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Johnny’s Report Card – National Standards Assessment y/e 2012 – inequality & poverty
To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.
The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.
Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc) in 2008 and four years in office to make good on it’s election promises..
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Inequality & Poverty
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The rhetoric:
“You can measure a society by how it looks after its most vunerable, once I was one of them. I will never turn my back on that.
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Yet, also, you can measure a society by how many vulnerable people it creates – people who are able to work, and able to take responsibility for their own lives and their children’s lives, yet end up depending long-term on the State.” – John Key, 28 November 2006
See: Speech to North Shore National Party luncheon
“My father died when I was young. My mother was, for a time, on the Widow’s Benefit, and also worked as a cleaner. But the State ensured that I had a roof over my head and money for my mother to put food on the table. It also gave me the opportunity to have a good education. My mother made sure I took that opportunity, and the rest was up to me.” – John Key, 30 Jan 2007
See: The Kiwi Way: A Fair Go For All
“I have said before that I believe in the welfare state and that I will never turn my back on it. We should be proud to be a country that looks after its most vulnerable citizens. We should be proud to be a country that supports people when they can’t find work, are ill, or aren’t able to work. ”- John Key, 30 Jan 2007
See: IBID
“When Sir Ed climbed Mt Everest back in 1953, he wasn’t the only New Zealander on top of the world. We all were. We were among the five wealthiest countries on earth. Not any more.
Fifty-five years on, we are no longer an Everest nation. We are among the foothill nations at the base of the OECD wealth mountain. Number 22 for income per person, and falling.
But what does a wealth ranking matter, you might ask? Why does it matter if we’re number 22 or number four?
It matters because at number 22 your income is lower, you have to work harder, and you can save less. You face more uncertainty when things go wrong, when you or your family get sick or lose a job. No New Zealand sports team would be happy to be number 22. Why is the Government?
This is a great country. But it could be so much greater. It has been so much greater.
So the question I’m asking Kiwi voters is this: Do you really believe this is as good as it gets for New Zealand? Or are you prepared to back yourselves and this country to be greater still? National certainly is.
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So, make no mistake: this election won’t be fought only on Labour’s economic legacy. National will be asking Labour to front up on their social legacy, too. Many of the social problems the Government said it would solve have only got worse.
This time a year ago, I talked about the underclass that has been allowed to develop in New Zealand. Labour said the problem didn’t exist. They said there was no underclass in New Zealand.
But who now could deny it? 2007 showed us its bitter fruits. The dramatic drive-by shooting of two-year-old Jhia Te Tua, caught in a battle between two gangs in Wanganui. The incidence of typhoid, a Third World disease, reaching a 20-year high. The horrific torture and eventual death of three-year-old Nia Glassie. The staggering discovery of a lost tribe of 6,000 children who are not enrolled at any school.
The list goes on and on. The fact is, that under Labour, there has been no let-up in the drift to social and economic separatism.
We don’t need more of their hand-wringing, their strategies, and their interdepartmental working groups. What’s needed is the courage to make the tough calls to fix these problems.” – John Key, 29 January 2008
See: A Fresh Start for New Zealand
“I’m a product of the welfare state – there hasn’t been any great secret about that.” – John Key, 27 Aug 2011
See: ‘Socialist streak’ just means we have a heart, says Key
The results:
Interestingly, whilst Key’s 2008 speech (A Fresh Start for New Zealand) started off describing New Zealand’s growing underclass, National’s Dear Leader went on to describe a series of punitive actions that his Administration would undertake, if elected to power.
The following sub-headings in Key’s speech are illuminating,
- Youth Plan (education, youth crime)
- Youth Guarantee (education, training, universal educational entitlement, threat of benefit sanctions)
- Youth Justice (extending Youth Court; tougher sentences for youth offenders; new Youth Court orders)
- New powers for the Youth Court
- First, the power to issue parenting orders.
- Secondly, the power to refer young offenders to mentoring programmes.
- Thirdly, the power to refer young offenders to compulsory drug or alcohol rehabilitation programmes.
- Tougher sentences
- The first is longer residential sentences.
- In addition, National will fund a new type of programme for teenagers who aren’t bad enough to be put in a youth justice facility but who need a serious dose of intervention.
- National will fund a new range of revolutionary ‘Fresh Start Programmes’. (boot camps)
- Finally, we think the Youth Court needs better teeth for following up serious youth offenders when they are released back into the community.
This was John Key’s “vision” of a “Fresh Start for New Zealand”; more punitive action against youth offenders – but precious little to address the root causes of youth crime; poverty, lack of jobs, poor housing, worsening health, lack of training and apprenticeships, etc, etc, etc.
Key’s “solution” was to treat the symptoms of this country’s growing underclass.
So it should be hardly any surprise that those symptoms worsened, and the underclass; prison population; domestic violence; hungry children; poor housing – all grew.
The truly unbelievable aspect to Key’s shonkey speech in 2008 was how comprehensively New Zealand voters sucked it up, en masse. (We seriously need to introduce comprehensive Civics courses in our schools, to teach young New Zealanders how to recognise and deconstruct political BS.)
Tax cuts:
Whichever way we look at it, New Zealand in the last four years has become a more unequal society, and with growing poverty.
The first causal factor was the 2009 and 2010 tax cuts, which gave the most to the highest income earners and most wealthy New Zealanders,
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When, on 1 April 2009, then-Maori Party MP, Rahui Katene asked John Key in Parliament,
“How do low-income New Zealanders benefit from the tax changes introduced today?”
Dear Leader replied,
“They benefit because 630,000 New Zealanders—the New Zealanders who do not have children and who have been relatively low-income New Zealanders, and who got absolutely nothing under the previous Labour Government for 9 years—get $10 a week, or $500 a year. It is a small start, and it will be welcomed.”
See: TheyWorkForYou Blog – Tax Cuts—Implementation
At least Key wasn’t bullshitting us this time; for those on minimum wage up to it was indeed small. Someone on $100,000 would receive two and a half times more than someone on minimum wage.
The following year’s October tax cuts were hardly better – but this time the rate of GST was increased from 12.5% to 15%,
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The impact on low-income families – along with increased costs for medicines (see: Prescription charges to increase), and other user-pays government fees – would be harsh.
Contrary to the NZ Herald’s claim above, the average earner would not be “better off”. The $15 a week “extra” would be quickly swallowed up in rising government charges; medicine prescriptions; increased petrol taxes; and the flow-on inflationary effects throughout the economy.
This was not a “tax switch” – it was a tax-swindle – with the richest making the biggest gains.
Interestingly, ACT’s Roger Douglas – commenting on the 2009 tax cuts – realised that National was having to borrow heavily to finance said tax-cuts,
“Does the Prime Minister agree with Professor Eric Leeper’s statement in the latest Reserve Bank Bulletin that counter-cyclical fiscal policy could actually be counter-productive; if not, why not; if yes, why, then, is he borrowing $1 billion plus interest a year in order to give tax relief of $1 billion?” – Roger Douglas, 1 April 2009
So much for National’s promises in 2008,
“National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing.
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This makes it absolutely clear that to fund National’s tax package there is no requirement for additional borrowing and there is no requirement to cut public services.”
Salvation Army Report: The Growing Divide – A state of the Nation Report 2012
This document by the Salvation Army is one of the most insightful and far-reaching analyses of current economic stagnation; political factors; and related social problems. It pulls no punches.
This blogger encourages people to read the Report (it’s written in plain english; very little jargon; and contains excellent data, with references). It should be put into the letterboxes of every home in this country. Click here to link to the report.
[NB: The report was written at a time when unemployment was at 6.3%. Since then it has increased three consecutive Quarters to the current 7.3% (see: Unemployment January 2012 to November 2012.]
Amongst the Report’s findings,
1. Inflation, higher prices, increased GST, raised indirect taxes (eg, fuel taxes), and government charges, have off-set the tax cuts of October 2010.
2. If New Zealand is to return to the historically low rate of unemployment of 3.8% in December 2006, (from the then-figure of 6.3%), we would require 90,000 jobs, in on top of 25,000 to 30,000 jobs required each and every year just to keep up with the growth of the labour force. The figure of 90,000 will have increased as unemployment now stands at 7.3%.
3. The rapid growth in the labour force participation rate of people aged 65+ (from 14.1% in December 2006, to 19.5% in December 2011) has been at the expense of falling employment participation of young people in the 15 – 19 year old age group.
Those in the 15 – 19 year old age group, the Report states, have “borne the brunt of the recession and tightening of the job market”. Unemployment for this group rose from 14.3% in December 2006, to 24.2% in December 2011.
It is also this group targetted by National’s harsh “welfare reforms”, which attempts to blame young people as “work shy” – a ‘double whammy’ from the Global Financial Crisis and a right wing government keen to shift blame for rising unemployment onto powerless victims of the Recession.
4. The numbers of welfare recipients receiving the Domestic Purposes Benefit has also been affected by the Global Financial Crisis and resultant Great Recession. DPB recipients dropped from a peak of approximately 111,000 in late 2003, to 96,000 in mid 2008. Since 2008, and as redundancies increased; unemployment rose; and jobs disappeared, the number reversed. DPB recipients skyrocketed to an all time record of 114,230 benefits by December 2011.
Far from being “bene bludgers” opting for the DPB as a “lifestyle choice” (which is constantly parrotted by ill-informed conservatives and low information voters), solo-parents are as vulnerable to recessionary forces as other workers.
5. In the year to December 2011, average weekly earnings rose a only 2.6% from $991.05 to $1016.95. Taking annual inflation of 1.8% into account, weekly earnings rose by a fractional 0.8%. With increases in rent, fuel tax, and other government charges, that increase will have vanished altogether.
6. The Report gave as an example of unequal wage increases the difference between hourly earnings in the finance sector increasing by $1.01 per hour, from $36.63 per hour in June 2011 to $37.64 in December 2011.
By contrast, the average wage in the traditionally poorly paid accommodation sector increased by only 3 cents an hour from $16.40 to $16.43 per hour.This was a clear illustration of the average hourly earnings of the highest paid sector increasing 2.3 times more than those for lower paid workers.
7. Most of the increase in State benefit payments over the past five years was made as higher spending on New Zealand Superannuation (43% of the increase) and Working for Families (37% of the increase). Approximately 568,000 people were receiving superannuation by June 2011.
This compared to 319,000 of other welfare recipents as at December 2011 – up from 264,500 from December 2006. Welfare numbers were dependent on the economy and increased only because of the impact by the GFC-caused Recession.
8. Food parcels issued to families and people in need doubled from 24,250 in 2006, to 53,360 in 2011. Again, this was in accordance with the advent of the GFC in 2007/08; skyrocketting unemployment; and a lack of job-creation policies by National, once it won the election in late 2008. (John Key admitted to this on 18 October 2011. See: Key admits underclass still growing)
9. Inflation of living costs for 2011 was fractionally higher for Low-Income Household CPI at 2.1% than it was for the All Groups CPIs, at 1.8%. Low-Income Households were more vulnerable to increasing costs such as rent, government charges, and gst increases.
10. The Report correctly predicted that levels of unemployment would rise during 2012, and would negatively impact on growth in wages and salaries of poorest paid workers.
For a full understanding the the Report, it is recommended that people read the document in it’s entirety, as I have abridged and condensed much of the information contained therein.
The Report reinforces anecdotal evidence, facts, and stats, that are already in wide circulation and confirms that jobs, incomes, and those receiving social welfare assistance are all affected by the global downturn over the last four to five years.
After all, John Key uses that very excuse to explain away National’s poor economic performance,
“We did inherit a pretty bad situation with the global financial crisis... ” – John Key, 11 Sept 2011
See: View from the top
Ministry of Social Development: The widening gap: perceptions of poverty and income inequalities and implications for health and social outcomes
In New Zealand, income inequalities have increased since the neo-liberal reforms and benefit cuts of the late 1980s and 1990s, although the rate has slowed this decade (Blakely et al. 2007, Ministry of Social Development 2006, Ministry of Social Development 2007). The New Zealand Living Standards 2004 report showed a million New Zealanders living in some degree of hardship, with a quarter of these in severe hardship. Despite the buoyant economy and falls in unemployment levels, not only was there a slight increase in the overall percentage of those living in poverty between 2000 and 2004, but those with the most restricted living standards had slipped deeper into poverty (poverty defined as exclusion from the minimum acceptable way of life in one’s own society because of inadequate resources) (Ministry of Social Development 2006, 2007).
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This greater income inequality has seen New Zealand move into 18th place out of 25 in the OECD in terms of income inequality from 1982 to 2004 (Ministry of Social Development 2007). Over the preceding two decades New Zealand experienced the largest growth in inequalities in the OECD (2000 figures), moving from two Gini coefficient points below the OECD average to three Gini points above (Ministry of Social Development 2007:45-46). One indication of the impact of these inequalities has been that relative poverty rates, including child poverty rates, have increased.
OECD: Growing Income Inequality in OECD Countries: What Drives it and How Can Policy Tackle it ?
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Over the two decades to the onset of the global economic crisis, real disposable household incomes increased in all OECD countries, by 1.7% a year, on average. In a large majority of OECD countries, household incomes of the top 10% grew faster than those of the poorest 10%, leading to widening income inequality. Differences in the pace of income growth across household groups were particularly pronounced in some of the English-speaking countries, some of the Nordic countries and Israel. In Israel and Japan, real incomes of people at the bottom of the income ladder actually have fallen since the mid-1980s.
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At present, across OECD countries, the average income of the richest 10% of the population is about nine times that of the poorest 10%. While this ratio is much lower in the Nordic countries and in many continental European countries, it rises to around 14 to 1 in Israel, Turkey and the United States, to a high of 27 to 1 in Chile and Mexico. The Gini coefficient, a standard measure of income inequality that ranges from zero (when everybody has identical incomes) to 1 (when all income goes to only one person), stood at 0.28 in the mid-1980s on average in OECD countries; by the late 2000s, it had increased by some 10%, to 0.31. On this measure, income inequality increased in 17 out of the 22 OECD countries for which data are available (Figure 1, left-hand panel). In Finland, Germany, Israel, New Zealand, Sweden and the United States, the Gini coefficient increased by more than 4 percentage points: and only five countries recorded drops, albeit small ones .
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[See also Addendum 2 below.]
So it’s official – the Great Experiment in free market reforms from the mid 1980s to the late 2000s, has produced growing inequality here in New Zealand. Indeed, the trend has been global,
Income inequality followed different patterns across OECD countries and there are signs that levels may be converging at a common and higher average. Inequality first began to rise in the late 1970s and early 1980s in some Anglophone countries, notably in the United Kingdom and the United States, followed by a more widespread increase from the late 1980s on. The most recent trends show a widening gap between poor and rich in some of the already high-inequality countries, such as Israel and the United States. But countries such as Denmark, Germany and Sweden, which have traditionally had low inequality, are no longer spared from the rising inequality trend: in fact, inequality grew more in these three countries than anywhere else during the past decade. However, some countries recorded declining income inequality recently, often from high levels (Chile, Mexico and Turkey).
