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Election ’17 Countdown: Joyce – let the lolly scramble begin!

25 February 2017 Leave a comment

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(Or, “Under-funded health, education, and other social services? Let them eat tax-cut cake!”)

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2017 Election – Opening Gambits and Giveaways

You can tell it’s election year; the lolly-scramble (aka, hint of tax cuts) has begun;

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Historical Context

Cutting taxes (and social services on-the-sly) is one of National’s mainstays when it comes to election promises. Bribes work best when a government has nothing left to offer.

Who can forget the infamous  2008 election campaign, where – despite the Global Financial Crisis firmly taking hold of the New Zealand economy – then-National Party leader, John Key promised tax cuts.

In January 2008;

“We will cut taxes, not just in election year, but in a regular programme of ongoing tax cuts.

[…]

And we will do all of this while improving the public services that Kiwis have a right to expect. ”

In March 2008, then Finance Minister, Michael Cullen warned against borrowing for tax cuts;

“ Those who would actively choose to drive New Zealand into further debt to pay for tax cuts lack real ambition for our economy…

[…]

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.

His plan would cost an extra $700 million a year in financing costs alone, around what the government has invested in new health services for each of the last two years.

But the real worry is that Mr Key’s pro-debt policy shows he does not take long-term challenges seriously. His risky deal for tax cuts today would leave the bill to our children and grandchildren tomorrow.”

Undeterred, Key pursued his irresponsible promises and in August 2008 announced to a gullible public;

National will fast track a second round of tax cuts and is likely to increase borrowing to pay for some of its spending promises.

Key made the incredible assertion that tax-cuts would not impact on government debt;

So that will be extremely clear cut and rather hermetically sealed.

Key’s claim of “hermetically sealing” tax cuts from the rest of government fiscal activity was never fully explained, and nor did the MSM ever challenge that unbelievable promise.

In October 2008, Key repeated his fantasy of affordable tax cuts;

Our tax policy is therefore one of responsible reform…  We have ensured that our package  is appropriate for the current economic and fiscal conditions… 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… National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing’ .

The rest is history. National was elected to power on 8 November and tax cuts implemented in 2009 and 2010. Government borrowing and  debt rocketed;

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A third round scheduled for 2011 was cancelled as the budget blow-out  caused – in-part – by  unaffordable tax-cuts began to hit home even on a profligate National-led administration.

By May 2011, National was borrowing $380 million per week to fund it’s debt. Bill English and John Key seemed startled by the government’s deteriorating financial position;

Finance Minister Bill English said the Government’s financial position had deteriorated “significantly” since late 2008.

“The pre-election update in 2008 forecast that the deficit for this year would be $2.4 billion,” he said.

“It’s much more likely to be around $15b or $16b.”

That level of deficit, as NZPA has previously reported, will be the highest in New Zealand’s history and Mr English confirmed that today.

Prime Minister John Key confirmed the average weekly borrowing figure, which he said was unaffordable.

Michael Cullen’s warnings over unaffordable tax cuts seem to have been long-forgotten as collective amnesia over-took the National Party leadership.

Worse still, it was the rising army of unemployed who were to pay the fiscal bill for National’s profligacy;

More than three quarters of all beneficiaries will be forced to seek work or face cuts to their payments under sweeping recommendations from the Government’s Welfare Working Group… Working group chairwoman, economist Paula Rebstock, said the present high levels of welfare dependency meant major changes were needed. “ There are currently few incentives and little active support for many people reliant on welfare to move into paid work. Long term benefit dependency can be avoided if investments are well targeted and timely…”  Social Development Minister Paula Bennett said the report was an opportunity to change the welfare system and would feed into Government work in the area.

Key indulged in National’s favourite activity when things went horribly wrong after his administration’s apalling policty-decisions. He blamed those at the bottom of the economic heap;

Prime Minister John Key says beneficiaries who resort to food banks do so out of their own “poor choices” rather than because they cannot afford food. “But it is also true that anyone on a benefit actually has a lifestyle choice. If one budgets properly, one can pay one’s bills. “And that is true because the bulk of New Zealanders on a benefit do actually pay for food, their rent and other things. Now some make poor choices and they don’t have money left.”

By 2016/17, National’s net debt had reached $66.3 billion. (Damn those beneficiaries’ “poor choices”.)

