This is a re-post of an article originally published on pundit.co.nz. It is here with permission.
Following the Richardson/Shipley 1990 ‘redesign of the welfare state’ – which eliminated the universal Family Benefit and doubled the rate of child poverty – various income supplements for families have been added, the best known being ‘Working for Families’, introduced in 2005. The result of the various ad hoc incremental adjustments with confused objectives is a difficult-to-understand and poorly targeted system of family assistance.
As you might expect from such a Heath-Robinson arrangement, the outcome is inefficient in that it is both an expensive means of reducing family poverty and not very effective at reducing the worst child poverty. The clumsiness is well recognised but every attempt to get a better system of supporting children has failed because the approach has been incremental rather than a fundamental redesign – more strings to the rackety structure.
A simpler delivery of the same income support would markedly reduce child poverty without costing the state anything more – so inefficient are the current arrangements. Let’s call it a ‘Universal Family Benefit’ ((UFB). If differs from the one introduced in 1946, by its contribution reducing as the family earns other income. The bleed-out rate on this extra income is 39 percent (the top income tax rate).
To evaluate the proposal, I’ve used the Treasury's microsimulation model of the New Zealand personal tax and transfer system TAWA (Tax and Welfare Analysis), which they use for assessing tax and benefit changes. (The Treasury is not responsible for these results, but thank you for their help.)
The system would work by families choosing to go onto a different tax code – let’s call it the Family Tax Code (FTC) – which involved their paying 39 percent on all their market income. Additionally, the family would receive for each child an untaxed benefit of $255 per week. (the precise calculations apply for the 2021/2 year). They would not get all the other family tax credits and benefits would be stripped out (except for the adult part of the benefit which goes to solo parents). (Some high-income families would be worse off if they went onto the FTC; they would choose to remain on the existing tax code instead.)
The level of the child benefit was chosen so that the package had net zero fiscal cost (overall cost to the government). Yet despite the fiscal balance, the proposed package would result in 64,000 fewer children being below the poverty line (using the ‘moving-line BHC50’ measure; the broad conclusion of a marked reduction in child poverty will apply for any sensible poverty line). TAWA thinks there are about 115,000 children below that poverty line, so the UFB package would reduce the numbers in poverty by over a half – the ambition of the Child Poverty Reduction Act – without any extra government spending. One might argue that the current system of income support for children is less than 50% efficient.
There are modifications which would reduce child poverty (and increase the efficiency) even further. For instance, there is a case for having the family benefit higher for the first child. Best Start, which provides additional support for recently born children, should be kept. The simulation also left the existing housing and early child education support in place; both can be rationalised, with further gains.
Since the UFB is fiscally balanced, if some children (and their parents) are better off, it follows that some others (and their parents) are worse off. In fact, the scheme pushes 6,000 children below the poverty line as well as lifting 70,000 above it (hence the net 64,000 children).
The UFB also reduces the incomes of many families, although they would still be above the poverty line. That poor targeting is where the inefficiency of the current scheme comes from. (Typically, these are smaller families; the current regime underfunds the poor in large families.) This is an example of Rabin’s Law – named after an American economist, Matthew Rabin – that all policy change makes somebody worse off.
The big challenge of introducing a new redistributive scheme is how to get from the current inefficient scheme to a more efficient one without causing too much pain to those who are made worse off. That is the trick of the different tax code. A family does not have to join the scheme. On the other hand the rule would be that no family could join the existing Heath-Robinson scheme. Moreover, the old scheme rates would not be increased, so that it would become less costly and eventually phase out over time over time as families dropped off. (So there would be transition costs, which would temporarily unbalance the budget. Most incremental redesigns assume that their new scheme would be more costly.)
What is the catch (once we have got through the transition phase)? First, it involves combining both parents’ income, but that happens already. But it does not involve any household paying more tax, since parents could leave the tax code and miss out on the accompanying family benefit.