It is no coincidence that the trends “first began to rise in the late 1970s and early 1980s in some Anglophone countries, notably in the United Kingdom and the United States” – that is the precise period when Margaret Thatcher won office in May 1979 and Ronald Reagan became US president in January 1981.
Our turn came three years later with the Lange/Douglas government that ushered in “Rogernomnics“.
The OECD report above is simply being ‘coy’ by not connecting-the-dots.
What is more telling? Any person reading this would not be surprised. We have become innured to an unfair economic system which produces unequal outcomes and great disparities in incomes and wealth. As the OECD report states with alarmingly candour,
Increases in household income inequality have been largely driven by changes in the distribution of wages and salaries which account for 75% of household incomes of working-age adults. With very few exceptions (France, Japan and Spain), wages of the 10% best-paid workers have risen relative to those of the 10% least-paid workers. This was due both to growing earnings’ shares at the top and declining shares at the bottom, but top earners saw their incomes rising particularly sharply (Atkinson, 2009). The highest 10% of earners have been leaving the middle earners behind more rapidly than the lowest earners have been drifting away from the middle.
Furthermore, as the OECD report points out, “…more working hours were lost among low-wage than among high-wage earners, again contributing to increasing earnings inequality“.
The OECD report is backed up by Statistics New Zealand,
As with total employment, the drop in full-time employment mainly reflected a decrease in male
full-time employment, which was down 12,000 (down 1.2 percent).
Usual hours worked decreased 0.4 percent – down to 79.6 million hours over the quarter. The
changes in full and part-time employment reflect the fall in the number of hours people usually
work during a week. Over the quarter, the number of hours people actually worked decreased
0.8 percent, down to 73.2 million hours.
See: Household Labour Force Survey: September 2012 quarter
Ministry of Social Development – Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011
Whilst New Zealand has no formal or official measure of poverty or material hardship/deprivation, there are studies and conclusions leading to reports that offer a disquieting insight into the state of income inequality, poverty, and child poverty in our country.
One such report was conducted by Bryan Perry for the Ministry of Social Development in August 2012, entitled the “Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011” – a 195 page study.
The full report is available here: MSD – Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011
A much-condensed precis of the Report;
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2012 MSD Household Incomes Report – ‘Summary’
- Household incomes BHC (before deducting housing costs) rose in real terms for all income groups from 2007 to 2009, continuing the steady growth that began in 1994,
- Income inequality increased significantly between 1988 to 2004, then fell from 2004 to 2007 as a result of the WFF package, and was still around the same level in 2009 as in 2007,
- Income inequality grew very rapidly from 1988 to 1992, followed by a slower but steady rise through to 2004,
- From 2004 to 2007 inequality fell mainly as a result of the WFF package,
- Median Household incomes fell 3% in real terms after little change (+1%) from HES 2009 to HES 2010,
- This fall followed a long and strong rise in the median from the mid 1990s to 2008-09 averaging 3% pa in real terms. GDP per capita increased at 2.5% pa over this period on averagwe,
- Incomes fell for deciles 3-6, but rose for the top decile especially,
- At the very bottom (P15 down), incomes were flat from HES 2010 to HES 2011 (protected by benefit rates being CPI adjusted and NZS being wage related),
- Inequality decreased significantly from HES 2009 to HES 2010 then rose from HES 2010 to HES 2011 to its highest level ever. This volatility reflects the impact of the GFC,
- On the AHC (HouseHold income after deducting housing costs) moving line measure, the child poverty rate increased from 2007 (22%) to 2009 (25%), reflecting the rise in the proportion of households with children with high ‘outgoings-to-income’ (OTIs),
- The 2009 child poverty rate is almost double the rate that prevailed in the early 1980s,
- In 2009, on the Social Report measure (AHC ‘fixed line’ 60%), there were 230,000 children (22%) below the low-income threshold (ie ‘in poverty’), down from 380,000 (37%) in 2001,
- Hardship rates for children rose from 15% in the 2007 HES to 21% in HES 2011 using the ELSI measure. In part, this reflects the falling incomes of those in deciles 3-6, some of whom may already have been in a precarious financial position – the loss of income has been enough to tip them into hardship even though their incomes are still above the poverty threshold,
- Chronic poverty (as defined in the Incomes Report) is about having an average household income over seven years that is below the poverty threshold over those years. Looking at children in poverty in a HES survey (cross-sectional), 60% of them are in chronic poverty in any survey and 40% in temporary poverty. In addition there are others who are in chronic poverty but not in current poverty in that one year – this group is about 20% of the number in current poverty.
- In 2009, between 460,000 and 780,000 people were in households with incomes below the low-income thresholds (ie ‘in poverty’),
- In 2009, on the Social Report measure (AHC ‘fixed line’ 60%), there were 650,000 (15%) below the low-income threshold (ie ‘in poverty’, down from 930,000 (25%) in 2001,
- In 2009, just over one in three poor children were from households where at least one adult was in full-time employment, down from around one in two before Working for Families (2004),
- Income poverty rates for single person working-age households trebled from the 1980s to 2007 (10% to 30%) and were 35% in 2011. One in 9 poor people and 1 in 4 poor households are from this group. The rates are higher for the older group living on their own (45-64 years) than for the younger group,
- In 2001, 42% of households in the lowest income quintile had high ‘outgoings-to-income’, but this fell to 34% by 2004 reflecting the introduction of income-related rents, and has remained steady since then (33% in 2009),
- In 2009, 37% of children lived in households with high ‘outgoings-to-income’, a rise from 32% in 2007, and 26% in 2004 – the 2004 figure was the lowest proportion for some time, following the introduction of income-related rents in 2001 (when the proportion with high ‘outgoings-to-income’ was 32%),
- In 2009, on the Social Report measure (AHC ‘fixed line’ 60%), there were 650,000 (15%) below the low-income threshold (ie ‘in poverty’, down from 930,000 (25%) in 2001,
- The child poverty rate increased from 2007 (22%) to 2009 (25%), reflecting the rise in the proportion of households with children with high ‘outgoings-to-income’,
- The 2009 child poverty rate is almost double the rate that prevailed in the early 1980s,
- Just over two of every three two parent families were dual earner families in 2009, up from one in two in the early 1980s, but down from nearly three in four in 2004,
- Children in sole parent families have a higher risk of hardship (46%) than those in two parent families (14%). This reflects the relatively low full-time employment rate for sole parents (35% in 2009) – 73% of sole parents were in receipt of a main benefit in 2009,
- The value of New Zealand Superannuation (NZS) fell further below the median household income from 2007 to 2009,
- People living in sole parent households are a relatively small subgroup, making up only 8% of the population. Only 3% of those in sole parent households are found in the top income quintile. On the other hand, a high proportion have incomes in the lower end of the income distribution.
- High housing costs relative to income are often associated with financial stress for low to middle income households. Low-income households especially can be left with insufficient income to meet other basic needs such as food, clothing, transport, medical care and education,
- For the bottom quintile, the proportion with high ‘outgoings-to-income’ reduced from 2001 to 2004 with the introduction of income related rents, then remained steady in 2007 and 2009 at the 2004 level.1 For all but the bottom quintile, the proportion with high housing costs rose strongly from 2004 to 2007. From 2007 to 2009, the situation for the second quintile continued to worsen, such that by 2009, each of the two lower quintiles had one in three households with high ‘outgoings-to-income’,
- From 2007 to 2009, median household incomes (BHC – HH income before deducting housing costs) rose by 4.3% pa in real terms (8.6% in total). This continues the steady growth in the median from the low point in 1994. The AHC (HH income after deducting housing costs) median rose less rapidly (3.2% pa), reflecting the relatively rapid rise in average accommodationcosts,
- The increasing dispersion of household incomes from the 1980s through to 2009 is clear. For the period as a whole, incomes for households above the median increased proportionately much more than did the incomes of households in the lower three deciles,
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In 2009 the incomes of the bottom 30% of the population were on average only a little better in real terms than those of their counterparts two decades earlier in 1988. On the other hand there were more substantial gains in the period for the top half of the distribution. The income distribution is therefore much more dispersed in 2009 than in 1988,
. - The most significant structural change to the income distribution over the two decades from 1984 to 2004 is a significant hollowing out of the middle parts of the distribution from $12,000 to $30,000 (equivalised) and a corresponding increase in the proportion of the population in higher income households. There was also a small increase in the proportion of the population in low-income households in this period. From 2004 to 2007, the impact of the Working for Families package in that period is very clear for low to middle income households.The income distribution was more dispersed in 2004 than in 1984. From 2004 to 2007 income inequality decreased.
- The significant change in shape of the income distribution from 2004 to 2007 reflects two main factors: (A) the impact of the WFF package on low to middle income households and (B) the reduction in the number of people in households whose main source of income is an income-tested benefit (100,000 fewer in 2007 than in 2004)
- As recently as 1996, the government of the time in New Zealand was openly disapproving of any poverty discourse. However, in 2002, in the context of the Agenda for Children, the government made a commitment to eliminate child poverty, and in the Speech from the Throne in November 2005, the Governor-General described the Working for Families package as “the biggest offensive on child poverty New Zealand has seen for decades”. The current National-led government, like the previous Labour-led government, espouses the principle that ‘paid work is the best way to reduce child poverty’. New Zealand does not however have an official poverty measure.
- The rise in moving line child poverty rates from 1990 to 1992 was driven by two factors: the rise in unemployment, and the 1991 benefit rate cuts which decreased real incomes for beneficiaries by a greater amount than the median fell in the period,
- From 1992 to 1998 the 60% of median moving line poverty rate for children fell as unemployment rates fell and incomes for those around the poverty line rose more quickly than the median in the period,
- From 1998 the median continued to grow in real terms, but the incomes of many low-income households with children remained fairly static through to 2004. This meant that the moving line child poverty rate rose to 2004, indicating that low-income households with children were on average further from the median in 2004 than in 1998,
- On the After Housing Costs (AHC) moving line measure, the child poverty rate increased from 2007 (22%) to 2009 (25%), reflecting the rise in the proportion of HouseHolds with children with high OTIs (‘outgoings-to-income’ ratio),
- From 2004 to 2007, the poverty rate fell strongly … for the working poor than for the beneficiary poor. There were no further policy changes to housing assistance from 2007 to 2009 – the maximum rates of assistance remained fixed and did not move in line with movements in housing costs, and net housing expenditure rose for low-income households with children. This is reflected in the rise in child poverty rates from 2007 to 2009 using the moving line AHC approach.
.(Report Note: when a household spends more than 30% of its income on accommodation it is said to have a high “OTI” – ‘outgoings-to-income’ ratio)
The above is a heavily condensed version of Bryan Perry’s report. For a full report, please refer to: Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011
It is fairly clear that income inequality is not only still prevalent – but increasing. The ‘Gini’ does not lie – and the Inequality Factor has risen from 30.2 to 33.5 (the higher the figure, the more inequality).
Child poverty is still with us, and remains New Zealand’s most critical problem (I refuse to call it an “issue”).
Despite John Key’s fine words and stirring rhetoric, National has failed to change it’s core “values” and adheres to a dogmatic faith in the Market to deliver solutions to poverty in our country.
Yet, John Key should know precisely what needs to be done. As he told the nation five years ago,
“My father died when I was young. My mother was, for a time, on the Widow’s Benefit, and also worked as a cleaner. But the State ensured that I had a roof over my head and money for my mother to put food on the table. It also gave me the opportunity to have a good education. My mother made sure I took that opportunity, and the rest was up to me.” – John Key, 30 Jan 2007
See: The Kiwi Way: A Fair Go For All
The State invested heavily in Mr Key – as it did with many other people prior to the Rogernomics roll-backs of the late 1980s – and New Zealand benefitted accordingly from that social investment.
The social welfare system is designed as a safety net for citizens in time of need. Whether through job losses or injury or raising children single-handed, our society – through the State – demands that no one suffers. (Never mind the deranged ravings of the ill-informed on talkback radio.)
However, there is another role for our welfare society; to guarantee that the young from impoverished and vulnerable families are accorded the same opportunities that other, luckier parents can provide for their own children.
This is a country of plenty. There is no reason why we cannot eradicate poverty; poor housing; disease; lack of adequate, nourishing food for all children; and low schooling/training outcomes.
The only reasons that this blogger can see for the perpetuation of poverty is a double curse on our country, namely,
- An irrational prejudice against the poor
- A debilitating lack of will
Until we resolve both of these collective “disabilities” to our vision for a better society, we will continue to reap the rotten fruits of our inaction.
On 28 November 2006, John Key said,
“You can measure a society by how it looks after its most vunerable, once I was one of them. I will never turn my back on that.”
I see no evidence of that.
Indeed, six years later, Key admitted that the underclass he spoke of has not diminished,
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Addendum 1
It is interesting and worthwhile to compare the rhetoric of John Key’s speech, A Fresh Start for New Zealand, with the data contained in the Salvation Army report, “The Growing Divide“. Both are worth reading. It rapidly becomes clear how Key cynically mis-represented facts to suit his Party’s election agenda.
Addendum 2
It is worth noting that the GINI Coefficient – which is one method by which to measure income inequality – shows interesting figures for New Zealand,
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Source: OECD Income distribution – Inequality (GINI co-efficient)
A high GINI factor (close to 1 or 100, expressed as a percentage) indicates maximum inequality. A figure at zero indicates absolute income equality.
New Zealand’s GINI Coefficient rose (income became more unequal) from the mid-1980s to around 2000. At the mid-2000s, the GINI Coefficient began to reduce – indicating incomes are becoming less unequal. (Though has not addressed growing poverty in this country.)
What factor intervened in the mid-2000s to stem the rising inequality of incomes?
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The same policy introduced by the preceding Labour Government, which Dear Leader, John Key, once described as “communism by stealth” (see: National accuses Government of communism by stealth) – but by 2008 had decided that he liked “Working for Families” after all (see: National to keep Working for Families unchanged).
After 2010, the GINI coefficient begins to rise again, as effects from our stagnating economy and National’s policies begin to over-take the positive income-redistribution aspects of ‘Working for Families’.