The Joy of Joyce’s Tax Bribe

On 8 February this year, Joyce announced aspects of this year’s coming Budget. Joyce  dangled the tax-cut carrot  in  front of voters;

It is also very important to remain mindful that the money the Government spends comes from hard working Kiwi families. We remain committed to reducing the tax burden on lower and middle income earners when we have the room to do so.

On the same day, Joyce voiced concerns about New Zealand’s massive mountain of private debt;

I have discussed DTIs with the Reserve Bank Governor, who remains concerned about the levels of debt in some households in the context of recent increases in house prices.

Joyce has good reason to be nervous. As of this year, New Zealand’s household debt has reached stellar proportions;

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Any further tax-cuts will not only be based on cuts to social services (health, education, housing, NGOs, etc), but may further fuel the housing bubble.  This would raise the prospect of a monstrous  three-headed creature of National’s making where;

  • it would likely have to have to borrow to fund the tax-cuts,
  • fuel an increase in private debt as tax-cuts are spent on a property-buying binge,
  • as well as driving first-home buyers out of the market as housing-prices take off again.

Joyce voiced this concern on 8 February;

The use of macro-prudential tools can be complex and affect different borrowers in different ways. I am particularly interested in what the impacts could be on first home buyers.”

So further tax cuts may have negative impacts that a fourth National administration would have to deal with if it wins the 23 Sept election.

On top of which, New Zealanders would be faced with further cuts to social services and increasing user-pays in health and education. From our on-going housing crisis;

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… to more user-pays in education;

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…in healthcare;

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… and the gutting of NGO services through budget-cuts;

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When Kiwis take up National’s tax-cut bribes, they end up paying more, elsewhere.

But even slashing the budgets for the state sector and NGOs is insufficient to meet the multi-billion dollar price-tag for tax-cuts.  National is desperately having to scramble to find money where-ever it can. So-called student loan “defaulters” are firmly in National’s eyesights;

Almost 57,000 student loan borrowers found in Australia

The agreement came into force in October and the details of around 10,000 New Zealanders were found in the first data match. The process has since been refined and a total of 56,897 people have now been located.

“These borrowers have a combined loan balance of $1.2 billion and $430 million of that is in default. Inland Revenue will now start chasing up these borrowers and taking action to get their student loan repayments back on track,” says Mr Joyce says.

Mr Woodhouse says “The data shows that more than half of these borrowers left New Zealand over five years ago, with nearly a quarter having been away for more than 10 years. A third of them have not returned to New Zealand in the past four years. One third of the group has had no contact with Inland Revenue, and 43% have not made a payment since they left New Zealand.

“It’s time these people did the right thing and met the obligations they signed up to when they took out their student loan,” Mr Woodhouse says.

Who else will National target to squeeze money out of?

What social services will National slash to fund tax-cuts?

What further user-pays will be implemented?

One further question; if National does not pay down our sovereign debt – how will the country cope with another global financial crisis and shock to our economy? As Joyce himself pointed out;

 

“ We need to keep paying down debt as a percentage of GDP. We’ve set a target of reducing net debt to around 20 per cent of GDP by 2020. That’s to make sure that we can manage any shocks that may come along in the future.”

 

When National took office from Labour, the previous Clark-Cullen government has prudently resisted National’s tantrum-like demands for tax cuts and instead paid down our sovereign debt. As former Dear Leader Key himself was forced to admit;

In 2005, as Leader of the Opposition;

“ Firstly let me start by saying that New Zealand does not face the balance sheet crisis of 1984, or even of the early 1990s. Far from having dangerously high debt levels, gross debt to GDP is around a modest 25 percent and net debt may well be zero by 2008. In other words, there is no longer any balance sheet reason to justify an aggressive privatisation programme of the kind associated with the 1980s Labour Government.

In 2012*, as Prime Minister Key  justified the partial sale of state-owned assets;

The level of public debt in New Zealand was $8 billion when National came into office in 2008.  It’s now $53 billion, and it’s forecast to rise to $72 billion in 2016.  Without selling minority shares in five companies, it would rise to $78 billion.  Our total investment liabilities, which cover both public and private liabilities, are $150 billion – one of the worst in the world because of the high levels of private debt in New Zealand.”