The big issue is the 39 percent uniform income tax rate. Many people will judge that too high. A high rate is necessary in order to finance the scheme. The tax rate could be reduced, but that would mean a lower UFB and more children left in poverty (while well-off families would do better).
The UFB is an extension of minimum income support. Those over 65 already have it in New Zealand Superannuation. However, universal minimum income schemes require high tax rates.
It is possible that some families faced with the high rate will choose to reduce the hours they work. In effect, income inadequacy is forcing them to work longer hours than they judge prudent. Many will be able to spend more time with their children, which is no bad thing. The most likely reduction will be parents choosing to finish work early so they can be home in the afternoon or during school holidays.
In any case, there are families already facing marginal income taxes far in excess of 39 percent. It is just that the muddle of current rules makes it hard to identify when that happens; the UFB is more transparent and less confusing (it may even require fewer bureaucrats to run it).
The reason that the scheme does not eliminate all child poverty is because it does not provide a minimum income for parents – that would require much higher income tax rates. But it will markedly reduce income stress in most poor families below the poverty line.
So it is possible to reduce child poverty substantially with simpler, more transparent and better targeted income support at no extra cost to the taxpayer in the long run.
As a final point, observe that this is an example of how difficult it is to replace a badly designed policy by a better one – a consequence of Rabin’s law. A poor-quality policy makes some people inappropriately better off. A better policy will make them worse off and they will resist the change. There are many other examples of badly designed policies; sometimes I think New Zealand specialises in them.
*Brian Easton, an independent scholar, is an economist, social statistician, public policy analyst and historian. He was the Listener economic columnist from 1978 to 2014. This is a re-post of an article originally published on pundit.co.nz. It is here with permission.
137 Comments
Yeah but the problem is where is the opportunity for a bunch of middle class god botherers to pass judgement on how others spend their money / raise their children if you have a simple policy like that? Far better to employ rooms full of people to dictate your delusional lifestyle onto others.
Meanwhile, having their own hands out at every juncture, including if their house gets shaken, wet, suffers insufficient rental yields, gets taxed like others, or if they need an EV subsidy or Maori language lessons paid for, or if they reach a certain age and want welfare of their own regardless of need.
The presumption that so many seem to make that lots of the poor are abusing welfare is quite remarkable, in such light.
And if standing on one's own two feet is all it's cracked up to be, why don't these folk do it in hard times? Why do they seem to think it's the taxpayer's duty to protect their wealth?
There is and never will be a guarantee that all parents will be great parents, but that is no excuse to let another x0,000 children fall into poverty. Some would waste it, yes. How many do you think? If instead of a money figure, it was an amount of food, would people still be so resistant for children to receive support? Turns out yes according to David See-more hungry kids.
Agree, rather than give them money directly you supply food parcels. The good news is you'll find struggling families congregate into certain suburbs.
Buy a few bespoke trucks and hire some drivers. Draw up a delivery map and send them out to deliver fresh food to these poverty stricken families. A bit like how we used to deliver milk back in the days. For efficiency it may need to be kerb drop offs so the driver is not held up door knocking before lunch time, but an added risk of theft/vandalization as seen with an Auckland community garden recently.
https://www.stuff.co.nz/nz-news/350245782/community-gardeners-crops-pil…
Food stamps. Issued only to those who need them. Instead of paying to feed every kid who doesnt want or need the free breakfasts and lunches, the kids who do get fed instead. And every family not feeding their children should be automatically supervised by Oranga Tamariki as its child neglect.
There is a way. Food stamps only to be used in buying food or clothing etc. Used to used back in the 50s. You could have fuel stamps school books fees you name it. Can't be used on pokies ciggies alcohol. And if the govt was really smart they would go to the supermarkets and put the pressure on them that the stamp holders get a discount.
Global studies have consistently proven that there are three things that need to be done in order to avoid living in poverty.
1. Finish high school. NZ kids dont even turn up for school, and people laugh at David Seymour for attempting to make them.