Income inequality in New Zealand is once again on the rise,
Gini scores (x100) for market and disposable household income, 1986 to 2011 (18-64 yrs)
-
HES year
Before taxes and transfers (market income)
After taxes and transfers (disposable income)
Reduction (%)
1986
36.4
26.4
27
1991
42.4
31.3
26
1996
43.1
32.9
24
2001
43.1
33.1
23
2004
41.7
32.9
21
2009
40.3
32.3
20
2010
38.3
30.2
21
2011
42.2
33.5
21
Source: MSD – Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011
Additional
Dominion Post: Children need changes now – commissioner
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=fs =
Johnny’s Report Card – National Standards Assessment – Sunrise, Sunset, and Outlooks
To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.
The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.
Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc) in 2008 and four years in office to make good on it’s election promises.
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Sunrise, Sunset, and Outlook for 2013
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“We need businesses producing high-value products for overseas markets and businesses using R&D to develop those products which drives other benefits, like better production processes and marketing. Basically it’s about using innovation to drive our economy.
We have some of these companies already – the likes of Fisher and Paykel, Tait and Rakon. Our world-leading dairy industry also owes much of its success to innovation.” – Jonathan Coleman, Associate Minister of Finance, 1 July 2011
See: EDANZ National Economic Development Forum – Speech Notes
It’s a funny old world we live in…
Sunrise Industries…
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Sex, gambling, tobacco, alcohol – the new profitable industries of the 1st century? We seem to have left out other “growth” industries, the modern sex-slave trade in women and children, and arms manufacturing.
Oh. Wait. Maybe not,
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Oh well, National and it’s free-market fellow-travellers will be delirious with joy. If there’s a buck to be made from vices and weapons, they’ll be happy as a pig in mud.
Now if only they can find the price of a soul, and a market for it…
And the Sun sets on…
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Meanwhile…
“ Basically it’s about using innovation to drive our economy. We have some of these companies already – the likes of Fisher and Paykel, Tait and Rakon. ” – Jonathan Coleman, Associate Minister of Finance, 1 July 2011
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Oh well, one (Tait) out of three still seems a ‘goer’. How long for, I wonder?
Meanwhile, how are our export and related sectors doing?
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And the stats back up the ODT story above,
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Source: New Zealand in Profile: 2012 – Economy
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Not too good it seems. The red-highlighted sectors all declined from 2006 to 2011.
National’s “hands off” doctrine, in deference of the ‘Invisible Hand of the Market’, is certainly achieving one result; giving advantage to our exporting competitors from other nations. The Nats seem resigned (hellbent?) to more job losses; more exporters going under; more skilled tradespeople leaving for Australia; and a further decline ineconomic growth,
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What the hell!? The export sector is a “declining industry“?!?!
When even National’s allies – the Manufacturers and Exporters Association – are calling for government intervention about the high New Zealand dollar, it really drives home the seriousness of the crisis. An economic crisis that this time had it’s origins on Molesworth Street – not Wall Street.
For National to persist in it’s “hands off” and obedience to Free Market dogma will have nasty consequences for our economy.
For 2013, expect,
- unemployment to rise
- the export sector to worsen
- growth to remain low, under 1%
- an early election this coming year, as Dunne and the Maori Party desert the National-led coalition.
It’s easy to predict – we’ve seen it all before.
Previous related blogposts
New Zealand’s OTHER secret shame
New Zealand’s OTHER secret shame – *Update*
NZ’s 21st Century Growth Industries – Drugs, Gambling, & Prostitution
Drugs & Gambling – NZ’s 21st Century Growth Industries?
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= fs =
Johnny’s Report Card – National Standards Assessment y/e 2012: trade
To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.
The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.
Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc) in 2008 and four years in office to make good on it’s election promises.
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Trade
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The rhetoric:
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The reality:
In simple terms, we, as a country, have continued to import more than we exported,
2008/09
The trade balance for December 2008/January 2009 was a deficit of $341 million. This compared with a surplus of $38.5 million in December 2007/January 2008. (See: Tradingeconomics – Balance of Trade)
2012
The trade balance for September/October 2012 was a deficit of $718 million. This compared with a deficit of $226 million for September/October 2011. (See: Tradingeconomics – Balance of Trade)
As reported in the NZ Herald on 27 November 2012, the annual deficit increased to $1.37 billion. (See: Trade deficit widens as dairy values fall)
In graph form,
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Source: Tradingeconomics – Balance of Trade
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On top of that, what we did export earned us less with the increasingly high value of the New Zealand dollar,
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Source: Tradingeconomics – New Zealand Dollar
.
As Bloomberg wrote in October,
New Zealand’s annual trade deficit swelled to the widest since 2009 as exports fell to a 20-month low amid a decline in dairy shipments and a rising currency.
See: New Zealand’s Annual Trade Deficit Swells to Widest Since 2009 – Bloomberg
The high NZ Dollar not only affects the value of our exports (and thus helps to pay for imports) but has a direct, inescapable impact on our employment,
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Whilst governments around the world were – and still are – manipulating their currencies downward, with several techniques (including “quantitative easing”) National remains wedded to a hands-off policy of allowing the “market” to determine the value of our dollar.
So while we are playing by purist, Market rules – other countries have thrown the rulebook away and doing whatever it takes to boost their economy and create jobs.
The “reward” for National’s obedience to dogma? Massive job losses,
Fears high dollar pushes some firms close to edge
Rakon blames job cuts on high dollar
High dollar blamed for job losses at wool plant
If ever a lesson was needed to illustrate the sheer futility of single-minded perseverance with a failed economic ideology, it is National’s committment to it’s hands-off policy on the New Zealand Dollar.
And yet, when it comes to “sexy” industries, National will climb over broken glass to throw tax-payer subsidies at the likes of “Lord of the Rings“, “The Hobbit“, Rugby World Cup, et al.
Whilst Key will crow about “3,000 people have been employed because of the Hobbit” (see: John Key pushes Hobbit benefit) – meanwhile 40,000 manufacturing jobs have been lost since this Government took office in 2008 (see: Loss of work hits hard).
If, by now you are feeling anxious and upset, don’t panic. It simply confirms you are still sane.
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= fs =
Johnny’s Report Card – National Standards Assessment – the social welfare safety net
To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.
The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.
Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc) in 2008 and four years in office to make good on it’s election promises..
.
Social welfare safety net
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The rhetoric:
It started well… National’s bad old image as a “bene-bashing Party, pandering to the ill-educated; the mis-informed; and the downright ignorant, appeared to be a thing of the past.
John Key was a product of a civilised society where social welfare could give kids from the most disadvantaged households a chance to better themselves.
“You can measure a society by how it looks after its most vunerable, once I was one of them. I will never turn my back on that.” – John Key, 28 November 2006
See: Speech to North Shore National Party luncheon
” I have said before that I believe in the welfare state and that I will never turn my back on it. We should be proud to be a country that looks after its most vulnerable citizens. We should be proud to be a country that supports people when they can’t find work, are ill, or aren’t able to work.
[…]
My father died when I was young. My mother was, for a time, on the Widow’s Benefit, and also worked as a cleaner. But the State ensured that I had a roof over my head and money for my mother to put food on the table. It also gave me the opportunity to have a good education. My mother made sure I took that opportunity, and the rest was up to me. ” – John Key, 30 Jan 2007
See: The Kiwi Way: A Fair Go For All
Key even seemed to “steal” policies from the centre-left Labour Party,
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Perhaps National, under Key’s leadership, had learnt from it’s mistakes in the 1990s?
No such luck.
The Reality:
As the Global Financial Crisis plunged most of world’s nations (China and Australia being the two lucky exceptions) into recession, the ranks of the unemployted swelled.
As Brian Gaynor, executive director of Milford Asset Management, wrote in the NZ Herald on 18 August 2012,
” At the end of May, the 34-country Organisation for Economic Co-operation and Development (OECD) had an unemployment rate of 7.9 per cent.
Nearly 48 million were out of work, 15 million more than when the financial crisis began in 2007.
The unemployment rate continues to rise in the eurozone and is now 11.1 per cent. “
See: Baby boomers clogging the job market
Here in New Zealand, unemployment skyrocketted from 78,000 in late 2007/early 2008, to the current 175,000 – over a doubling in only four years.
That’s 97,000 who had jobs prior to the Global Financial Crisis who are now out of work.
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See: tradingeconomics.com – Unemployment numbers
.
If it weren’t for the 114,200 who have migrated to Australia in the same four year period, soaking up thousands of potential jobless New Zealanders, one shudders at the unemployment rate we would now have (see related blogpost: Johnny’s Report Card – National Standards Assessment y/e 2012: migration ). Thank the mercies for our more affluent, and clever, neighbour.
It’s fairly obvious to all but the most entrenched, bene-bashing, Talkback Radio moron that New Zealand has not escaped the effects of the Global Financial Crisis.
National’s devotion to market-forces has caught Key, English, and Joyce in a trap of their own making. Their dogma dictates that the State “cannot create jobs” – only the Market can do that, as Key stated on several occassions,
“Nothing creates jobs and boosts incomes better than business growth. For New Zealand to build a more productive and competitive economy, we need more innovative companies out there selling their products on the world stage.” – John Key, 24 August 2012
See: Key Notes: Honouring our fallen soldiers
When the “Market” fails to behave as neo-liberal doctrine demands – then there is a problem. National cannot admit that it’s free market policies have failed. (It took the Russians seventy years to finally concede that their centralised market policy had failed them.)
For the National politburo, who cannot concede Market failure, there must be another reason why jobless numbers are increasing – not decreasing. It must be the fault of those on welfare. The unemployed must be to blame, as the Market is never, ever wrong.
Accordingly, from early-2011 onward, National began a concerted campaign against those receiving welfare assistance. It was a vicious, de-humanising, de-moralising campaign against those whose only “crime” was,
- having lost their jobs,
- had little access to training or apprenticeship,
- raising children on their own,
- were sick, injured, or disabled
From 2011, we started seeing headlines like these in our media,
Food parcel families made poor choices, says Key (17 Feb 2011)
Baby turns one, so get to work mum (6 June 2011)
Revealed: $100k-plus beneficiary homes (13 June 2011)
Single mum on DPB for decades (20 Sept 2011)
Minister spells out $43,000 ‘salary’ claim for solo mum (21.2.2012)
Beneficiary contraception plan ‘intrusive’ (8 May 2012)
Benefits may be linked to kids’ jabs (12 May 2012)
And if local bene-bashing stories weren’t sufficient to drive home the agenda of demonising this sector of society, National and it’s media corporate-whores could always rely on some excellent shock-value stories from overseas,
Man who fathered 30 kids says he needs a break – on child support (21 May 2012)
This next one was very popular at Federated Farmers – that well-known bastion of liberal sensibilities. The way that Bill English played his audience of cow-cockies and sheep-herders, with a barely-disguised smirk on his face, spoke volumes…
Drug tests for more beneficiaries mooted (28 June 2012)
Benefit cuts for drug users defended by PM (2 July 2012)
Said Paula Bennett,
“There’s two words we don’t use often enough in this country and that’s self-responsibility. The size of someone’s family is their business, so long as they don’t expect someone else to pay for it.”
So saith the woman who was on the DPB; had free taxpayer funded tertiary education; gave up her part-time job at the time because it was “too hard”; and had WINZ assistance to buy her own home…
Big families mean big welfare dollars (15 July 2012)
Bennett increases pursuit of welfare ‘rorts’ (23 July 2012)
Beneficiaries on warrants face cash cut (6 Sept 2012)
Kidnappers among targets in benefit plan (7 Sept 2012)
And to really, really make sure we’ve been paying attention to this Nazi-style demonisation propaganda,
Beneficiaries cost $130,000 over lifetime (12 Sept 2012)
And in case we missed it first time, Fairfax gave the political dagger-in-beneficiaries-backs another good, hard, twist,
Beneficiaries’ bill $78 billion (12 Sept 2012)
Though Bill English promised, hand-on-heart, that this was not an exercise in “bene bashing,
Benefit tally ‘not an excuse for hard line’ (13 Sept 2012)
Then the Nats came up with the idea of a law change of “one strike and you’re out” for welfare beneficiaries who turned down any “suitable” job offer from July 2013. Which would be laughable, because both Key and Bennett have conceded that there simply aren’t enough jobs for everyone.
So what would be the point of a “one strike and you’re out” for the unemployed, except to paint them as “work shy” and “lazy”?
Propaganda. Nasty stuff.
‘One strike’ rule for beneficiaries (18 Sept 2012)
Funny thing… the media never compared welfare beneficiaries entitlements with that of politicians. How many beneficiaries get free air-travel for the rest of their lives for themselves and their spouses? Or a gold-plated superannuation scheme none of us are entitled to?
Those were just some of the media stories and headlines that assaulted our sensibilities and attempted to paint the unemployed – the victims of the GFC – as “bene bludgers”.
All because National could not cope with the growing numbers of Kiwis losing their jobs, and had no plan to address growing unemployment.
So default to Setting ‘B’: Blame the Benes.
When Key stated that the most recent jobless stats – 7.3% unemployed – had “come as a bit of a surprise” (see: Unemployment surges to 13-year high ), he obviously had not been paying attention to yearly figures from New Zealand Statistics.
Jobless numbers had ‘only’ been rising since the beginning of 2012,
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Source: Trading Economics – Unemployment
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The scary headlines above were only partially offset by other media stories of New Zealand’s increasingly visible ‘underbelly’. Poverty was no longer staying behind closed doors, away from “polite society”,
Hungry kids scavenge pig slops (11 May 2012)
Welfare rejig carries whiff of hypocrisy (12 May 2012)
Stuck for ideas, Govt preys on powerless (13 May 2012)
The same hate-campaign was being conducted overseas,
Hatred of those on benefits is dangerously out of control (18 May 2012)
No food, no shoes and kids kept home (23 May 2012)
Government Policy Impacting Child Poverty Levels (30 May 2012)
And then we came to the attention of the United Nations. Quasi-nazism – not exactly the “cool look” we want for New Zealand and it’s tourism industry,
Struggling families borrow to buy food (21 July 2012)
UN urges Govt reforms to not target beneficiaries (2 Aug 2012)
Principal wants taxpayers to fund breakfast scheme (12 Aug 2012)
Ministry memo critical of plan to drug test beneficiaries (17 Aug 2012)
Govt has caused ‘incredible shift of wealth’ – CTU (24 Aug 2012)
Playing politics is not helping kids (26 Aug 2012)
Even multi-millionaire, Gareth Morgan, had to state the bloody obvious for those voters who were still less-than-fully-brain-functional,
Bennett accused of dehumanising beneficiaries (6 Sept 2012)
Precious little sense on Planet Paula (17 Sept 2012)
Belt tightening won’t reduce unemployment (23 Sept 2012)
Experts lament state of NZ child poverty (24 Sept 2012)
And when the Nats did try to address a social problem, the result would have been comical – had the issue of murdered children reminded us what was at stake,
Child-abuse funds ‘blown on hype’ (1 Dec 2012)
Social welfare – the stats:
From the Ministry of Social Development’s website;
.