(* No link available. Page removed from National Party website)

With our current debt of $66.3 billion, we no longer have a safety-buffer. That is the current dire state of our government books.

It is astonishing that Joyce has the nick-name of “Mr Fixit”, as he makes irresponsible hints of tax cuts to come.

Little wonder that Joyce’s unearned reputation as “Mr Fix It” was deconstructed by journalist and political analyst, Gordon Campbell;

The myth of competence that’s been woven around Steven Joyce – the Key government’s “Minister of Everything” and “Mr Fixit” – has been disseminated from high-rises to hamlets, across the country. For five years or more, news outlets have willingly (and non-ironically) promoted the legend of Mr Fixit…

[…]

Of late however, the legend has lost some of its lustre. More than anything, it has been his handling of the SkyCity convention deal that has confirmed a lingering Beltway suspicion that Joyce’s reputation for business nous has been something of a selfie, with his competence appearing to be inversely proportional to his sense of self-esteem. Matthew Hooton’s recent critique of Joyce in NBR – which was inspired by how the SkyCity convention deal had cruelly exposed Joyce’s lack of business acumen – got a good deal of traction for that reason. On similar grounds, Joyce’s penchant for (a) micro-managing and (b) the prioritising of issues in terms of their headline potential has resulted in his ministerial office becoming somewhat notorious around Parliament for (c) its congested inefficiency and for (d) a not-unrelated extent of staff burnout.

[…]

Not only is Joyce’s ministerial office renowned as an administrative bottleneck – where issues tend to be ranked in terms of their p.r. potential for the Minister – none of this seems to be in service of any wider goal or vision. As Mr Fixit, Joyce tends to be engaged in the equivalents of blown fuses and leaking taps – rather in the re-design of the political architecture. Joyce has simply never been – and has never pretended to be – a big picture kind of politician. He has been never someone with an abiding interest in – or the intellectual stamina for – systemic change.

The re-election of National this year – by any means necessary, whether beneficial to New Zealand or not, no matter what the social or financial costs – appears to be ‘Mr Fixit’s’  latest ‘DIY’ project.

And like most DIY budgets, wait for the blow out.

Just like 2009.

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References

Interest.co.nz: Finance Minister says Government remains ‘committed to reducing the tax burden

Scoop media: Tax cuts still in the mix for Joyce’s first budget

Sharechat: Tax cuts still in the mix for Finance Minister Steven Joyce’s first budget

Radio NZ: Budget date set, tax cuts likely

NBR: Government hints at tax cuts in Budget 2017

Fairfax media: Joyce signals low and middle earners’ top rates target for tax cuts

NZ Herald:  The Economy Hub – About those tax cuts… Steven Joyce, the big interview

NZ Herald: John Key – State of the Nation speech

Scoop media: Government will not borrow for tax cuts

NZ Herald: Nats to borrow for other spending – but not tax cuts

Guide2: National Party – Tax Policy

NZ Treasury: Financial Statements of the Government of New Zealand for the Year Ended 30 June 2010 – Debt

NBR: Tax cuts scrapped in budget

Interest.co.nz: Budget deficit worse than forecast; debt blows out by NZ$15.4 bln

NZ Herald: Govt borrowing $380m a week

Fairfax media: Extensive welfare shake-up needed – report

NZ Herald: Food parcel families made poor choices, says Key

NZ Treasury: Budget Economic and Fiscal Update 2016

Beehive: 2017 Budget to be presented on 25 May

Beehive: Finance Minister requests cost-benefit analysis on DTIs

NZ Herald: New Zealand residential property hits $1 trillion mark

Beehive: Almost 57,000 student loan borrowers found in Australia

Scoop media: John Key Speech – State Sector Under National

Werewolf: The Myth of Steven Joyce

Other Blogs

The Hand Mirror: A crack in the wall

Previous related blogposts

Tax cuts & school children

Letter to the editor: Setting it straight on user-pays in tertiary education

Letter to the Editor: tax cuts bribes? Are we smarter than that?

The Mendacities of Mr Key #3: tax cuts

The Mendacities of Mr Key # 19: Tax Cuts Galore! Money Scramble!

The Mendacities of Mr English – Social Services under National’s tender mercies

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This blogpost was first published on The Daily Blog on 20 February 2017.