2. Be in full time paid employment. In NZ, after a 45% increase in benefit payments under Labour, people now earn more on a benefit than they do working, with a single parent of two kids making $52k a year and a 2 parent family earning $63k a year which is more than the median wage (which is $61k pa)
3. Dont have children unless in a stable 2 parent relationship. There has been a 28% increase in the number of sole parents on the benefit in the last 6 years under Labour, made worse by the fact that people on the parents benefit dont even have to look for work anymore (see #2 above).
So in summary, paying beneficiaries and other low income people to keep producing children they (and the taxpayer) cant afford, while addressing none of the above, simply ensures child poverty will increase rather than decrease. Worse, studies show poverty and welfare dependence also becomes inter-generational.
The starting point is The Christchurch Health and Development Study. It affirms many of the above claims. A stable family environment and the mother's educational level are 2 of the strongest predictors of a child's outcome. Whilst I am a militant atheist, the destruction of the traditional family model plays a significant role in increasing rates of poverty. When it is acceptable to bring a child into this world when you have no means to house or cloth them let alone provide a nurturing environment the road to ruin has started.
NZ is now feeling the impact of this with crime and welfare dependency.
I'm fortunate to have listened to some of the authors and developmental paediatricians discussing this work and similar studies. The poverty largely sits with 2 ethnic groups which skews our national data and there is no intervention that will change this.
Shouldn't the government be working on creating an environment where more can prosper?
Labour, push up benefits to try and put a floor under the least well off.
National, push for a cohort of poorly paid workers to prop up business.
Kind of feels like both sides of the same coin.
You've been on Facebook doing your own research again haven't you? We've spoken about this.
And have you finished last weeks homework? https://www.khanacademy.org/math/probability/xa88397b6:scatterplots/est…
Absolutely KW. There is a 4th point. Your 3,...get an education, get a job, get married (stable relationship) plus another essential..."stay married".
All four easier said than done, but we are not talking about any sort of extreme. Just attending school and trying your best,...any job but give it your best shot, and taking a bit of time to establish compatability before leaping into bed. And as is commonly demonstrated a marriage separation is a very difficult economic exercise to pull off. It is difficult enough to establish one secure roof over a family's head, but extremely difficult to establish 2 roofs and stay financially afloat.
These 4 "virtues" were once standard issue, and reinforced at school,sunday school, and in available children's literature. Contrast the current situation in films, tv, magazines and internet where cynicism towards all the above is rife.
I don't get it (maybe I should read more slowly). If only families join the scheme, then they would all be benefiting from the UFB, except from those new families who happen to have high income, in which case they'd be taxed at 39% already. So where does the money come from? Not all from the new families?
The best case I can see here is that no family is better off than present from the tax switch, while some new families are worse off.
Yeah, no detail in the numbers. Especially if the 39% rate is applied to the first $1 of every family that could be a massive tax burden. For example if you earned $70k a year the PAYE would be $14,020. If you changed your tax code to 39% then the tax liability would be $27,300 a year.
The proposed payment of $255 a week per child = $13,260 pa.
Combine this with the current tax rates for a person on $70k and you get $27,280 ($13,260 plus $14,020). Strangely almost identical to the new 39% tax rate the person would need to sign up to.
Therefore, a person on $70k with one child would appear to be the same under the current system. However, currently that person will also be entitled to $70/wk in work tax credit and a $73/wk best start tax credit if the kid is under 3 year sold.
So no way they're voting for this policy.
Without the numbers then no way to consider the proposal for it's financial effect on people and whether it has a chance of getting voter buy in.
This is a terrible idea. Handling out money to poor people to have more children has been done to death here in NZ and it is a complete failure. Welfare is to provide a (temporary) safety net for those in need, not for those that think more children = more money. Education is the answer, and people need to realise they need to prepare for parenthood, not rely on others to fund it for them. The handouts provide a minimum so the outcome in terms of the child is 99% negative anyway. They answer is to not have children if you can’t afford it.
Word vomit: https://figure.nz/chart/2eIStXKBWssxMIze
Oh. I see. You are saying because we pay pensions then we should pay poor people to have children no questions asked. Nice one. Pensions are funded by taxation paid during years of employment - that is supposed to be the case. Child support for hopeless parents (in most cases), not so much.
