9 patients have an average stay of 12 months and one, an average stay of one week. But calculated over the year, 85 percent of total patients had an average stay of just 1 week. Equate this to spells on welfare and you can see how long-term dependence can be disguised.

Here is the huge difference between National and Labour.

National looked for what Labour had denied.   Read more »

Taxpayers’ Union slams Joyce for his expanded corporate welfare programme

Since the opposition is asleep at the wheel the job of holding a spendthrift government to account falls upon the shoulders of the Taxpayers’ Union.

They are holding Steven Joyce to account for his expanded corporate welfare programme.

Responding to Economic Development Minister Steven Joyce’s defence of corporate welfare, Jim Rose, the author of Monopoly Money, a Taxpayers Union report on corporate welfare since 2008, says:

“Mr Joyce defends over $3 billion in subsidies to KiwiRail and Solid Energy under his watch by saying that they are state owned. Bailouts are not the role of ministers as shareholders. Since 1986, state-owned enterprises have had a statutory duty to operate as a successful business and to be as profitable and efficient as comparable businesses not owned by the Crown. The whole idea of the State Owned Enterprises Act 1986 was to bring an end to bailouts and permanent deficits.”

“Instead of putting a failed business in the hands of receivers, Mr Joyce defends throwing good money after bad by blaming the previous government for buying KiwiRail. That was three elections ago. Elections are supposed to count for something. $3 billion in taxpayers’ money cannot be handed out in subsidies with ministers bobbing and weaving about responsibility for the amount and wisdom involved. The Treasury Benches come with a full ministerial responsibility for every single dollar of taxpayers’ money spent under your watch.”    Read more »

Cat fight: Pagani vs St John

Josie Pagani and Susan St John are having a donnybrook over the direction of the Labour party and poverty.

One is an activist and member of the party the other is a lofty academic more attune with lecturing people.

My money is on the activist.

Susan St John accuses me of “visionless pro-work rhetoric” for writing in my blog about Labour’s position on extending the Working For Families tax credit to families not in work.

I’m not sure if Susan St John thinks it would be more visionary to be ‘anti-work’. I’m proud to support the core Labour value of work. The best way out of poverty is a well-paid job. The Labour movement is founded on the entitlement of working people to dignity through work and security when we can’t.

Those of us who have been in and around families needing benefits to live on have experienced the cycle of getting work, getting off the benefit and then getting back into it again. Work is the central security in our lives.

There will always be many who can’t work (or, often, could work but should not have to, such as many mothers of young children and many sick and disabled individuals among others.) Being ‘pro-work’ does not mean giving up on them or failing to represent them.

But my point was that you win the argument about doing more to help families on benefits if you can win the trust of those who are only two pay checks away from being on a benefit themselves.

Susan St John’s position implies the only way to help beneficiaries is by extending the in-work tax credit to beneficiaries. Yet we know that policy is unpopular.

So why don’t we get support to reduce child poverty and inequality? She implies the in-work tax credit for beneficiaries is unpopular because of the way it is framed. Others often say it is because voters don’t care about child poverty and inequality. I disagree.

Most New Zealanders really do care about child poverty. They understand the significance of increasing cash payments to beneficiaries. They’re not sceptical about the goal – they are sceptical about the in-work tax credit being the right tool to use.

It is revealing that, in an extensive quote from my previous column she left out this one:

Only when we do that job properly (representing working people) do we win the trust of people to increase benefit levels; because another Labour principle is compassion.”

Yet that is the main point I was making: we lost trust. We have to ask why.

Read more »