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The Mendacities of Mr English – Social Services under National’s tender mercies

12 February 2017 2 comments

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Context

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On 25 January, as Radio NZ returned to it’s normal broadcasting schedule (and putting away it’s dumbed-down “summer programming” until next December/January), John Campbell had his first interview with John Key’s replacement, Bill English.

Campbell raised several issues with English; the US withdrawal from the TPPA; the Pike River mine disaster; and the housing crisis. At this point, English made this staggering claim;

@ 5.58

“We’ve got a government actually with a good record on addressing, in fact, some of the toughest social issues. There may be disagreement over means by which we’re doing it, ah, but our direction is pretty clear. And you know over, certainly heading into election year we think that the approach the government’s developed around social investment, around increasing incomes is the right kind of mix – “

English’s bland assertion that “government actually with a good record on addressing, in fact, some of the toughest social issues” is at variance with actual, real, mounting socio-economic problems in this country.

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Key indicator #1: Unemployment

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The latest HLFS unemployment stats show an increase from 4.9% to 5.2% in the December 2016 Quarter. However, in all likelihood, the unemployment numbers are actually much, much, higher since Statistics NZ arbitrarily altered the way it  calculated what constituted  unemployment.

On 29 June 2016, Statistics NZ announced that it would be changing the manner in which it defined a jobseeker;

Change: Looking at job advertisements on the internet is correctly classified as not actively seeking work. This change brings the classification in line with international standards and will make international comparability possible.

Improvement: Fewer people will be classified as actively seeking work, therefore the counts of people unemployed will be more accurate.

The statement went on to explain;

Change in key labour market estimates:

  • Decreases in the number of people unemployed and the unemployment rate

  • Changes to the seasonally adjusted unemployment rate range from 0.1 to 0.6 percentage points. In the most recent published quarter (March 2016), the unemployment rate is revised down from 5.7 percent to 5.2 percent 

  • Increases in the number of people not in the labour force 

  • Decreases in the size of the labour force and the labour force participation rate

The result of this change? At the stroke of a pen, unemployment fell from 5.7% to 5.2% for the March 2016 Quarter (and subsequent Quarters).

If the “current unemployment figures” from Stats NZ are reported as “5.2%’, they may well be back to the original March 2016 figure of 5.7%, before the government statistician re-jigged definitions.

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Key indicator #2: Housing

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– Home Ownership

According to the 1984 NZ  Yearbook, in 1981 the number of rental dwellings numbered 25.4% of housing. 71.2% were owner-occupied. Nearly three quarters of New Zealanders  owned their homes.

Home ownership reached it’s maximum height in 1991, when it stood at 73.8%. Since then, it has steadily declined.

By 2013 (the most recent census survey), the numbers of rental dwellings had increased to 35.2% (up 33.1% in 2006). Home ownership had decreased to  49.9%  (down from  from 54.5% in 2006). If you include housing held in Family Trusts, the figure rises to 64.8% of households owning their home in 2013, down from 66.9% in 2006.

Whether you include housing held in Family Trusts (which may or may not be owner-occupied or rented out), home ownership has fallen steady since the early 1980s.

Renting has increased from 25.4% to 35.2%.

More and more New Zealanders are losing out on the dream of home ownership. Conversely, more and more of us are becoming tenants in our own country.

As Bernard Hickey from Interest.co.nz said in December last year;

Nearly two thirds of the 430,000 households formed since 1991 are tenants.

Think about that for a moment. It is a stunning revelation of how the young and the poor have been hit the hardest by the changes in New Zealand since the mid-1980s, and on an enormous scale.

It means two thirds of the kids born in those families grew up in rental accommodation, and more than 80% of those are private rentals (although the Housing NZ homes are often no better). That means they often grew up in mouldy, damp, cold and insecure housing. It’s true that some homes occupied by their owners are also below par, but it’s a much lower proportion and owners have the option to improve their homes through insulation and ventilation.

The NZ$696 billion increase in the value of New Zealand’s houses to NZ$821 billion between 1991 and 2015 means the 64% of owners in live-in houses have also had plenty of financial flexibility to improve those houses. Renters have had no access to that wealth creation and are not allowed to put a pin in the wall, let alone put in a ventilation system or some batts in the ceiling. The take-up for the Government’s home insulation and heating subsidies were vastly higher among home-owners than they were for landlords.