No kidding. It is the way it has worked since forever. With an average KiwiSaver balance of 15k generation whatever and whatever are not doing that great a job of planning now are they. Now, I don't have KiwiSaver, because the concept is a joke, but I would expect younger people maybe have it. If not, what are these other plans.....all I see is complaining, and that does not seem to indicate progress or planning is in place.
I was wondering whether Mr Baywatch could enlighten me on the secret plans (I suspect there are no plans other than complaining a lot). But, nevertheless I was interested. I agree hollowing out ones KiwiSaver to buy a house or combat the cost of living 'crisis' is a crazy idea, and if they are doing that, then the secret plan is a dud.
My argument is that we currently fund retirees who have had 65 years to prepare for retirement 8 to 10 times the amount we fund children living in poverty who do not get to choose the environment they are born into. And actually it's likely greater disparity than that, a working family with two children needs to earn ~$110k before they are no longer eligible for tax credits. Are these your "in most cases hopeless parents"? What a dire state NZ would be in if all parents were actually as useless as these comments suggest.
How about breaking the cycle of welfare and poverty by providing these children better opportunities, some food to eat and accessible education which does not require the family own a car. Our birth rate is far FAR below reproductive rate, so we are at very little risk of overpopulation currently other than the wide open gate at the border. I simply do not understand how we as a society can accept so many children falling into poverty in one of the most self-inflicted expensive places to live on earth and then have the audacity to blame the parents.
Pensions are funded by taxation paid during years of employment - that is supposed to be the case.
No, it's a benefit just like the rest. This is what people tell themselves to make them feel better about it, but one can simply live a life on a benefit and then claim the super the very moment they qualify, as it is a benefit. Conversely one could live an entire life abroad, and return to NZ 6months and 1 days of the year and still qualify for the super benefit. Or build a property portfolio which pays net zero tax, live off the rent and still qualify for the super benefit. It's a benefit.
....and ? I think you are confused. People receiving super have been told if they go through like and pay their taxes, then they will receive a small pension. That hasn't changed, and people rely on it. People are not being forced to have children. We need to support able people to have families, i.e. intelligent productive people having children, whilst they take some time off (paid parental leave), and nurturing children into becoming productive adults is much better than paying people (stay and home parents on the benefit) to produce a nation of thickets.
Someone who has been on the unemployment benefit their whole life gets the same Superannuation as the largest taxpayers. We all pay tax because we have to, not because of 'stories we are told'.
A lot of old people rely on Superannuation. Some don't need it at all.
I'm not sure of the relevance of Someone who has been on the unemployment benefit their whole life gets the same Superannuation as the largest taxpayers, Super is universal, because it is simple, and fair. Handling out free money to people so they can have kids that not bring them up properly (if ay all) is completely different. People don't rely on super because they hear stories about it, they do so because it is government policy, has not changed, and many who are expecting to receive it now have no alternative.
The ones who have no alternative would qualify on the basis of need anyway, same as poor children like John Key was (albeit his mother received the welfare and the state house).
We also obviously provide far too much welfarism for property here, so it'd make more sense for ROI to society to fund the turnaround of more young John Keys into businesspeople like he became, than spending taxpayer money on propping up and bailing out property (and older folk who don't need it).
There seems too much entitlement rather than consideration of more effective spend in society. Welfare to the likes of John Key (and Paula Bennett) was more generous, and we seem to have eroded help for the poor in favour of more welfarism for property and older folk - including the range of additional benefits such as free travel (even as we raise kids' fares). Too much entitlement mentality indeed.
Also, when today's olds were told they'd get the pension taxes were higher, funding more provisions for the young who would later pay their pension. Today's olds cut those taxes and provisions for the younger, so it makes no sense to expect all for themselves all the same.
Expanding their own benefits, cutting provisions for the younger generations so as to cut their own taxes, then ranting about help for the poor...that combination looks incredibly entitled.