Numbers of working-age clients1 receiving main benefits at the end of September, 2002 – 2012
.
|
End of quarter |
Unemployment Benefits 2 | Domestic Purposes Benefits 3 |
Sickness Benefits 4 |
Invalid’s Benefits | Other main benefits 5 | All main benefits |
| September 2002 |
112,147 |
109,078 |
37,275 |
64,596 |
21,613 |
344,709 |
| September 2003 |
94,527 |
109,366 |
40,802 |
68,361 |
19,366 |
332,422 |
| September 2004 |
65,764 |
109,021 |
44,110 |
4,067 |
17,624 |
308,158 |
| September 2005 |
50,153 |
105,692 |
46,067 |
73,813 |
16,440 |
292,165 |
| September 2006 |
41,027 |
100,579 |
47,527 |
75,988 |
17,026 |
282,147 |
| September 2007 |
23,158 |
96,673 |
48,995 |
78,268 |
16,140 |
263,234 |
| September 2008 |
23,273 |
98,473 |
48,208 |
83,618 |
16,036 |
269,608 |
| September 2009 |
60,660 |
107,658 |
56,384 |
85,015 |
17,094 |
326,811 |
| September 2010 |
65,281 |
112,765 |
58,661 |
85,305 |
16,200 |
338,212 |
| September 2011 |
55,661 |
114,147 |
58,651 |
84,524 |
15,513 |
328,496 |
| September 2012 |
50,390 |
110,738 |
59,595 |
83,570 |
16,649 |
320,942 |
Notes:
1 This report defines working-age clients as aged 18 – 64 years, to reflect the minimum age of entitlement of most benefits and the age of eligibility for New Zealand Superannuation.
2 Comprises Unemployment Benefits and Unemployment Benefits – Hardship.
3 Comprises Domestic Purposes Benefits – Sole Parent, Domestic Purposes Benefits – Care of Sick or Infirm, Domestic Purposes Benefits – Women Alone, and Emergency Maintenance Allowances.
4 Comprises Sickness Benefits and Sickness Benefits – Hardship.
5 Comprises Emergency Benefits, Independent Youth Benefits, Youth Payments, Young Parent Payments, Unemployment
Benefits – Training, Unemployment Benefits – Hardship – Training, Unemployment Benefits – Student Hardship, Widow’s Benefits, and (until April 2004) Transitional Retirement Benefits. Youth Payments and Young Parent Payments replaced Independent Youth Benefits from August 2012.
Source: MSD – September 2012
.
Graph shows the rise in the total number of people receiving a main benefit through to 1994, the further rise through to 1999, the steady decline to June 2008, and the rise through to June 2009 reflecting the recession and the international financial crisis. Numbers in receipt of the unemployment benefit follow a trend that is a rough mirror image of the employment rate. The rising red line, signifying Sickness/Invalid beneficiaries is linked to ACC discharging it’s clients onto welfare, to make their own books “look good”.
Source: Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011
.
Correlation between Global Financial Crisis, leading to NZ recession, leading to higher unemployment. (For the benefit of low-information National Party voters.)
Source: IBID
.
The above data yields three interesting observations;
#1 Beneficiary numbers mirror Global Financial Crisis
Unsurprisingly, the numbers receiving social welfare benefits shot up just after the Global Financial Crisis hit New Zealand’s economy, impacting on employment. The effects of the GFC continue to this day to create redundancies and unemployment throughout the country.
Low-information voters and the lunatic right-wing fringe element in our society maintain the fantasy that welfare is a “lifestyle choice”, where beneficiaries are attracted by “big money” paid out in benefits.
Not only are welfare payments usually abysmally low (just barely sufficient to survive on) – but the stats above clearly show the correlation between the GFC and rising beneficiary recipients.
There were 51,334 more people receiving welfare benefits in September 2012 than there were in September 2008. This increase can be sheeted home to,
- the Global Financial Crisis destroying jobs,
- National’s lack of proactive job creation policies helping to push up unemployed numbers,
- ACC’s policies with regards to to injured and sick (see below).
Such is the folly of relying on the “Market” to deliver jobs.
Such is the hypocrisy of Bennett, Key, English, Joyce, et al, who blame welfare beneficiaries for being out of work – and threatening them with all manner of sanctions.
#2 Overall beneficiaries are down
Surprisingly, those receiving welfare benefits up to September 2012 still number 23,767 fewer than September 2002. Overall beneficiary numbers are not increasing anywhere as much as what Paula Bennett, John Key, and their right wing fellow-travellers are insisting.
There are two possible reasons for this.
Firstly, 114,200 (net) New Zealanders left our shores for Australia from 2009 to 2012 (see previous blogpost: Johnny’s Report Card – National Standards Assessment y/e 2012: migration). Many left to find work overseas. These migrants might have added to unemployed and solo-parent welfare recipient numbers, had they stuck around here in New Zealand.
Secondly, see #3 below.
#3 Unemployment Benefits vs Household Labourforce Survey Unemployed
It is a ‘quirk’ of New Zealand’s welfare system that married or de facto couples cannot receive welfare assistance if one should loose his/her job, but the other remains in paid work.
On the other hand, two people not in a relationship (eg; flatting in the same house), are eligible for welfare should one become unemployed and the other remains in-work.
There seems no logic to this contradictory situation and is even more unfair when one considers that the married/de facto couple both paid taxes, prior to one losing his/her job. That’s New Zealand’s bizarre welfare rules for you.
Which may explain why those receiving Unemployment Benefits from WINZ numbered 50,390 in September 2012 – whilst the Household Labour Force Survey (HLFS) recorded 175,000 unemployed people (see: Household Labour Force Survey: September 2012 quarter).
WINZ records only those paid an Unemployment Benefit.
The HLFS records everyone, within a more inclusive criteria, irrespective of whether they receive a benefit or not.
Addendum 1:
Interestingly, the figures above for Invalid and Sickness Beneficiaries rose significantly from 2009. This ties in with a NZ Herald report, dated 23 June 2012,
.
The proportion of long-term ACC clients moving on to benefits has surged since the corporation adopted a tough new stance, which has fuelled allegations that they are being forced off compensation before they are rehabilitated.
Figures supplied by the corporation yesterday also show it has slashed the number of long-term claimants on its books by a quarter since mid-2009.
[…]
But yesterday’s figures show that the proportion of long-term claimants leaving ACC and going on to health-related, unemployment or domestic purposes benefits rose sharply from early 2009.
In the five years to 2008, the proportion going on to benefits was 12.1 per cent, but during 2009 that rose to 16.4. In the first five months of 2010, the most recent data held by ACC, the proportion rose to 19.4 per cent.
ACC figures also showed the corporation had reduced the number of long-term claimants on its books by 3644 or 25 per cent to 10773 in the three years since June 2009. That reduction is well ahead of ACC’s targets.
See: More ACC clients going on to welfare
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Throughout all these events which are beyond the influence and control of the unemployed, solo-parents, widows, invalids, sick, etc, National’s demonisation of those on welfare has been a shocking indictment of John Key’s leadership.
What is it in the mental make-up of politicians like Paula Bennett, John Key, Steven Joyce, and Bill English, that treating those who have lost their jobs, or looking after children, as “bludgers” is morally acceptable?
Especially when they must have access to precisely the same information that I, as a blogger, have.
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Addendum 2:
National’s response to unemployment is the introduction of “reforms” to social welfare legislation,
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Social Development Minister Paula Bennett yesterday introduced the second round of reform legislation.
The Social Security (Benefit Categories and Work Focus) Amendment Bill replaces the current benefits with three new categories: Jobseeker Support, Sole Parent Support and the Supported Living Payment.
It also includes provisions allowing payments to be cut if beneficiaries fail a drug test, have an outstanding arrest warrant, or if parents who do not meet “social obligations” for getting their children into health and education programmes.
See: Bennett expects welfare reform to save $1.6b
.
As Bennett admitted on TVNZ’s Q+A, on 29 April 2012,
“There’s not a job for everyone that would want one right now, or else we wouldn’t have the unemployment figures that we do. “
See: TVNZ Q+A: Transcript of Paula Bennett interview
The question that begs to be asked: how many new jobs will this create?
Addendum 3:
So what did happen to National Food In Schools programme, that it launched with such fanfare in February 2007?
Not surprisingly, Key’s attitude seems to have gone through a Reverse Road to Damascus Experience,
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But then, going from Opposition to Government will do that to politicians.
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= fs =
Johnny’s Report Card – National Standards Assessment y/e 2012: migration
To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.
The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.
Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc) in 2008 and four years in office to make good on it’s election promises..
.
Migration
.
The rhetoric:
.
.
One of National’s biggest election issues was that of migration. Key and his mates practically crucified the incumbent Labour government in 2008 over the continuing loss of New Zealanders to Australia.
Even one of their election hoardings (see above) made the migration issue a prominent feature of National’s attack-advertising.
And Key poured it on in thick layers of election rhetoric,
“When the going gets this tough, is it any wonder that Kiwis look longingly at our Aussie cousins? Our Aussie cousins, who get paid a third more than us for doing the same job. Our Aussie cousins, who have been given a tax cut in every Budget for the past five years and who will continue to have their taxes cut for Budgets to come.
Too many Kiwis are looking at those stats and choosing to join their cousins across the ditch. We have to give them better reasons to stay .” – John Key, 29 January 2008
See: 2008: A Fresh Start for New Zealand
“We want to make New Zealand an attractive place for our children and grandchildren to live – including those who are currently living in Australia, the UK, or elsewhere. To stem that flow so we must ensure Kiwis can receive competitive after-tax wages in New Zealand.” – John Key, 6 September 2008
See: Environment Policy Launch
“Over the last three years I believe we’ve made some progress, so much that we have been closing that after-tax wage gap, we are building an economy that is now growing at a faster rate than Australia, but it will take us some time to turn that around.” – John Key, 23 November 2011
See: Kiwi exodus to Australia nears record levels
In effect, National – led by our Smile & Wave Dear Leader – was promising New Zealand voters that they, alone, knew the secret to stemming emigration and the loss of New Zealanders to Australia and beyond. It was a bold committment to make to the electorate.
Short of erecting a new Berlin-style wall; with armed guards; and patrolling gunboats to detain Kiwi boatpeople attempting to flee to Australia, how could National perform such a feat?
The reality:
Despite National’s rhetoric and attacks on Labour, their own track record in persuading New Zealanders to remain here and not leave for greener (or browner, in Australia) pastures was utterly abysmal.
In fact,quite the contrary, Statistics NZ revealed that the Great Escape to Oz has accelerated,
.
|
Permanent and Long Term (PLT ) Net Migration of NZ Citizens/Residents To/From Australia |
|||
| Year to November | Departures | Arrivals | Net Loss/Gain(linked to source) |
|
2005 |
34,730 |
13,430 |
|
|
2006 |
33,873 |
13,371 |
|
|
2007 |
40,786 |
13,621 |
|
|
2008 |
48,500 |
13,200 |
|
|
Sub-Total |
157,889 |
53,622 |
– 104,267 |
|
2009 |
34,100 |
14,600 |
|
|
2010 |
35,800 |
15,800 |
|
|
2011 |
50,100 |
14,400 |
|
|
2012 |
53,500 |
14,600 |
|
|
Sub-Total |
173,500 |
59,400 | – 114,200 |
Sources: Statistics NZ International Travel and Migration – information releases
.
After four years of National, net migration to Australia (excluding other countries such as the UK, etc) has increased by ten thousand people more than under Labour.
To be fair, migration involves factors that are often beyond the control of governments from either end of the political spectrums.
The true issue here is not whether Labour or National or Uncle Tom Cobbly can stem migration. The real issue here is that National cynically exploited migration for purely selfish, political ends. They manipulated the public debate and exploited people’s concerns.
This is why the public view politicians with such odium and distrust.
Little surprise then, that politicians consistantly rank at the bottom of ‘Reader’s Digest ‘ list of respected professions, usually below Used Car Salespeople and just above tele-marketers. See previous blogpost: League Tables that really count! )
Another issue here is that despite National’s right-wing reforms, tax cuts, and partial-asset sales/share floats – New Zealanders are continuing to vote with their feet. An increasing number of families and young people are departing our shores in a vote of no-confidence in John Key and his administration.
It also suggests that the neo-liberal concept of the atomisation of “society” – replaced by the Individual and families – has reached it’s inevitable consequence. If all that matters is the Individual and their own needs, then concepts such as national identity and cultural heritage are hopelessly out-dated concepts. In which case, people will simply follow the money and nothing else matters.
If we are ever to attract New Zealanders back to our country, and to persuade those already here that it is worthwhile being part of this society, then we have to move away from raw Individualism and self-interest. To encourage people to be a part of a society, that society has to be vibrant, strong, and offer more than just cash incentives.
This is why National will never be able to reverse the outward flow of people and loss of talent overseas; the Nats are part of the neo-liberal paradigm for whom society will always take a back seat to the rights and primacy of the Individual. Key and his mob will always be trapped by their own neo-liberal dogma, and can offer us nothing except much hand-wringing; more excuses; and well-worn election rhetoric.
The last word goes to this chap, who no doubt sums up the feelings of many New Zealanders who have departed our shores,
A Victorian-based Kiwi with a student loan debt, who did not want to be named because he did not want to be found by the Government, said he did not intend to pay back any of his student loan.
The 37-year-old’s loan was about $18,000 when he left New Zealand in 1997. He expected it was now in the order of $50,000. The man was not worried about being caught as the Government did not have his details and he did not want to return to New Zealand.
“I would never live there anyway, I feel just like my whole generation were basically sold down the river by the government. I don’t feel connected at all, I don’t even care if the All Blacks win.
“I just realised it was futile living [in New Zealand] trying to pay student loans and not having any life, so I left. My missus had a student loan and she had quite a good degree and she had paid 99c off the principal of her loan after working three years.”
See: Student loan avoiders told to pay up
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= fs =
Johnny’s Report Card – National Standards Assessment y/e 2012 – incomes
To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.
The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.
Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc) in 2008 and four years in office to make good on it’s election promises.
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Incomes
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The rhetoric: (and gawd almighty, there was plenty of it…)
“We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.” – John Key, 29 January 2008
See: National policy – SPEECH: 2008: A Fresh Start for New Zealand
“One of National’s key goals, should we lead the next Government, will be to stem the flow of New Zealanders choosing to live and work overseas. We want to make New Zealand an attractive place for our children and grandchildren to live – including those who are currently living in Australia, the UK, or elsewhere.
