Unemployment benefits

Septic Tank busted telling pork pies

The other day I lambasted Carmel Sepuloni, aka the “Septic Tank”, for her claims that reducing the number of people on benefits was bad.

She thought it was bad because she claimed there was no evidence about where they had “gone”.

Well, Lindsay Mitchell managed to find out…so why couldn’t Carmel?

Here’s the most recent publicly available?data under National:

Cancellations of Jobseeker Support Dec 2015 by reason Read more »

Grant Robertson is trying to solve a problem that doesn’t exist

Grant Robertson announced that he is working on his Future of Work Commission, but that we have to wait until November to hear what it is. But he has mentioned “flexicurity”…a bumper sticker slogan.

Lindsay Mitchell decodes what he means and why he isn’t actually solving a problem that exists.

Grant Robertson is talking up the Danish ‘Flexicurity’ model intimating Labour policy in 2017 might look like something similar:

The Danish system has three parts. It has flexible rules for hiring and firing workers, to make it easier to cut staff in downturns and easier to hire new staff when an economy rebounds. It has a generous unemployment benefit of up to 90 per cent for low-paid workers. And it has an “active labour market” policy, which means unemployed are helped into work, given guidance or re-trained.
Mr Robertson said New Zealand already had a flexible labour market, but it needed to be balanced with greater security and income support.
“Obviously you can’t take a model and replicate it from one country to another. It’s the principles of it that we are looking at and how something similar could be put in place in New Zealand.”

The following graph is apparently based on data extracted from the OECD database. I am assuming it is accurate:

Worker protection 2013 Read more »

Guest Post: MSD ups efforts to detect sole parent benefit abuse

Lindsay Mitchell has been doing some digging ?and come up with some interesting information regarding benefits and who should and shouldn’t be on them.

She has?given me permission to repost her information in the interests of giving her a wider audience.

I have found the following information enlightening…especially as it appear to show that over 10% are abusing their benefit.


We all know that there are plenty of people pulling a single parent benefit who have partners. Anecdotal evidence aside, there are two data sources pointing to this.

One is the Growing up in NZ study, which I wrote about here but it gets quite complicated.

The second is simpler. It’s revealed in a passage from Child Poverty in New Zealand, by Simon Chapple and Jonathon Boston:

“Work undertaken at the Department of Labour and based on matching Household Labour Force Survey (HLFS) and administrative welfare records indicated, firstly, that in 2011 about 10 per cent of people whose welfare records showed that they were receiving an unemployment benefit reported to the HLFS that they were actually in full-time employment (i.e., working at least thirty hours a week), and hence were ineligible for the benefit; secondly, that more than one-third of people on an unemployment benefit self-reported as not actively seeking work ? and one in five expressed no intention to seek work in the coming year; and, thirdly, that about 10 per cent of people whose welfare records showed that they were receiving a DPB reported being partnered or living as married.”

(After an MBIE refusal to release the paper to me, the matter currently sits with the Ombudsman).

Back in October I blogged about a trial mentioned in the MSD Annual Report.

Read more »

Lindsay Mitchell – The Greatest Risk

Lindsay Mitchell has written a fantastic piece and has asked me to publish it so it gains a wider audience. I am very happy to do so.

As Rodney Hide said in?the?comments, this should be pinned to every wall in Treasury.

Growing up in 1960s New Zealand, houses were smaller and families bigger. Paradoxically, overcrowding and child poverty weren’t a major issue. Most families had two parents and many could even afford a stay-at-home mum. A very small percentage of families experienced financial hardship associated with an absent father.

What changed?

In 1973, influenced by the Royal Commission on Social Policy’s urgings, the government introduced a statutory benefit for sole parents regardless of the reason for their single parenthood. In the following 20 years unmarried births with no resident father more than quadrupled from around 2,500 to 12,000 – 22% of all births – annually. The relatively generous DPB saw single mums dropping out of the workforce. (The Royal New Zealand Plunket Society partially attributes this development to the eventual non-viability of Karitane hospitals which had provided live-in employment for unmarried mothers.)

These births accumulated in the statistics. By the early 1990s around a quarter of a million (mostly) mothers and children were dependent on the state for their survival. But the benefit still kept them above the poverty threshold.

When the incoming National government of 1990 opened Treasury books, the news was bad. This is where the authors ofChild Poverty in New Zealand?pick their story up. They describe “benefit cuts of between 10 percent and 30 percent for many beneficiaries supporting children.” In fact, for a lone parent with one child, the cut was 10.7%;?for those with two, 8.9 percent. The universal family benefit was abolished, but half of the savings were reallocated into increasing Family Support for beneficiaries and low-income families.

Nevertheless, the drop in income was enough to push beneficiary households below the poverty threshold (though they had probably been barely over it prior). Compounding this was the high number of partnered jobless parents created by an unemployment rate exceeding 11 percent in 1992. From that time the proportion of children in poverty, measured at below 60 percent of median disposable household income after housing costs, has been flat to falling slightly.

Sixty nine percent of children in sole parent households are poor compared to 15 percent in two parent families. Today, a lone parent heads around 30 percent of all families with dependent children.?Long-term?dependent sole parent families aren’t typically the result of a marriage breakdown. They hail from very young mothers with no educational qualifications, work skills or regular partner.

Every year around one in five new-born babies will be reliant on their caregivers benefit by Christmas. This pattern has persisted from at least 1993. For Maori the number jumps to over one in three. ? Add to this Treasury’s advice to the Ministerial Committee on Child Poverty,

“…around 1 in 5 children will spend more than half of their first 14 years in household supported by main benefit. This group is at the highest risk of material hardship and poor outcomes across a range of dimensions?.