Honestly, yes your conflicting comments have me confused what your point is.
1, poor people should not get welfare, only people who are intelligent and productive are deserving of support.
2, super is fine because those people paid their tax (no they didn't), and that means it is already funded (no it isn't) and it's small (it's larger than our entire healthcare cost)
3, parents should be working and setting an example to their children by never being available.
4, 6 months PPL is enough to nurture children into becoming productive adults.
OK smart guy...
1, poor people should not get welfare, only people who are intelligent and productive are deserving of support. No, people should not get additional support to have additional children.
2, super is fine because those people paid their tax (no they didn't), and that means it is already funded (no it isn't) and it's small (it's larger than our entire healthcare cost) Super is universal and always has been. It is fair and easy to manage.
3, parents should be working and setting an example to their children by never being available. No, I didn't say that. People should plan to have children and if they cannot manage or be around, then they have no business having them.
4, 6 months PPL is enough to nurture children into becoming productive adults. Yes, exactly. If you are productive person that has planned to have children then 6 months is more than enough to have the child and then return to work. Ideally only one parent should work (this is part of proper planning). The mother, if she does want to return to work, she can (or the father or whatever). But, they get six months to spend with the child and decide.
and birth control is now available by a pill -as is abortion -which is safer than panadol and so no reason for children to be born that are not wanted
Might seem a bit crude I know but planned parenthood has way better outcomes for the children than unplanned parenthood - especially for those with single parents
The reality is that even though we are told that our taxes fund our pensions, there is no pool of money put away for for this. Your taxation goes to pay someone else pension (that is retired now), your own pension should it still exist will be funded in the same way. In my view it should not be that way. Governments should have to put away a certain percentage of pension payment contributions, but the reality is they don't. When in surplus it is a great idea, when borrowing to do the same thing, not so much.
Borrowing doesn't finance anything that the government does. Issuing bonds removes the governments currency from the commercial banking systems exchange settlement accounts at the Reserve Bank and which the governments spending put there. Bondholders cannot create our currency, only the government can do that.
So, when someone makes a comment like "Pensions are funded by taxation paid during years of employment - that is supposed to be the case". You take it to mean that the part before the bold is the assertion that it is correct. Interesting. Do you read whole books or just the first few pages and make assumptions about what the rest says too.....
Pays to read the whole sentence, which is what people generally don't do and get themselves into all sorts of problems, and leads to them needing handouts in real life, and then blame everyone else. I wonder how many people have been sucked into zero % interest on HP, and accepted payments that do not pay the full balance when the term is finished, and are then shocked that they have been charged 35% on the original balance. Pays to read everything you see....
You clearly raise the "Pensions are funded by taxation paid during years of employment" statement to distinguish NZ Super from free handouts for having children. You are taking the position that NZ Super is funded by the recipient and therefore not a handout.
Now you're trying to twist the context of your statement by saying it was conditional on "well, that's how it is supposed to work"... effectively conceding NZ Super is a handout and not dependent on the recipient having paid tax. Which begs the question as to why you would even make the first part of the statement in the first place.
You're clearly a defensive boomer who wants NZ Super to be considered an investment return rather than what it really is, a benefit/handout like all the others.
Wrong. The pension is paid to retired folk by working people through taxation. That is pretty clear. There is no magic pot of money. No, I am not a boomer, I am only in my 40s, but I have more than enough to retire now, if I choose, and have an epic retirement. But, I will continue to work, and I will also take the state super. I'll probably spend it shouting rounds at the pub...
I'm sorry but this is the most rediculous view on interest in a good while.
Super is a benefit, as has been my point through this whole thread. It pays far and above all other benefits. There is no point in arguing this as it is true. Go find all your own sources.
You're argument though is that it's justified by the false assumption that people have worked and paid tax in NZ their whole lives. You would like to spend yours shouting beers in the pub. Yet this whole article and conversation is about children living in poverty, and you say they do not deserve a single dime because its their parents fault. Paying tax does not fund spending, it simply balances it out. We are choosing for these children to go hungry.