To stem that flow so we must ensure Kiwis can receive competitive after-tax wages in New Zealand.” – John Key, 6 September 2008
See: National policy – Speech: Environment Policy Launch
“I don’t want our talented young people leaving permanently for Australia, the US, Europe, or Asia, because they feel they have to go overseas to better themselves.” – John Key, 15 July 2009
See: Speech: Key – business breakfast
“Science and innovation are important. They’re one of the keys to growing our economy, raising wages, and providing the world-class public services that Kiwi families need.” – John Key, 12 March 2010
See: National policy – Boosting Science and Innovation
“We will also continue our work to increase the incomes New Zealanders earn. That is a fundamental objective of our plan to build a stronger economy.” – John Key, 8 February 2011
See: Statement to Parliament 2011
“The driving goal of my Government is to build a more competitive and internationally-focused economy with less debt, more jobs and higher incomes.” – John Key, 21 December 2011
See: Parliament – Speech from the Throne
“We want to increase the level of earnings and the level of incomes of the average New Zealander and we think we have a quality product with which we can do that.” – John Key, 19 April 2012
Key was practically out-doing Labour in championing the cause of the Working Man & Woman getting better wages. The spirits of Jim Knox, Norman Kirk, et al, would have been dancing a happy-jig in approval at Dear Leader’s statements.
The reality:
The reality was 180 degrees polar opposite to Key’s wage-raising statements. But National’s actions were not just opposed to raising wages – their policies were designed specifically to lower wages; undermine working conditions; and attract corporate interest. Finance Minister even admitted as such when he let slip on TVNZ’s Q+A, in April 2011,
BILL Well, it’s a way of competing, isn’t it? I mean, if we want to grow this economy, we need the capital – more capital per worker – and we’re competing for people as well.
GUYON So it’s part of our strategy to have wages 30% below Australia?
BILL Well, they are, and we need to get on with competing for Australia. So if you take an area like tourism, we are competing with Australia. We’re trying to get Australians here instead of spending their tourist dollar in Australia.
GUYON But is it a good thing?
BILL Well, it is a good thing if we can attract the capital, and the fact is Australians- Australian companies should be looking at bringing activities to New Zealand because we are so much more competitive than most of the Australian economy.
GUYON So let’s get this straight – it’s a good thing for New Zealand that our wages are 30% below Australia?
BILL No, it’s not a good thing, but it is a fact. We want to close that gap up, and one way to close that gap up is to compete, just like our sports teams are doing. This weekend we’ve had rugby league, netball, basketball teams, and rugby teams out there competing with Australia. That’s lifting the standard. They’re closing up the gap.
GUYON But you said it was an advantage, Minister.
BILL Well, at the moment, if I go to Australia and talk to Australians, I want to put to them a positive case for investment in New Zealand, because while we are saving more, we’re not saving more fast enough to get the capital that we need to close the gap with Australia. So Australia already has 40 billion of investment in New Zealand. If we could attract more Australian companies, activities here, that would help us create the jobs and lift incomes. ”
See: TVNZ Q+A: Guyon Espiner interviews Bill English – transcript
English initially admitted that ” it is a good thing ” if wages are lower, to ” attract the capital ” – and then, realising his faux pas, goes on to correct himself in his next response to Espiner. But the truth is out; National sees lower wages as a means by which to attract corporate investment from overseas. Especially in competing with Australia.
Then he attempts to extricate himself from the hole he has dug by likening our cheaper wages as competitiveness similar to sporting games, ” rugby league, netball, basketball teams, and rugby teams out there competing with Australia “.
(If this sounds like sheer lunacy, you are [1] Sane and [2] Not a National voter.)
English’s slip of the tongue is backed up by National’s on-going campaign against workers in this country.
As detailed in an earlier blogpost (see: John Key’s track record on raising wages), practically every aspect of National’s policies; law changes; and other actions have been deliberately designed to reduce wages and conditions.
The following are excerpts from that earlier blogpost. (For full details, simply click on the heading-links.)
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.
The “Hobbit Law” took precisely two days from First Reading to Royal Assent. An Olympic record in law-making. (See: Employment Relations (Film Production Work) Amendment Act 2010 – Legislative history)
The law change made film industry workers independent contractors by default – thereby changing the definition in employment legislation of what constitutes an “employee”.
In effect, for the first time in our democracy, a government has legislated away a workers right to determine their own employment status. They no longer have any choice in the matter.
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2. The 90 Day Employment Trial Period
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An amendment to the Employment Relations Act 2000, Section 67A, allowed employers to sack – without just cause or a chance for an employee to improve performance – within a 90 day period.
It gives unbalanced power to employers who can blackmail an employee or get rid of them at the slightest whim.
It also makes workers less willing to be mobile in the workplace. Why change jobs at the risk of being fired within 90 days of taking up a new position?
When the 90 Day Trial period was first introduced in March 2009, it applied only to companies employing 19 staff or less.
See: Will the 90 Day trial period make a difference?
By April 2011, this was extended to all companies regardless of staff numbers.
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.
Putting aside from the myth of POAL maritime workers earning $90,000 – so what?
Even if it were true (which is doubtful) – POAL has never released the workings of how they arrived at that sum, despite requests), isn’t such a good wage precisely what Dear Leader was advocating in his quotes above?
POAL management sought to reduce costs; casualise their workforce; and compete with Ports of Tauranga for shipping business. Unfortunately, competing on costs would, by necessity, involve driving down wages.
Rather than supporting the workers, Dear Leader bought into a situation where international shipping companies were playing New Zealand ports off against each other, to gain the lowest possible port-charges. Even local company, Fonterra, was playing the game.
Here we have a situation where New Zealand workers were enjoying high wages – something John Key insists he supports – and yet he was effectively allowing international corporations to create circumstances where those wages could eventually be cut and driven down.
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.
On 28 May 2012, Dear Leader explained why rest home workers weren’t getting an increase in pay on his watch,
“It’s one of those things we’d love to do if we had the cash. As the country moves back to surplus it’s one of the areas we can look at but I think most people would accept this isn’t the time we have lots of extra cash”.”
See: PM: No money for aged care workers
Seven months later, Key and his fellow Ministers and MPs were given a pay rise of 1.9% by the Remuneration Authority. Key himself pockets $3,895 in backpay, and an extra $150 per week payrise.
“This isn’t the time we have lots of extra cash,” eh?
See: Christmas rise gives PM $3900 backpay, $150 more a week
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From 2004 to 2008, the minimum wage rose from $9 to $12 – an increase of $3 in four years.
From 2009 to 2012, the minimum wage rose from $12 to $13.50 – an increase of $1.50 over three years.
See: Dept of Labour – Previous minimum wage rates
Last year, Labour, the Greens, NZ First, and Mana campaigned to raise the minimum wage to $15 ($16 for Mana).
When a worker at a fast-food outlet asked John Key to raise the minimum wage to $15 an hour, he rejected the proposal, saying,
“It will go up, but it won’t go up straight away.”
See: Raising minimum wage won’t cost jobs – Treasury
Yet it took only a couple of years to implement two massive taxcuts that gave hundreds, thousands, of dollars a week, to the top income earners.
Priorities, eh?
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On 9 October, Labour Minister Kate Wilkinson announced that National intended to introduce a new Youth Rate, to take effect in April, next year. The rate would be set at $10.80 an hour – compared to the minimum rate of $13.50 an hour currently, and would include 16 to 19 year olds.
As Scoop.co.nz reported,
“That equates to $10.80 an hour, or $432 before tax for a 40-hour week. From April next year, the ‘Starting Out Wage’ will apply to 16- and 17-year-olds in the first six months of a job, to 18- and 19-year-olds entering the workforce after spending more than six months on a benefit, or 16 to 19-year-olds in a recognised industry training course.”
See: NZ teens face $10.80 an hour youth wage rate
It is doubtful if National’s Youth Rate will actually create new jobs. More likely, a drop in youth wages will simply create more ‘churn’ in employment/unemployment numbers.
As David Lowe, Employment Services Manager for the Employers and Manufacturers Association, inadvertently revealed,
“Without an incentive an employer with a choice between an experienced worker and an inexperienced worker will choose experience every time.”
See: Starting-out wage will help young people onto job ladder
So there’s no new job for the younger worker – s/he is merely displacing an older worker. Which probably results in older workers joining the migration to Australia.
End result; a loss of skill and experience for New Zealand, and a gain for our Aussie cuzzies.
Nice one, Mr Key. Remind us when you took on the role of staff recruiter for Australia?
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One of the most far-reaching aspects of National’s covert agenda to make the country’s workforce “more flexible” (translation; more exploitable) is their stated intention to remove Part 6A of the Employment Relations Act (ERA), which continues (or transfers under similar conditions and pay) the employment of low-paid employees such as caretakers, cleaners, catering workers, hospital orderlies and laundry workers, after a business is restructured or sold.
See: Part 6A – Continuity of employment if employees’ work affected by restructuring
Part 6A gives vulnerable, low-paid workers, the right to keep their jobs on the same terms of employment when transferred to the new contractor.
See: Labour law changes announced
Labour Minister Kate Wilkinson has assured the public that this law-change will apply only to small and medium-sized businesses with less than 20 employees.
Pardon me? Didn’t they say the same thing for the 90 Day Trial Period law? Oh yes, I believe they did,
“Trial employment periods for up to 90 days for workplaces with fewer than 20 employees will be available from April 2009.” – Kate Wilkinson, 11 December 2008
See: National policy – 90-day trial period to provide job opportunities
Once National’s so-called “reforms” were bedded in, they changed it, implementing the real policy they had wanted all along,
“The 90-day trial period is to be extended to enable all employers and new employees to have the chance to benefit from it.” – Kate Wilkinson, 18 July 2010
Once Part 6A is removed from the lawbooks, the lowest-paid workers in our communities will be vulnerable. A new employer will be able to re-write their contracts at whim; reduce their pay; change their conditions, or dismiss them altogether. There are many such small business and the impact on their workers could be severe.
Green Party industrial-relations spokeswoman, Denise Roche, was 100% on-the nose when she described these – and other “reforms” as,
“This decision is straight from the Bill Birch era of industrial relations.”
This is indeed a return to the Employment Contracts Act – by stealth. National is too gutless to face the country by honestly presenting a manifesto returning to the ECA.
Remind us, Mr Prime Minister, how scrapping Part 6A will raise wages, as per your promises?
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8. An End to Collective Agreements
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National’s covert agenda to resurrect the Employment Contract’s Act involves the following,
- The Employment Relations Authority can declare in certain circumstances that collective bargaining has ended.
- A duty of good faith does not require the parties to conclude a collective agreement.
- Employers can opt out of multi-employer bargaining.
- Partial pay reductions in cases of partial strike action.
- Removing the 30-day rule that forces non-union members to take union terms and conditions.
Items 1, 2, and 3 have only one purpose; to ensure that an employer can walk away from the negotiating table; scrap any collective agreement; and re-hire workers on individual contracts.
It is solely designed to destroy unions once and for all.
Had Items 1, 2, and 3 been in force this year, POAL (Ports of Auckland Ltd) would have been able to abandon the bargaining table after a mock “negotiation”; locked out any worker on strike; and issued take-it-or-leave-it individual contracts.
The worker’s negotiating agent, the Maritime Union, would have been dis-empowered and destroyed.
Only the current provisions of good-faith bargaining in the Employment Relations Act 2000 and the Employment Relations Authority were able to stop POAL from unilaterally walking away from the negotiating table. (On 27 March this year, the Employment Court issued a judgement severely admonishing POAL for their actions, and ordering them to return to negotiations.)
This may satisfy free market fanatics, but it does nothing to fulfill Dear Leader’s pledges to raise wages, or create new jobs.
As usual, Key promises one thing whilst his Ministers work quietly in the background to achieve the polar-opposite.
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Thus far we have seen no concrete indications that John Key is implementing his promises in 2008, 2009, 2010, 2011, and this year, to raise wages.
Instead, Key and his cronies in National have been studiously implementing law-changes that will inevitably result in the opposite; a dismantling of hard-won working conditions; an undermining of worker-representation in negotiations, and an eventual lowering of wages .
The only conclusion that can be made is that Key has wilfully deceived voters. His public statements advocated raising wages whilst in back-rooms, he and National Party ministers have been contriving to achieve a diametrically opposite agenda.
It serves National’s undisclosed agenda to lower wages, to attract international ‘investment’, and to allow corporations to increase profits on the backs of low-paid workers.
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10. A New Government’s Response
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Once in power, a Labour-Greens-NZ First-Mana Coalition must act decisively to undo and repeal every single one of National’s “reforms”.
Not one strand of their repugnant legislation must be allowed to stand – not one.
Incomes – 2000 – 2012 – The Stats
| Wage Growth – 2000-2012Year (June-June) % increase/decrease | |
|
2000 |
1.3% |
|
2001 |
1.8% |
|
2002 |
2.1% |
|
2003 |
2.3% |
|
2004 |
2.2% |
|
2005 |
2.7% |
|
2006 |
3.2% |
|
2007 |
3.2% |
|
2008 |
3.5% |
|
2009 |
2.8% |
|
2010 |
1.6% |
|
2011 |
1.9% |
|
2012 |
2.0% |
Source: Statistics New Zealand: Labour Cost Index (Salary and Wage Rates): June (Annualised) quarters
As the stats above show, National has some way to go before wage increases match those under the previous Labour government.
However, nothing that National has done thus far, in the last four years, will go anywhere near raising wages for ordinary workers.
Instead, the expectation is that a minority of sought-after skilled tradespeople, professionals, and technicians will enjoy moderate increases, whilst the rest of the country either stagnates or goes backward.
So sayeth “Market Forces” under National.
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= fs =
Johnny’s Report Card – National Standards Assessment – Growth
To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.
The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.
Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc) in 2008 and four years in office to make good on it’s election promises.
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Growth
.
Recent history:
In the past, whenever National (or the right wing “Labour-ACT” government of the 1980s) came to power, the result was never very good,
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Source: Dunedin Star
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Source: Otago Daily Times
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Source: Otago Daily Times
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Source: Otago Daily Times
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The rhetoric:
“The National Party has an economic plan that will build the foundations for a better future.
* We will focus on lifting medium-term economic performance and managing taxpayers’ money effectively.
* We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.
* We will cut taxes, not just in election year, but in a regular programme of ongoing tax cuts.
* We will invest in the infrastructure this country needs for productivity growth.
* We will be more careful with how we spend the cash in the public purse, monitoring not just the quantity but also the quality of government spending.
* We will concentrate on equipping young New Zealanders with the education they need for a 21st century global economy.
* We will reduce the burden of compliance and bureaucracy, and we will say goodbye to the blind ideology that locks the private sector out of too many parts of our economy.