Those 284,000 renting households formed since 1991 have also often been forced to move schools and communities and all the roots that build families because New Zealand’s rental market is so transient.

[…]

It illustrates the scale of the fallout from that collapse in home ownership from 1991. Not only has it handicapped the education, health and productivity of a entire generation of New Zealanders, but it is set to magnify the likely growth in pension and healthcare costs of our ageing population. And that’s before the wealth and income inequality effects.

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– Affordability

In 2016, the 13th Annual International Demographia International Housing Affordability survey rated New Zealand as one of the most unaffordable housing markets in the world;

The most affordable major housing markets in 2015 are in the United States, with a moderately unaffordable Median Multiple of 3.9, followed by Japan (4.1), the United Kingdom (4.5), Canada (4.7), Ireland (4.7) and Singapore (4.8). Overall, the major housing markets of Australia (6.6), New Zealand (10.0) and China (18.1) are severely unaffordable. (p2)

[…]

In New Zealand, as in Australia, housing had been rated as affordable until approximately a quarter century ago. (p24)

A 2014 report by the NZ Institute for Economic Research stated  the “the average house price rose from the long-run benchmark of three times the average annual household income to six times“;

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The NZIER report refers to several reasons for increasing housing prices; slow supply of land; demographic demand (from ‘Baby Boomers’); and investor demand caused by lack of a capital gains tax. Interestingly, the Report also refers to an “over-supply of finance”;

The loosening of financial standards and rising household debt relative to income has happened over a long period of time. The increase in indebtedness has coincided with rising house prices relative to incomes. This suggests that increased household indebtedness has at least partly contributed to the increasing price of homes. (p14)

Prior to Roger Douglas de-regulating the banking/finance sector, New Zealand banks could only lend depositor’s funds as mortgages.

As a result, mortgage money was “tight”, and scarcity helped keep house prices down. Vendor’s expectations were kept “in check” by scarcity of bank funds. Prior to the mid 1980s, Vendor’s Finance (by way of a Second Mortgage) were commonly-used financial tools to assist house-owners to sell and buyers to complete a purchase.

Once the banking sector was opened up, and monetary policy relaxed, cheap money flooded in from overseas for banks to on-lend to house-purchasers. As property investor, Ollie Newland vividly explained in the 1996 TV documentary, Revolution;

“I got a phone  call from my bank manager to say some bigwigs were coming up from Wellington to have a chat with me. I thought it was just one public relations things they do. I had a very small office, it wasn’t much bigger than a toilet cubicle, and those five big fellows  crowded in with their briefcases and books and they sat on the floor and the arms of the chairs – I only had one chair in the place – and stood against the walls. Their first words to me were, we’re here to lend you money. As much as you want. For somebody like me, and I’m sure it’s the same for everybody else, to suddenly be told by the bank manager that you could have as much money as you want, help yourself, that was a revelation. We thought we had died and gone to heaven.”

Unfortunately, the side affect of this was to increase vendor’s expectations to gain higher and higher prices for their properties. Combined with recent high immigration, and a lack of a comprehensive capital gains tax, and the results have been troubling for this country;

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As well as increasingly unaffordable housing, we – as a nation – are sitting on a trillion-dollar fiscal bomb.

Think about that for a moment.

Little wonder that in September last year, the Reserve Bank issued the sternest warning yet that we were headed for impending economic mayhem;

A sharp correction in house prices represents a key risk to the financial system, and one that is increasing the longer the current boom in house prices persists. A severe downturn in house prices could have major implications for the banking system, with over 55 percent of bank loans secured against residential property. Moreover, elevated household debt levels and a growing exposure of the banking system to investor loans could reinforce a housing downturn and extend reductions in economic activity, as highly indebted households are forced to reduce consumption and sell property.

As with many other individuals, institutions, organisations, business leaders, left-wing commentators, media, political pundits, political parties, the NZIER was (and still is) calling for a comprehensive capital gains tax to be implemented.

Even then, this blogger suspects we may be too late. National (and it’s predecessor, to be fair) have left it far to late and the economic horse has well and truly bolted.