So what you're really saying is that your entitlement to shout beers with your mates in the pub at a social expense is more important than the welfare of >100,000 children in this country.
GTFO.
You really hate success it seems. I agree that this thread is not about super. It wasn’t me that compared handouts to useless parents to super for deserving tax payers, but I agree that for whatever reason that is where it has ended up. Take your envy somewhere else I would suggest. Go to any financial advisor and they will tell you if you to consider super the cream on the top of a proper financial plan. For me, that is what it will be, and it’s also the case for many others.
Nice graph. (https://figure.nz/chart/2eIStXKBWssxMIze)
Perhaps also worth pointing out the the RBNZ, by pushing up interests rates, benefits net savers (often receiving superannuation) while punishing the mortgage holders who are usually younger, with young families and working ... and paying PAYE tax to top up the oldies incomes even further!
Scrapping superannuation (and all the other market distorting benefits that are massively divisive as they set different groups against each other!) and implementing a UBI scheme looks pretty sensible about now. (Sorry to all the public servants that would lose their jobs tho. UBI schemes just won't need anything like as many of them.)
(Note: I'm very close to retirement but I'm also a big fan of fairness ... A trait that used to be a very Kiwi thing.)
Wow. You mean people that save money could get some benefit if interest rates go up….you could be on to something. Obviously it’s not fair for those that borrowed….but that’s the entire point of interest now isn’t it. Still earning interest is still pointless anyway since after tax you don’t beat inflation so it’s still lose lose. Internet rates need to go up further so there is a net gain to depositors in real terms.
Am I getting the wrong message from many of the comments. You seem to be aiming at the poverty end of the spectrum.
WFF and a UFB isn't for that, it's mainstream and taken up by most families at one stage or another. It's in existence because our wages are to low and our costs are too high. All the blather about to encouraging breeding is just that, blather.
While I am concerned about the fundamental idea of paying people to breed, there and even more fundamental way to improve child poverty across the board - reducing housing costs! Make it a lot harder and more expensive to hold investment/rental properties including limiting the amount of rent that can be charged.
But there is merit in the concern of people expecting the state to pay them to have children. For millennia people had to be able to provide for any children they had. To feed, clothe and maybe educate them. Our social welfare system has turned that on its head. That should change.
But that would just result in less private rental housing, and more public housing. Beneficiaries already know that the fastest way to get a brand new house off the Govt is to pump out as many kids as possible. The more kids you have, the higher up the waiting list you go. So taxpayers would be paying even more for housing than they do now.
Where are all these people who are pumping out so many kids? Surely anecdotal https://www.macrotrends.net/global-metrics/countries/NZL/new-zealand/bi…
K.W. is referring to the 12% of households that consist of 5 or more people. Would really depend on what the definition of "pumping out kids" is.
And how many of these households are made up of student accommodation, flat mates, 2 parent well off working families with 3 or more children etc.
It would be good to see them quantify their stereotype of beneficiaries being exploitative welfare mums pumping out babies. They never seem to though, perhaps doing so would undermine the idea. Perhaps most poor beneficiaries (not counting elderly, or property speculators) are like John Key's mum.
speaking of sterotypes:
LINDSAY MITCHELL: Babies and benefits - no good news (bassettbrashandhide.com)
I keep getting told that the superannuation issue is not relevant to the discussion, but there you are bringing it up again. I do actually have a problem with useless parents that stayed on the benefit during working age, then moving on to collect super - as there contribution to society is zero (or negative in many cases). But, the problem is that once they are old they actually cannot work (whereas before they could but where just too useless and lazy). Super is universal, and so we just have to accept that, or have starving old people on the street.
Far out, the amount of people on here acting as if it's the 50s and we're having a baby boom.
Key takeaways:
- 20% of babies born will be reliant on a benefit "by Christmas".
- 72% of those are sole parents.
- Therefore the Sole Parent benefit is an incentive for people to have more children and hope they have to do it alone. (???)