And we will do all of this while improving the public services that Kiwis have a right to expect. ” – John Key, 29 July 2008
See: 2008: A Fresh Start for New Zealand
” Growing the economy is the Government’s number one priority, and science and innovation have a key part to play in that growth.
Indeed, this Government has made science and innovation one of the six cornerstones of its economic growth agenda. We’ve done this because New Zealand needs an economic jolt. Our productivity and economic growth have been sluggish for decades and as a result we have slipped down the OECD’s ranking of national wealth per capita.
Our performance compared to other smaller advanced economies has been uninspiring at best. For example, in 1976 our per capita income was slightly ahead of Australia. It was nearly 20 percent greater than the OECD average.
We are now 20 percent behind the OECD average. Australia, by contrast, is still about 20 percent ahead.
Finland is another example of our relative decline. In 1979 our per capita income lines crossed – New Zealand going down and Finland going up. The Finns are now about 20 percent ahead of us.
So, how do we turn the situation around? ” – John Key, 1 July 2011
See: National Economic Development Forum
Present reality:
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.
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Two things would be fair to say,
- National inherited an economy with low unemployment and net government debt at an all time low of 5.6% of New Zealand’s GDP, net. (Far from being fiscally profligate as National claims, Labour actually behaved more responsibly than National has done, as the information below clearly illustrates.)
- The Global Financial Crisis was not an event of National’s making. (Though the ideology of corporate greed, profiteering, and minimal government oversight which contributed to the Crisis is most certainly one that National shares.)
As Treasury data shows, New Zealand’s net government debt situation worsened from 2008 to June of 2012,
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Source: Treasury – Financial Statemement of the Government of New Zealand
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Source: IBID
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Table 16 above opened with a net government debt of 5.6% – left by the outgoing Labour government.
It closed with 25% net government debt – a fourfold increase – courtesy of National’s “prudent fiscal management”.
As the Treasury document explained,
Net debt increases as a result of cash deficits and
declines as a result of cash surpluses. It also
fluctuates in line with valuation movements in the
underlying financial assets and liabilities of the Crown
and movements in the amounts of currency issued to
New Zealand banks.Net debt increased this year, continuing the steady
increase since the global financial crisis (figure 11).
Net debt increased from last year primarily due to
additional borrowings over the year to meet the
residual cash deficit (refer table 17).
Source: IBID
In other words, National took in lower revenue – taxes – which inevitably resulted in increased borrowings; slashing of State services and funding; increasing user pays for other state services; mass redundancies of state sector workers, and impending partial state asset sales.
The Treasury document goes on to show how much revenue was lost between 2008 and 2012,
.
Source: IBID
.
A recent NZ Herald report has updated Treasury’s expections. The tax-take, GDP growth, and unemployment outlooks are not good,
A weaker economic outlook over the next four years has taken a bite of nearly $8 billion out of the Government’s forecast tax revenues for that period.
Nevertheless the Treasury is still forecasting a return to surplus, though only just, on schedule by 2015.
The forecasts in yesterday’s half-year economic and fiscal update are in line with the latest consensus forecasts, which means they are significantly weaker than in the Budget.
The growth track is lower by around 0.5 percentage points a year.
It reflects downwards revisions to expected growth among New Zealand’s trading partners, and a kiwi dollar expected to remain around present levels until the first half of 2014, so that net exports subtract from growth for the next couple of years.
Unemployment has been revised higher; it is 7.3 per cent now and still expected to be 5.6 per cent by March 2016.
See: Outlook slashes tax-take by $8b
The forecast rate of tepid growth is on top of low to negative growth in the last four years,
.
Source: tradingeconomics.com
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So what caused the drop in government tax revenue? And why did the lower tax revenue impact on higher unemployment and lower domestic growth?
The answer, in part, is not hard to uncover, and the following reports tell the story of how National undermined (sabotaged?) our nation’s government accounts.
First, we were offered The Bribe,
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Then we got the warning signs,
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We were not exempt from the looming storm that was the coming Global Financial Crisis ,
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National’s response?
The prudent step to take would have been to cancel the tax cuts as simply unaffordable. (Labour’s Phil Goff generously promised to support National had it taken such a prudent measure. See: Labour would support deferral of tax cuts)
As a nation, we would then maintain social services (education, housing, healthcare, justice system, early childhood education, superannuation, etc) – or cut taxes. We could not have both. Not without even further massive borrowings from overseas.
National’s decision to persevere with their taxcuts beggered belief for those who understood the seriousness of the GFC and the recession we had fallen into,
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The consequences of National’s irresponsible cutting of taxation revenue was utterly predictable,
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Writing for the NZ Herald, Brian Fallow put the cost of taxcuts at $8 billion. (See: Outlook slashes tax-take by $8b)
Only a fool (or devoted National supporter – the two are not mutually exclusive) could believe that we could give away billions in tax cuts without resorting to massive borrowings to cover the shortfall.
The result was a government deficit rising fourfold from 2008 to 2012, as the above Treasury stats clearly show.
National then desperately needed to balance the books. It scrimped and scrapped by cutting the state sector; raising taxes (gst, fuel tax, ACC levies, government charges, etc) elsewhere; closing tax exemptions for property investors; and cutting back on services (see: Student allowances a thing of the past for post-graduate students ).
Even paper delivery kids were not exempt from the grasp of this Scrooge-like ‘government’. See: Budget 2012: ‘Paper boy tax’ on small earnings stuns Labour)
It also desperately needed to proceed with it’s state asset sales.
A cynic with a conspiratorial ‘bent’ might suspect that National deliberately manufactured it’s own debt crisis so that it could justify the partial privatisation of Meridian, Genesis, Might River Power, Solid Energy, and Air New Zealand, to it’s corporate/investor/aspirationist constituent-base.
In doing so, not only was the door left open for their privatisation agenda – but the side-effects of tax cuts left National with few options and manouvering room for job creation policies.
With net government debt quadrupling in four years from $10.2 billion (2008) to $50.6 billion (2012), and taxation revenue falling from $56.7 billion (2008) to $55 billion (2012), their hands were seemingly “tied”.
Compounding matters, National cut back state services and fired thousands of state sector workers, resulting in a further drop in expenditure, all of which impacted harshly on the economy.
Whether Free Marketeers like it or not, the state is the #1 business generator in our economy and society. When it cuts spending, the flow-on effects on other, down-stream businesses, is inescapable.
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With higher income earners either saving their tax cuts or paying down debt, tax cuts failed to “fire” the economy as Little Leader said in 2009 and Dear Leader adamantly predicted in 2010,
“By taking firm, early and decisive action, the Government is managing the downturn to cushion the immediate impact on New Zealanders and to enhance future growth.” – Bill English, 28 May 2009
See: Budget 2009 – House goes into urgency
“We’ve cut all personal income tax rates, GST has increased to 15%, and we’ve boosted NZ Super, Working For Families, and benefit payments by 2.02% to compensate for the rise in GST.
Today’s changes are just one part of our comprehensive plan to grow the economy, create jobs, boost incomes, and raise living standards for all New Zealanders. The tax package improves incentives to work, and tilts the economy towards savings, investment, and exports.” – John Key, 1 Oct 2010
See: Tax cuts today
In May 2010, Key had even used the migration issue as justification to cut taxes for higher income earners, professionals, and others in top brackets,
“We can be envious about these things but without those people in our economy all the rest of us will either have less people paying tax or fundamentally less services that they provide.
They include doctors, entrepreneurs often, scientists, engineers, lawyers, accountants, school principals and nurses.
On Thursday you will see a deliberate attempt to make sure those people stay and put their skills to work here in our economy.” – John Key, 18 May 2010
See: Key again defends tax cuts
BS. All of it is, BS.
None of it worked, of course. The economy not only failed to grow – it stagnated or contracted (see: Economic recovery stagnates – NZIER). And despite two tax cuts, migration to Australia skyrocketed – ten thousand higher than under the previous Labour government’s last four years. (see related blogpost: Johnny’s Report Card – National Standards Assessment y/e 2012: migration)
Up until 2011, two of our most important industries – manufacturing and construction – contracted, at a time when the Christchurch re-build should have been growing their turn-over and profitability. The downturn in manufacturing and construction had a flow-on effect on the Wholesale Trade sector,
.
Source: New Zealand in Profile: 2012 – Economy
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Other measures of the economy show no sign of improvement,
Bank profits back over $3 billion while economy stagnates (24 April 2012)
then “good news”,
Pickup in economic growth predicted (29 Aug 2012)
followed two months later by bad news,
Businesses gloomy about economic growth (9 Oct 2012)
Current Account Deficit Widens (19 Sept 2012)
Trade deficit widens as dairy values fall (27 Nov 2012)
Terms of trade continue to drop (4 Dec 2012)
Govt deficit up as tax take dips (5 Dec 2012)
Deficit $169m wider than predictions (6 Dec 2012)
Growth forecast cut, debt seen higher (18 Dec 2012)
Current account gap narrows as trade balance shrinks (19 Dec 2012)
Outlook slashes tax-take by $8b (19 Dec2012)
Whichever way one looks at it, it’s a mess.
And it’s simply a bad joke for Key to reassure us,
“While I think we have to acknowledge that the last three years have been pretty tough with the Global Financial Crisis, on a relative basisNew Zealand’s been doing a better than a lot of other countries.” – John Key, 17 Nov 2011
See: Key and Goff Q&A: Creating jobs
Trying to suggest that we are nowhere as bad off as other nations such as the US, Spain, Greece, etc – so our current stagnating economy is somehow acceptable – is sheer rubbish.
One might as well justify National’s poor performance and reckless decision-making by stating we are better off than Zimbabwe, Haiti, or Bangladesh,
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We should not be “worse off” than those nations – we headed into the Global Financial Crisis with relatively good economic indicators!
There is Always An Alternative!
A responsible government would have abandoned any prospect of taxcuts and prepared policies to keep people in work; off the unemployment queues; paying taxes; and contributing to the economy.
Policies such as,
- Government procurement favouring local providers over imports from other nations. This would have kept companies such as Kiwirail from closing their Dunedin Hillside workshops, with the loss of over 150 jobs (see: Dunedin workshop sale will see job losses – Kiwirail)
- Government intervention in the value of the New Zealand dollar. The high dollar has destroyed some 40,000 manufacturing/exporting jobs in this country – swelling the ranks of the unemployed to 175,000 (see: Unemployment up to 7.3pc – a 13 year high, Job losses blamed on high NZ dollar: more forecast, Rakon a victim of high dollar – union, etc). Other OECD nations have thrown away the mopnetarist rule book and engaged in quantitative easing to preserve their manufacturing base. The choice is either that – or losing more jobs and increasing expenditure on unproductive social welfare.
- Government implementating a mass construction programme of 10,000 new state houses. (see previous blogpost: Can we do it? Bloody oath we can!)
With Option #3, National appears to have missed the obvious.
Injecting several billion into a crash-programme to build ten thousand homes for New Zealanders, who are currently struggling to buy their own houses, makes sense.
The Christchurch re-build has proven this to be the case, as the NZ Herald reported on 20 December 2012,
The economy grew at an annual pace of 2.5 per cent, and was 2 per cent higher than the same quarter a year earlier. Revisions to previous quarters showed New Zealand dipped back into recession in the second half of 2010, with two 0.3 per cent contractions in each quarter.
The New Zealand dollar dropped to 83.33 US cents after the figures were released, from 83.60 cents immediately before.Construction kept the economy ticking over with a 4.5 per cent expansion, contributing 0.2 of percentage point to overall GDP. Electricity, gas, water and waste services grew 4.4 per cent in the quarter, contributing 0.1 of a percentage point in growth to GDP, underpinned by an increase in hydroelectric generation.
“Residential and non-residential building activities were both up strongly this quarter, and both were boosted by Canterbury,” Statistics NZ said in its report. “The upper North Island also contributed to the growth in residential building activity.”
The Canterbury rebuild, which is expected to top $30 billion, is widely seen as the saving grace for an economy that has struggled to recover from its deepest recession in two decades, and has been getting some help from a resurgent property market in Auckland in recent months.
See: Economy grows 0.2pc – saved by construction
Statistics NZ national accounts manager Rachael Milicich didn’t split hairs. She bluntly stated,
“The growth in the latest quarter was driven by construction.”
See: Economic activity up 0.2 percent
As for the tax cuts stimulating the economy with extra spending – you can forget that pipedream. According to Statistics NZ,
Household consumption expenditure, which measures the volume of spending by New Zealand households, was flat this quarter (0.0 percent).
See: IBID
National not only bought the 2008 election with promises of unsustainable, unaffordable tax cuts – Key, English, Joyce, et al, squandered an opportunity to keep 70,000 New Zealanders in paid employment (see: Employment graph, 2008-2012).
It was all so unnecessary.
Addendum
In March 2008, the then Finance Minister, Michael Cullen said,
“Even before these challenges hit home John Key wants to increase our debt to at least 25 per cent of GDP. But he does not pretend he wants to borrow more to pay for more services and he does not really believe he needs to borrow more to pay for roads. He only wants to outspend Labour on tax cuts.”
See: [Labour]Government will not borrow for tax cuts
According to Treasury, the current net government debt as at 30 June 2012 stands at… 24.8% of GDP – just shy of 25%,
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Source: Treasury – Financial Statemement of the Government of New Zealand
Cullen called it 100%.
It’s a shame that 1,053,398 voters couldn’t look past their own selfishness, and the lure of cash dangled before them, by a Party that was hell-bent on it’s own agenda to win power at any cost.
For New Zealand, that cost measured $50 billion and 175,000 unemployed.
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Johnny’s Report Card – National Standards Assessment y/e 2012 – environment
To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.
The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.
Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc) in 2008 and four years in office to make good on it’s election promises.
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Environment
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The rhetoric:
“What global Leaders know, and what the National Party knows, is that environmentalism and a commitment to economic growth must go hand in hand. We should be wary of anyone who claims that one can or should come without the other. And we should always measure a Government’s environmental rhetoric against its environmental record.
In the years ahead it will be increasingly important that New Zealand marries its economic and environmental policies. Global climate change awareness, resource shortages, and increasing intolerance of environmental degradation will give environmental policy renewed relevance on the world stage…
… And, in seeking the balance between environmental and economic goals, National will never forget that New Zealand’s outstanding physical environment is a key part of what makes our country special. Kiwis proudly value our forests, mountains, rivers, lakes, and oceans. They are part of our history and they must continue to define our future.”
see: John Key, Speech: Environment Policy Launch
“National will also ensure New Zealand works on the world stage to support international efforts to reduce global greenhouse gas emissions. We are committed to honouring our Kyoto Protocol obligations and we will work to achieve further global alliances that build on the goals agreed to at Kyoto.”