The worrying aspect of this pattern is its persistence through good?economic times. In 2007, when New Zealand had record low unemployment, the percentage bottomed at around 19%. Over three quarters will rely on a sole parent benefit, the remainder on either an unemployment or disability benefit. While some of the reliance will be due to unforeseen circumstances like are job redundancy, most could have been predicted by the parent.
In a recent?Listener?column Jonathan Boston wrote?”…it is worth pausing and considering how easy we would find it to raise children under such circumstances.”?The same?counsel should be put to those people who can actually change the pattern. Though too much emphasis on “personal responsibility” would give less weight to “fairness and compassion” according to the book. Why these societal attributes would be mutually exclusive is unclear. Read more »

Guest post: Are thousands of people being denied benefits?

by Lindsay Mitchell

The Daily Blog recently ran the graph below along with the headline, “Billions of dollars stolen from the unemployed”. Mike Treen wrote,

The combined efforts of both National and Labour governments? punitive policies towards the unemployed seems to have removed over 100,000 people from rightful access to an unemployment benefit.

Source/ The Daily Blog

Source/ The Daily Blog

In today’s Herald Brian Gaynor has been exploring statistics, their variability and utility. He produced the following graph which tracks the quarterly difference between those officially unemployed (using the same Household Labour Force Survey data Treen used) and the new Jobseeker Benefit (projected back to 2008 by MSD):? Read more »

29,000 less bludgers taking from taxpayer

Paula Bennett has confirmed that there are less bludgers taking from the taxpayer…29,000 less bludgers.

Social Development Minister Paula Bennett said there were now 29,000 fewer New Zealanders receiving benefits since the last quarter, the lowest number of beneficiaries at this time of year since 2009.

She said more than 17,600 people went off the unemployment, domestic purposes and sickness benefits and into work in the last quarter.

There are now 310,146 people on benefits, including 92,550 sole parents on DPB, 58,208 on sickness benefits and 48,756 on unemployment benefits.? Read more »

Auctioning the unemployed on Trade Me

Rodney Hide reprises his article of last week about auctioning the unemployed on Trade Me:

Last week?s column to auction the unemployed on Trade Me generated great discussion across the internet. Some thought it a good idea, many opposed it, there were many good suggestions and there were some sharp criticism.

Let?s consider the major criticisms.

The first was one of the scheme?s political practicality. ?Which government or political party in power would have the balls to introduce the scheme?? The key aspect is how accepted the reform is at the next election and how much pain is endured getting there.

There?s no doubt the opposition parties would have a field day on the Warstler scheme?s introduction. There would be the usual allegations of ?slave labour? and the sale of body parts, but then what?

By and large his suggestion passed un-noticed as the media focussed on important things like John Key’s mother’s best friend’s kid, studiously ignoring this and David Shearer’s dodgy offshore bank account.

The 50,000 get work and get paid. How do you campaign against that? Within two years we would struggle to recall that we ever did things differently.

The second identified problem was the impact on the already employed. Certainly, there would be a short-run effect in shifting 50,000 people into work. How much I do not know. But I suspect it would be hardly noticeable.

I can?t imagine a mass layoff of workers on the minimum wage so that employers can bid each week for someone on the dole. Employers prefer the staff they have to people they don?t know and the 50,000 will undoubtedly be mostly employed doing jobs that now aren?t being done.

Besides, a significant black market already exists in jobs being done by people claiming the dole. That would cease.

Not a single person has shown how it couldn’t work. Mostly those opposed just hurl personal abuse as is often the way with the left.

There were a number of comments with the following general theme: ?Less focus on dole bashing and more on upskilling, you right-wing tool.?

But for the unemployed, especially the young and unemployed, there is no greater upskilling than being in the paid workforce, being productive, and learning to do a good job.

For most, it?s less about upskilling and more about getting into work and learning to work.

Jchaa336 declared, ?there is no way in hell, ever, that I am going to work 40 hours for 40 extra bucks. Come on!? I don?t think Jchaa336 understands the scheme. If the unemployed refuse too many jobs their dole is cut. That?s the point.

The unemployment benefit is not without obligations and the real issue is not Jchaa336 refusing to work but taxpayers refusing to support him or her to do nothing.

One commenter opposed the scheme ?because it might work. Creating a functioning market for peasants is not a good idea?.

I don?t think the unemployed are peasants. And the entire point is to create a functioning market for the unemployed. It?s the lack of a ?functioning market? that has people unemployed and shut of contributing to society.

Sadly there is an element in society who think that it is the government’s?responsibility?to up-skill the indolent. Name me one thing the government does efficiently. If the government is the answer it must have been a bloody stupid question.

One persistent and understandable concern is the potential for fraud. I could employ my sister, for example, and she could employ me. We could agree that we each do nothing. Or employers could pay workers under the table and thereby keep the full government subsidy.

Of course, there is considerable fraud now. And many on the unemployment benefit are already doing jobs under the table. The question is whether the Warstler scheme would increase the fraud or decrease it.

It would seem to me that the scheme would dramatically reduce fraud.

First, the numbers of unemployed not working would diminish to close to zero. Second, the transactions would be transparent and public on the internet. Third, bad and dodgy employers would be exposed on the internet.

The Warstler scheme has survived its first test: there?s been no knock-down criticism from the commentators.

Exactly…not a peep of any well thought out (peer-reviewed even) opposition to Rodney’s idea.