- 5.6% of families have parents which stay together rely on a benefit.
- Asians are better at raising children because of some chart.
So if these people who have ended up on welfare had chosen not to have children, here are the real world stats:
- Natural population growth last year would have been around 8,000. (~19,000 net increase last year, minus 20% of ~57,000 births)
- Next year it would be just over 5,000 based on current births/deaths trends (births steadily in decline, deaths steadily increasing, net ~2000 decline per year)
- By the end of 2027 our natural population would be in decline
- Next year there will be more people over 65 than under 15
- Interest article suggests half of these beneficiary children could be lifted out of poverty at no additional govt cost, and reduced cost over time as fewer and fewer babies are born.
- Due to natural population decline, additional spend on benefits beyond current expenditure assuming welfare rates remain the same could only be attributed to mass immigration.
So we're really crying about 5.6% of parents who rely on a benefit under their own inability to support themselves, assuming all "failed planning" circumstances (which I would argue not always the case). Given the population under 15 is about the same currently as that over 65, we're talking about a problem that is 1/20th the cost of superannuation.
Population growth in decline, our job seekers benefit increases are due to attempting to pump immigration and run a low wage economy which heavily relies on joblessness and benefit schemes by design.
Great job. Taking responsibility. Seems it is a foreign concept to most of the population, and a majority here. Taking responsibility like that is great for your kids as well, they recognize and learn, which is much better than learning that handouts are needed to survive.
I've been a staunch supporter of quarterly payments to women currently receiving a benefit NOT to get pregnant again e.g. $500/QTR. Payable between 18-35yr. The accrued costs would be less than the associated child support and increased likelihood the resultant children would be welfare recipients.
Raising children to be healthy, well educated and productive adults is not a cost to the country it is an investment and when our birthrate is already plummeting.
The biggest cause of poverty is our high cost of rents and housing and where housing is seen as something to make money from rather than just as a place to live. The governments own policies, a lack of controls on banking and a failure to build enough houses when we have rampant immigration can take much of the blame for this.
It's articles like this that really flush out the people that don't understand how modern capitalist economies works.
Firstly, as Brian starts to illustrate above, poverty is a policy choice. Our economy would not function without poverty. Think about it. If everyone could work 9-5 at more than $22 / hour, how much would farms have to pay their fruit-pickers? How much would hospo staff need to be paid to work nights in a bar on Queen St? How much would home care workers need to be paid to visit older people in their homes and help them get clean and take their meds?
That's why we need an involuntarily unemployed army of people - to ensure that there are enough people desperate enough to do crap, insecure, poorly paid and unfulfilling work so that middle-class swing voters can have cheap services. Obviously, we also can't have workers gaining any modicum of bargaining power because that will upset our donors and cause prices to go up to what they would be if businesses were not subsidised by in-work benefits and an economic system that guarantees a ready supply of powerless workers. I won't go into how we also rely absolutely on the same exploitation of workers abroad (or RSE).
I also hear otherwise sensible people push the idea that everyone and anyone can get ahead if they just try harder at school, or knuckle down at work. Even if we ignore the circumstances that people have ended up in through no fault of their own, just read this sentence out loud and tell me it makes sense.
'Everyone can beat the odds if they try hard enough.'
They're called the odds for a reason. Think about it. Our economy will always need hundreds of thousands of people in allegedly 'low-skilled' work - supermarket staff, carers, cleaners, hospo staff, labourers etc. If that is 20% of our workforce, then 20% of our workers will be doing that work. Yes, if someone works hard they might scramble ahead a bit but they will just push someone else down into that low paid work. Don't even get me started on 'sorry, but if you're in this low paid cohort you should not have kids' crap. Jeez.
Thank you Jtoe. Brian Easton can be hard reading and it's easy to turn off. I found that out with his Listener articles 30 years ago but once you get in the groove and read more slowly his words become eye opening and connections are made. A 2018 book published for Te whanau o Waipareira by Brian ( Heke Tangata) outlines and gives specific Maori background to many of the statements made in the above article. A significant amount of the research material in Heke Tangata made it into his most recent work - Not in Narrow Seas - an economic history of New Zealand and shows a carefully reasoned statistical analysis why we are in the situation today with generational poverty.