See: Ibid
The reality:
National’s track record in environmental conservation and protection has been as expected; bad. And getting worse with each policy release.
On the agenda are;
- Fracking – a process that has been shown overseas to induce small earthquakes; contamination of underground water tables; risks to air quality; gases and hydraulic fracturing chemicals escaping to the surface; mishandling of toxic waste chemicals; and health effects on humans and animals.
- Increased mining actitivity in sensitive ecological areas such as the Denniston Plateau.
- Allowing deep sea drilling to go ahead despite New Zealand being woefully unprepared for a major oil spill such as happened in the Gulf of Mexico in April 2010, when the Deepwater Horizon drilling rig exploded. (see: Deepwater Horizon)
- A watering down of a proposed fishery protection reserve in the Ross Sea.
- New Zealand was the only country to vote against protection marine mammals at the International Union for Conservation of Nature conference.
- And the abandonment of New Zealand’s participation in the Kyoto Protocol.
Perhaps the most scurrilous, dishonest act, was National’s gradual backtracking on the ETS (Emissions Trading Scheme).
On May 2008, John Key stated,
“National supports the principle of the ETS and is following the select committee process closely. National has had reservations about the timing of new taxes on motorists and households when there has been no personal tax relief for so long.”
See: ‘Carbon neutral’ policy added to scrap heap
On 8 April 2010, Key confirmed that the ETS would be preserved unchanged,
“I’d say it’s unlikely it would be amended.”
See: ETS changes ‘unlikely’ despite pleas
By 6 June 2010, the then-Climate Minister, Nick Smith announced that whether or not agriculture comes into the emissions trading scheme in 2015 would depend on technological advances and what other countries do.
See: ETS may exclude agriculture – Climate Change Minister
And on 9 November 2011, Nick Smith announced,
“ … It is not in New Zealand’s interests to include agricultural emissions in the ETS yet. The lack of any practical and real technologies to reduce agricultural emissions means it would only impose a cost or tax on our most important export industry. It would also have New Zealand too far ahead of our trading partners on climate change mitigation measures. National will review the position in 2014 and only include agriculture if new technologies are available and more progress is made internationally on reducing greenhouse gas emissions.”
By 3 July 2012, Key began to publicly vacillate,
“John Key says the Government will wait for other countries to follow suit before introducing agriculture into the Emissions Trading Scheme…”
See: Govt puts off including agriculture in ETS
And on 20 August 2012, National introduces the “Climate Change Response (Emissions Trading and Other Matters) Amendment Bill 2012″, which would remove agricultural emmissions indefinitely, and will,
“remove a specified entry date for surrender obligations on biological emissions from agriculture”.
See: Government announces ETS amendments
It took them four years to do it, with some cunning public manipulation (and outright lies) – but National achieved it’s real agenda,
- Watering down the ETS until it was toothless,
- Keeping agriculture (the worst emitter of greenhouse gases in NZ) out of the ETS
- Abandoning the Kyoto protocol
See previous blogpost for further details: ETS – National continues to fart around
Perhaps New Zealanders don’t quite realise that when National talks of being “blue-green” – they are referring to the colour of money – not conservation.
The response:
National’s response to our growing environmental problems?
Shoot the messenger.
In November 2012, Environmental scientist, Dr Mike Joy, told the unvarnished truth to the world that our “100% Pure” and “Clean & Green” image was largely a myth. Dr Joy blew the cover on our dirty rivers; fouled lakes; high levels of greenhouse gas emissions from our agricultural sector.
He told the New York Times,
“There are almost two worlds in New Zealand. There is the picture-postcard world, and then there is the reality.”
See: New Zealand’s Green Tourism Push Clashes With Realities
National’s Tim Groser did not like that one little bit, and responded with condemnation of Dr Joy,
“It’s been used as a stick to beat New Zealand by environmental activists.”
See: Minister lashes out at environmentalists over 100% Pure
And Dear Leader added this confusingly disjointed bit, just to sheet home the message to all critics to ‘STFU’,
“It’s like saying ‘McDonald’s, I’m loving it’ – I’m not sure every moment that someone’s eating McDonald’s they’re loving it . . . it’s the same thing with 100% Pure. It’s got to be taken with a bit of a pinch of salt.”
See: IBID
See previous blogposts: When spin doctors go bad, John Key’s “pinch of salt” style of telling the truth
I wonder if Mr Groser or Dear Leader will be swimming or drinking water from any of these rivers,
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The result:
Meanwhile, Yale University’s Environmental Performance Index highlighted one simple fact; New Zealand has slipped on international EPI rankings.
In 2008, New Zealand ranked seventh out of 149 nations.
(See: 2008 Environmental Performance Index)
In 2012, our ranking dropped seven placings to number fourteen.
(See: 2012 Environmental Performance Index)
On every indicator and policy, New Zealand is doing poorly in the field of conservation. We are going backwards.
New Zealanders need to get their collective heads around one simple fact; giving priority to environmental protection is not just a “good Greenie idea” (which it is, by the way) – but impacts on our $23 billion tourism industry and our $14.5 billion dairy and meat export industry.
Those who would damage or destroy our environment for short-term monetary gain, sheer selfishness, or pigheaded ignorance, are guilty of nothing less than economic treason against our country. (Put that in your pipe and smoke it, Mr Unsworth! See previous related blogpost: Lobbyist stands by ‘ego trip’ email)
Addendum:
The only reason that National has not merited a “F” is that at least they backed down from mining in Schedule 4 Conservation lands, after a public outcry and 50,000-strong protest in Auckland (see: Huge protest says no to mining on conservation land) in May 2010.
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Johnny’s Report Card – National Standards Assessment y/e 2012: employment/unemployment
To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.
The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.
Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc) in 2008 and four years in office to make good on it’s election promises.
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Employment/Unemployment
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The rhetoric:
“We agree with you, it’s the government’s responsibility to do everything within it’s powers to try to get people jobs.” – John Key, 17 November 2011
“The driving goal of my Government is to build a more competitive and internationally-focused economy with less debt, more jobs and higher incomes.” – John Key, 21 December 2011
“It’s true, ultimately if every one was to get off welfare we’d need to create even more jobs, but that’s the Government’s whole agenda is to have a vibrant economy that does produce jobs. I certainly accept there’s not a job for every single person, but I don’t accept there aren’t some jobs out there.” – John Key, 28 February 2012
The reality:
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Source: Tradingeconomics – Unemployment rate
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Source: Tradingeconomics – Unemployed persons
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The response:
Unemployment has increased by 70,000 people since National took office in 2008.
The Global Financial Crisis, as a rationale, has worn thin and should be dismissed for what it is; a shoddy excuse that should no longer be accepted.
The lowest unemployment, as any National politician will happily confirm is in Christchurch,
In Canterbury, in the year to September 2012, the unemployment rate decreased 0.3 percentage points to 5.2 percent. For women the decrease was 0.8 percentage points, down to 5.9 percent. There was a slight increase in the unemployment rate for men (0.1 percentage points), up to 4.6 percent.
The number of people employed rose 8,800 over the year in Canterbury, with 11,600 more people employed in part-time work (up 17.9 percent). There was a 2,800 decrease in the number of people working full time (down 1.2 percent).
The total increase in employment reflected a statistically significant 9,000 rise in the professional scientific, technical services, administrative, and support services industry group. Most of this rise was from the professional, scientific, and technical services industries.
The number of men and women employed in Canterbury both increased. For women the rise in employment was mostly in the professional, scientific, technical services, administrative, and support services industry group. For men the rise in employment was in that industry group, but also in the construction industry.
Which poses the question: if the reconstruction of Christchurch is creating jobs – why has National not engaged in a similar house-building programme throughout the country?
If the reconstruction programme has resulted in increased employment in Christchurch – why not implement the very same solution nationwide, to generate jobs?
The answer, unfortunately, lies in ideological pig-headedness; National does not accept that the State has a role in job creation,
“Nothing creates jobs and boosts incomes better than business growth. For New Zealand to build a more productive and competitive economy, we need more innovative companies out there selling their products on the world stage.” – John Key, 24 August 2012
Unfortunately (for us, as a nation and society), this laissez faire, market-based approach, has failed to deliver the jobs we desperately need. In fact, the “free market” has simply opted for the cheaper, easy-option,
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Not exactly a stunning result for National’s promise last year to create 170,000 new jobs.
Addendum:
Will Statistics NZ include the 719 foreign workers as part of any job growth stats for the next Quarter?
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Johnny’s Report Card – National Standards Assessment y/e 2012: crime
To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.
The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.
Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc) in 2008 and four years in office to make good on it’s election promises.
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Crime
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The rhetoric
” We also need to ensure there is effective policing in all parts of our cities and in all areas of the country. We will not tolerate violence and antisocial behaviour. Under a National government, gangs will not be controlling neighbourhoods so posties can’t even deliver the daily mail.
The tragic events surrounding the parole of Graeme Burton show that Labour’s law and order policies seem to be based on the rights of criminals.
Let me say that under National, the parole system will be focused on protecting innocent Kiwis from hardened, unrepentant and dangerous criminals. Under any government I lead there will be no parole for repeat violent offenders.
We will do more than that to improve our criminal justice system, but for today let me send the clearest of messages. Those who break the laws of our society destroy the fabric of The Kiwi Way. No government I lead will put up with that. ” – John Key, 30 January 2007
See: The Kiwi Way: A Fair Go For All
Law and order is to National what environmentalism is to the Greens; it’s ‘raw meat’ for their conservative constituents – many of whom have little understanding nor interest in the root causes of crime. Poverty, unemployment; a growing wealth gap; hopelessness; alienation – these are inconceivable to many National supporters.
So Key and his National cronies, spin doctors, and Party strategists are on solid ground when it comes to this issue. Throw in a bit of beneficiary bashing…
“We also have a serious and growing problem with long-term welfare dependency.”
See: IBID
And a bit of brown bashing…
“I don’t think that’s necessary and I think my view is widely held by a lot of New Zealanders. If it was holding New Zealand back, sure we could arguably go and do that but that’s not where I see these things going. He can make any claims he likes. The Maori King entitled to a different view to mine, it doesn’t mean I’m culturally ignorant.
I don’t think it’s right. If someone wants to take that land grab, they can give it a go.“
See: Government could nationalise water – Key
… and the Nats are practically guaranteed the government. Never underestimate the casual racism of a significant sector of our society.
This racism plays into the hands of National who regularly tap such latent conservative streaks in our society for their own political agenda.
More rhetoric
“The Government is committed to keeping New Zealanders safe – on our streets and in our communities. We’ve delivered the lowest crime rate in 30 years, but we want to continue to keep driving the crime rate down.” – John Key, 3 July 2012
See: Prime Minister welcomes first action plan
Key has taken credit for a “drop” in crime on several occassions this year. But is he telling the truth? Telling lies? Or bending the truth and misrepresenting the facts to suit his Party’s agenda?
Let’s check the stats from NZ Police, shall we?
Crime trends for the year ending June 2008,
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And crime trends up to 2012,
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And guess what…?
The trends clearly show a gradual reduction of reported crime since 1996/97.
For Key to claim this as a “success” for his administration reminds us, yet again, that the man will bend the truth to suit his demands. Quite simply, the drop in crime has been ongoing for the last sixteen years and has little to do with Dear Leader and his Party’s policies.
Reported crime was also dropping druring the 2000-08 Labour-led government.
Will John Key take credit for that “success” as well?
Addendum
If, as data shows, and as Key has been crowing, crime has been steadily reducing since 1996, why is National committing to spending $300 million for a new prison at Wiri, South Auckland, and a further $540 million to operate and maintain? That is $840 million of our taxes that could be better invested in upgrading delapidated state houses and raising this country’s children out of poverty.
See: Fletcher signs $300m Wiri prison contract
Could it be that the motivation lies with providing a profitable Public-Private Partnerships (PPP) with Fletcher Building, Serco, Spotless Facility Services, John Laing, InfraRed, Accident Compensation Corporation, and Macquarie Capital? That’s nearly $1 billion going to private corporations for a prison we seem not to need.
Who sez crime doesn’t pay?
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Johnny’s Report Card – National Standards Assessment – Compassion
To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.
The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.
Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc) in 2008 and four years in office to make good on it’s election promises.
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Compassion
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The measure of compassion expressed by a government is the one thing that separates a government Of the People – to regimes that encompass the worst forms of self-interest; autocracy; barbarism; and corruption.
Of all aspects of National’s performance, compassion is one that has no measurement; no means by which to compare performance from one year to the next; or from one government to the other.
However, there are three issues relating to National’s performance and John Key’s leadership, that give an overall impression of this government’s capacity for compassion.
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Pompe Disease sufferers
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I first wrote about seven people – all of whom were afflicted with Pompe Disease – in October 2011. (See: Priorities?)
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As I wrote then,
“It seems that this government can spend millions on rugby, party zones, luxury limousines, ministerial travel and other perks – but spending money to save the lives of our fellow New Zealanders is “unaffordable” ?
Well, at least this illustrates the priorities of this government like nothing else does. It is obvious what is more important to John Key and his colleagues in the National Party.
What makes this tragedy even more ghastly is that in 2008, John Key campaigned on behalf of women suffering from breast cancer for Pharmac to fully fund herceptin. Pharmac at that time had decided to fund only a nine week course – whilst campaigners were demanding a full 12 month period of funding. (see: Herceptin: What’s it going to take? )
Perhaps the difference between Mr Hill’s case, suffering from Pompe’s disease, is that 2008 was an election year and National was campaigning hard against an incumbent Labour government, led by an experienced, politically savy, and fairly popular prime minister.
National of course, won the 2008 election and Key “made good” on his election promise to force Pharmac to extend funding for herceptin (see: Key: Herceptin funding proudest achievement).”
An email to Health Minister Tony Ryall, on 22 October 2011, yielded no results.
On 12 June 2012, Allyson Locke – another Pompe Disease sufferer – went public with her story,
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In November 2012, Allyson wrote directly to John Key, via his Facebook account,
Dear Mr Key
I have written to you several times over the past 2 years regarding people with Pompe Disease not being able to get treatment. Pompe Disease is a rare (7 people in NZ have it) and fatal disease. There is a medication available in NZ which will halt the disease and in most cases give some improvement. This is an enormous positive for a fatal disease. The medication has been proven to work and there are published medical papers regarding this. The medication is expensive, but there are medications funded in NZ which are more expensive, and less proven.My question to you Mr Key is, why do you continue to ignore the plight of Kiwis who suffer from Pompe disease, letting us die from slow and painful deaths at young ages. The youngest person in NZ who has this disease is only 20 years old. She has been declined for treatment. Another one of our members has been declined 4 times, FOUR TIMES! Nearly 60 other countries world wide fund this medication.
To be honest, your treatment of those of us with Pompe Disease is nothing short of ignorant and criminal. It’s about time you stood up and answered to us. You’re OUR Prime Minister, let’s hear what YOU have to say about it. We are sick of being ignored by you and your PHARMAC crew. If it was a member of your family i bet the medication would be funded asap. But because we are nameless faces, you don’t care. WE are KIWIS and we NEED treatment! If we had cancer we would get treatment! We wouldn’t have to beg and plead for our lives.
But I’m not too proud to beg. I’m dying, and i need treatment. What will you do for us? Please answer me.
Sincerely
Allyson Lock
She received no reply. Not even the courtesy of an acknowledgement.
Thereafter, I wrote directly to John Key as well (see: Terminal disease sufferer appeals to John Key).
My email was forwarded to Health Minister, Tony Ryall, who at least has the intestinal fortitude to respond to my queries, unlike our spineless “Prime Minister”,
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(See: Terminal disease sufferer appeals to John Key – Update & more questions)
I found Ryall’s response curious and requested clarification on his stament that he was “as a Minister […] prevented by law from intervening in PHARMAC’s decision-making process”,
Date:Thursday, 22 November 2012 9:41 PM
From: Frank Macskasy “fmacskasy@yahoo.com”
Subject: Pompe Disease sufferers: A request for mercy
To: Tony Ryall “Tony.Ryall@parliament.govt.nz”Sir,
I am in receipt of your email dated 22 November, regarding Enzyme Replacement Therapy (ERT) for sufferers of Pompe Disease. I understand you have already been in contact with Ms Allyson Lock on this matter.
You state that your reason for not supporting funding for ERT is – and I quote you – that “as a Minister I am prevented by law from intervening in PHARMAC’s decision-making process”.
I refer your attention to the 2008 election campaign where your Party pledged to extend herceptin treatment for breast cancer, from nine weeks to twelve months, even though Pharmac had up to that point been resisting all such requests on the grounds of cost and efficacy.
Post election, after becoming government, you implemented your election promise, and you stated in a press release dated 10 December 2008,
“We are extending funding for Herceptin to allow patients and their doctors to have a choice of a 12 months course. The nine-week treatment option also remains funded and available.”
I refer your attention to the following press releases from yourself and the Prime Minister, announcing additional funding for herception, despite PHARMAC’s initial decision opposing the move;
12-month Herceptin treatment now available
http://www.scoop.co.nz/stories/PA0812/S00083.htm
Government honours Herceptin promise
http://www.scoop.co.nz/stories/PA0812/S00082.htm
I have three subsequent questions, which you may be able to clarify;
1. If you are unable to intervene in PHARMAC’s decision making process – what process did you use to fund herception from nine weeks to twelve months?
2. Where was funding obtained from?
3. Why are you unable to use the same process to fund ERT as you did for Herceptin?
I hope this problem can be resolved with some urgency, as Pompe Disease is terminal, and seven New Zealanders are facing a death sentence unless help is forthcoming.
Regards,
-Frank Macskasy
Blogger
Minister Ryall’s response only seemed to add to the impression that National’s intervention for breast cancer sufferers in 2008 was a political stunt, motivated for electoral advantage, and nothing more. He wrote back on 5 December,
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(See: Health Minister circumvents law to fulfill 2008 election bribe? )
In his email, Ryall outlined how National circumvented the law and used Ministry of Health money as a slush fund to pay for their 2008 electoral promise (to extend herceptin treatment for breast cancer sufferers).
I replied six days later,
Date: Tuesday, 11 December 2012 9:17 PM
From: Frank Macskasy “fmacskasy@yahoo.com”
Subject: In response to your letter dated 5 December
To: Tony Ryall “Tony.Ryall@parliament.govt.nz”Sir,
Re; Pompe Disease sufferers
Thank you for your letter dated 5 December explaining the circumstances and means by which Herception was funded outside of normal PHARMAC channels. Using the Ministry of Health to directly fund an extension of Herceptin for breast cancer sufferers was certainly a novel approach.
It occurs to me that the same process can be employed to fund Enzyme Replacement Therapies (ERT) for the seven New Zealanders who are suffering from the terminal condition known as Pompe Disease.
I do not accept that, as you suggest in your 5 December letter, that “ in the current fiscal environment, unfortunately funding is not available for all treatments” since your government seems to find funding for events such as the Rugby World Cap ($220m); advertising by the NZ Defence Force ($20m); bonuses for state owned enterprises employees ($54m); millions spent on tax breaks and advertising campaigns in the movie industry, etc.
There appears to be no valid reason that Pompe Disease sufferers are not offered the same “lifeline” that you extended breast cancer sufferers in 2008.
It is my contention that through clever negotiations, government should be able to secure necessary ERT medication at a reasonable price, perhaps by offering contracts in others areas.
At least we have established that government is not constrained by legislation surrounding PHARMAC and that flexibility exists with funding mechanisms.
I urge you to reconsider this issue and to find ways and means to facilitate a positive outcome for Pompe Disease sufferers.
Regards,
-Frank Macskasy
I have yet to receive a response.
Addendum 1
On 8 May 2012 Finance Minister, Bill English, conceded that partial-privatisation of Meridian, Genesis, Mighty River, Solid Energy, and further sell-down of Air New Zealand might result in the government having to borrow hundreds of millions of dollars to invest in those SOEs (see: Govt might have to borrow more once assets sold). But that’s ok, because English said,
“You’re looking at over the next three or four years growth in the Crown balance sheet net value of 20 or 25 billion dollars, so a few hundred million here and there is not acutally that big a commitment.“
It’s a shame the same sentiment cannot extended to New Zealanders desperatel requiring life-giving medicines.
Addendum 2
On 20 December 2012, the Remuneration Authority granted a 1.9% salary increase – back-dated to 1 July 2012 – for all politicians. (See: MPs get 1.9 per cent pay rise)
Which is difficult to reconcile with Minister Ryall’s comment on 5 December 2012,
“… as I advised you in my letter of 22 November 2012, in the current fiscal environment, unfortunately funding is not available for all treatments.”
There is no compassion here.
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Salisbury School
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Salibury School.
This one beggars belief.
On 27 August 2012, Education Minister and National’s #1 Screw-Up announced the closure of an all-girl’s special needs residential school, at Richmond – Salisbury School,
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The all-female students were to be “re-integrated” (ie; forcibly amalgamated) with Halswell School, in Christchurch. Halswell is described as a “Boys School, Sch. for Intellectual Impairments” on one website, www.school.nz.
There were immediate concerns about the wisdom and safety of placing vulnerable young women in an all-male environment, where both genders were highly vulnerable and at-risk from inappropriate behaviour.
Despite the well-meaning – but ultimately misguided views of some – it is impossible to monitor every single young person. The numerous incidences of sexual abuse in religious institutions such as Catholic Schools should be sufficient evidence that children can be at severe risk of inappropriate behaviour and exploitation by others.
As an aside, this blogger condemns in the strongest possible terms the irresponsible comments and attitudes of certain individuals who, by their words, supported Parata’s unsound and dangerous proposals. (See: Government ‘right’ to close school – academic)
Luckily for the young women of Salisbury School and their families, sanity – in the form of Justice Dobson of the High Court – prevailed. On 12 December 2012, Justice Dobson ruled that the Minister of Education’s decision to close Salisbury School was illegal.
Illegal – and completely, utterly, insane.
Justice Dobson said the proposed amalgamation created “the prospect of greater risk of sexual or physical abuse” to the girls if they shifted to a co-ed institution. It doesn’t take a Quantum Physicist to figure that one out (see: School denies sex risk to pupils).
Only a person totally lacking in insight could have contemplated needlessly placing vulnerable young women into a position of potential harm.
Little wonder that Salisbury’s Board chairwoman, Helen McDonnell stated with obvious frustration and anger,
“We do not believe the minister intends to retain Salisbury after 2014; her views, and those of her ministry, are clearly pre-determined. Therefore, we call on the Government to appoint another minister to take any decisions considered to be necessary.”
Parata is spectacularly inept beyond polite description.
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And only a political Party – National in this instance – that shared such a lack of insight and awareness of personal vulnerabilities, could even contemplate allowing such madness to proceed.
Question: had Parata’s decision stood and the amalgamation proceeded – who would have accepted responsibility for any harm to any of the young women students transferred to Halswell with this mythical “wraparound care”?
Answer: no one.
Such is the way here in New Zealand.
Compassion? None demonstrated here. Only cold, hard-hearted indifference. And stupidity beyond belief.
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Welfare beneficiaries
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There is nothing as low as kicking people when they are down.
The 2007/08 the Global Financial Crisis started a world away in Wall Street, USA. It would be fair to say that the Boards of Lehmann Bros, Goldman Sachs, AIG, General Motors, et al, did not comprise of social welfare beneficiaries. It was not the Unemployed, solo-mothers, widows, Sick and Invalid, who made the decisions that would plunge the planet’s economy into an on-going Recession.
But listening to the likes of Paula Bennett and John Key, you would be be hard-pressed not to come to the conclusion that the victims of the Recession – and now social welfare recipients – did not cause the global economic meltdown.
Never have so few powerless been blamed for so many awful decisions by the powerful.
Amongst Bennett’s agenda to demonise welfare recipients,
- solo parents on the Domestic Purposes Benefit would be required to look for part-time work when their youngest child is five and fulltime work when that child turns fourteen, (see: Key: Mums of one-year-olds better off working). The inference being that looking after the nation’s children is not “real work”.
- Parents receiving welfare payments would be made to enrol their children in early childhood education centres and with a doctor. (see: Welfare reforms target kids’ education, health) The inference being that if you’ve just been made redundant, or left a violent partner, and in receipt of a social welfare benefit, that you are suddenly unfit to be a parent.
- mothers who have an additional baby already on the Domestic Purposes Benefit will be required to look for work after 12 months, (see: IBID). The inference being that women on the DPB are deliberately becoming pregnant to receive more “handouts”. Fortunately, MSD data shows different.
- a proposal to force women and their daughters, receiving a state benefit, on to contraception (but no mandatory sterilisation for men on welfare) . (see: Birth control plan ‘belittling to women’). The inference being that women on welfare are of “loose morals”.
- a proposal to force social welfare recipients to immunise their children (see: Benefits may be linked to kids’ jabs). The inference being that welfare recipirents are lazy, dirty, and diseased.
- mandatory drug-testing for welfare recipients (see: Drug tests for more beneficiaries mooted). The inference being that welfare recipients – many of whom were in paid employment prior to the Global Financial Crisis – are now suddenly lazy drug addicts.
- actual drug and alcohol addicts recieving welfare assistance would not be drug tested. (see: Addicts escape beneficiary drug testing) Which kind of shows the pointlessness of this exercise; testing non-addicts – but leaving real addicts alone. Rationale: pandering to National’s ill-informed Radio Talk back constituency; rabid right wing; and other assorted low-information voters.
- a plan to stop welfare payments to beneficiaries subject to arrest warrants (see: Beneficiaries on warrants face cash cut) Inference; that those on welfare are all criminals.
- specifically nominating “kidnappers” as having their welfare cut (see: Kidnappers among targets in benefit plan) Inference; Really, really – welfare beneficiaries are criminals!! In reality, people convicted and imprisoned for serious crimes already lose any welfare payments. Is Bennett suggesting that people have their benefits stopped before due process of the law determining guilt or innocence?
- and umpteen media stories, “explaining” the high cost of social welfare, generated from Bennett’s office (see: Single mum on DPB for decades, Minister spells out $43,000 ‘salary’ claim for solo mum, Revealed: $100k-plus beneficiary homes, Beneficiaries cost $130,000 over lifetime, Beneficiaries’ bill $78 billion . Notice how the sums involved get bigger and bigger?). Inference; bloody welfare beneficiaries are sucking this country dry. Never mind that prior to 2007/08, and the Global Financial Crisis, most welfare recipients actually had jobs. In September 2008 there were 23,273 unemployed receiving a benefit. By September 2012, that number had more than doubled to 50,390 (see: MSD – September 2012 ). Did 27,117 suddenly decide that unemployment benefits of $200 a week was better than $600 or $700?! Only a right wing bene-basher of low intelligence might think so – and most of those bigots are not quite right in the head,
- and just in case the Talkback Radio mob are too thick to comprehend National’s smear-campaign, Key spelt it out in simple syllables; Food parcel families made poor choices, says Key
See previous related blogposts:
Paula Bennett shows NZ how to take responsibility
Paula Bennett: one strike and she’s out
How Paula Bennett and National are wasting our taxdollars
Bennett confirms: there are not enough jobs!
Paula Bennett on unemployment: spin baby, spin!
The real obscenity here is two-fold,
1. That a financial crisis emanating from the other side of the planet, involving greed, and a considerable degree of law-breaking, was able to ruin the lives of so many workers and their families – whilst the CEOs of many of the cotrporations involved pocketed big, seven-figure, “bonuses”.
2. That John Key and Paula Bennett both benefitted from a social welfare system that gave them access to tax-payer’s money; subsidised accomodation; free education; etc. Bennett was even able to buy herself a house using her WINZ benefit. (See previous related blogpost: Hon. Paula Bennett, Minister of Hypocrisy)
For both Key and Bennett to now manipulate public opinion against welfare beneficiaries to take the “heat” of National for rising unemployment is despicable.
Key has stated that he believes welfare reform would help lift people out of poverty. (See: Key admits underclass still growing)
This makes no sense.
It is not welfare “reform” that is needed – there is nothing wrong with our welfare system. It is working precisely as it was intended to during times of hardship for ordinary New Zealanders. (See previous related blogpost: Welfare ain’t broke – It’s the Jobs that ain’t there, John-boy!)
What is needed are jobs and a programme for growth. Welfare “reforms” is a useless red-herring being dangled in front of National’s constituents (who still hold to the fantasy that beneficiaries caused the GFC as an excuse to stay on welfare).
Until John Key, Paula Bennett, Bill English, et al, stop fixating on welfare “reforms, one thing is crystal clear – National has no plans to reduce unemployment by creating jobs. Their only agenda is to frighten or coerce people of welfare, and deeper into poverty.
This isn’t compassion – it’s criminal.
Compassion? A psychopath would show more feelings toward his/her cat.
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Johnny’s Report Card – National Standards Assessment y/e 2012
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To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.
The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.
Whilst it is acknowledged that the Global Financial Crisis impacted harsly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc) in 2008 and four years in office to make good on it’s election promises.
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Compassion
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Crime
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Employment/unemployment
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Environment
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Growth
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Incomes
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Inequality & Poverty
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Migration
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Social Welfare Safety Net
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Trade
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Outlook for 2013
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