Thank you for the comment and for raising the issue of intergenerational stress and trauma. Sadly, many of the commenters on here seem to thinkn we live in a meritocracy (at least until they see someone doing well who they deem to have little merit!)
I do enjoy Brian's work. I just think it is always worth pointing out that our political and economic system is designed to create precarity, stress and to ensure that workers' necks remain under the boots of landlords and employers.
" I just think it is always worth pointing out that our political and economic system is designed to create precarity, stress and to ensure that workers' necks remain under the boots of landlords and employers".....
Currently....it wasnt always so. There was a time when remuneration was considerably more compressed in NZ...but that was in a world much less accessible than todays, though that may well change.
From ~50 years ago...Supertramp
"...You say, "It all depends on money
And who is in your family tree"
Right (right), you're bloody well right..."
https://youtu.be/iaxAZYQB44o?feature=shared
It was ever thus: ? is, what are you practically going to do about it in your life?
If we only allowed planned child conceptions, 1/2 of us wouldn't be here.
And circumstances change, especially for women who are survivors of abuse.
You guys make it sound like all beneficiary planned it all to get as much money as possible from the taxpayers. Some probably do, but it would be a minority.
Simple… if ya can’t afford children…don’t have them..
P.S. many so called adults in this country need education on (1) how to be a good and useful citizen (2) your responsibilities to yourself, those you love and your community.
While I’m on it…where are all the Maori leaders standing up showing their people how to improve their lot without blame and victim-hood!
I am generally in favour of UBIs, so a family version is an interesting concept. However, I’m a bit confused as to how it is going to pay for itself. The article says some will be worse off suggesting they will pay, but it also says they can opt out of the scheme. Am I missing something?
This...
"The big challenge of introducing a new redistributive scheme is how to get from the current inefficient scheme to a more efficient one without causing too much pain to those who are made worse off. That is the trick of the different tax code. A family does not have to join the scheme. On the other hand the rule would be that no family could join the existing Heath-Robinson scheme. Moreover, the old scheme rates would not be increased, so that it would become less costly and eventually phase out over time over time as families dropped off. (So there would be transition costs, which would temporarily unbalance the budget. Most incremental redesigns assume that their new scheme would be more costly.)"
Really interesting proposal, this is the sort of thing a National / Act government should be looking at when they talk about finding efficiencies.
More kids out of poverty using the same tax resources. Less government input better outcomes.
If they actually did this sort of thing instead of trying to find efficiencies by forcing ministries to randomly cut headcount with no direction on outcomes I would vote for them.
Shane Jeremy et al. Have turned the thread into another boring old man shouting at the clouds theme ... would have been good to actually discuss the merits of the proposal instead of the usual uninformed reckons and "common sense" solutions.
The clueless always think handing out free money to everyone is a good idea. That's why Labour is no longer in government, they were clueless as well, which is now widely recognized. Maybe you should get back to your public service cubical and keep your head down rather than promoting the idea of giving away money to all and sundry. There's a good chap.
""The big challenge of introducing a new redistributive scheme "" is always persuading voters that it is a good idea. Especially those like myself you will be worse off. But the solution is simple: be like the French and declare by law children belong to the state. This is to an extent true anyway - parents can't smack their own children let alone abuse them, even those with no children contribute taxes to pay for schools, children playgrounds and sports fields; tax-payers grumble about various govt expenditure but not on paying for schools and teachers. The reality is today's kids will the ones who support us when we are too old to do anything so investment in children is the wisest investment. It is just a matter of changing how we look at things.
One benefit of seeing children in this way is that when the child arrives at school hungry rather than grumbling at David Seymour we arrest the parents asking them where did they spend the $225 this week? Similar with truancy being parents at fault for failing to care for govt property.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.