Even a Capital Gains Tax at 28% – New Zealand’s current corporate tax rate – may be insufficient to dampen speculative demand for properties.

Meanwhile, the dream of Kiwis owning their own homes continues to slip away.

Depressingly, New Zealanders themselves have permitted this to happen.

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– State Housing

If the Middle Classes and their Millenial Offspring are finding it hard to buy their first home, think of the poorest  families and individuals in our communities. For them, social housing consists of packing multiple families into a single house; living in an uninsulated, drafty,  garage; or in cars.

Last year, the story of mass homelessness exploded onto our media and our “radar” as New Zealanders woke up to the reality of persistent poverty in our cities;

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Although on occassion, the mainstream media found them themselves  in embarrassingly ‘schizophrenic’ situations as they attempted to reconcile reporting on our growing housing crisis – whilst raising advertising revenue by  promoting “reality” TV programmes that were far, far removed from many people’s own disturbing reality;

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According to UNICEF;

295,000 New Zealand kids are living beneath the poverty line, which means they are living in households where income is less than 60% of the median household income after housing costs are taken into consideration.

One way to alleviate poverty is to provide state housing, at minimal rental, to families suffering deprivation. Not only does this make housing affordable, but also strengthens a sense of community and reduces transience.

Transience can have deletarious effects on families – especially on children – who then struggle with the stresses of losing friends; adjusting to new neighbourhoods, and new schools.

A government report states that transience for children can have extreme, negative impact on  their learning;

Nearly 3,700 students were recognised as transient during the 2014 year. Māori students were more likely to be transient than students in other ethnic groups.

[…]

Students need stability in their schooling in order to experience continuity, belonging and support so that they stay interested and engaged in learning.

All schools face the constant challenge of ensuring that students feel they belong and are encouraged to participate at school. When students arrive at a school part-way through a term or school year, having been at another school with different routines, this challenge may become greater.

Students have better outcomes if they do not move school regularly. There is good evidence that student transience has a negative impact on student outcomes, both in New Zealand and overseas. Research suggests that students who move home or school frequently are more likely to underachieve in formal education when compared with students that have a more stable school life. A recent study found that school movement had an even stronger effect on educational success than residential movement.

There is also evidence that transience can have negative effects on student behaviour, and on short term social and health experience

Writing for The Dominion Post, in April 2014, Elinor Chisholm and  Philippa Howden-Chapman pointed out the blindingly obvious;

Continuity of education and supportive relationships with teachers are critical for children’s educational performance.

“Churn” is not good for educational performance or enrolment in primary health care, where staff can ensure children are properly immunised and chronic health problems can be followed up.

It was for this reason that, in our submission on the Social Housing Reform Bill late last year, we strongly recommended that families with school- age children should be excluded from tenancy review.

Secure tenure and stability at one school would allow children the best chance of flourishing. In high- performing countries such as the Netherlands, children are explicitly discouraged from changing schools in the middle of the school year.

The bill had announced the extension of reviewable tenancies to all state tenants (new state tenants had been subject to tenancy review since mid- 2011). However, the housing minister, as well as the Ministry of Business, Innovation and Employment, had made clear that the disabled and the elderly were to be excluded from tenancy reviews.

In our submission, we acknowledged the Government for recognising the importance of secure tenure.

People who are compelled to move house involuntarily can experience stress, loss, grief and poorer mental health. Housing insecurity is also associated with poorer physical health.

National’s policy of ending a state “house for life”;  increased tenancy reviews for state house tenants, coupled with the sale of state houses, is inimical to the stabilisation of vulnerable families; the well-being of children in those families; and to communities.

In 2008, Housing NZ owned 69,000 rental properties.

By 2016, that number had dropped significantly to 61,600 (plus a further 2,700 leased).  National had disposed of some 7,400 properties.

Between 2014 and 2016, at least 600 state house tenants lost their homes after “reviews”.

This, despite our growing population.

This, despite John Key’s own family having been provided with the security of a state house, and Key enjoying a near-free University education.

This, despite John Key, ex-currency trader,  and multi-millionaire, admitting in 2011 that New Zealand’s under-class was growing.

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Key indicator #3: Incomes & Inequality

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In June 2014, Oxfam reported on New Zealand’s growing dire child poverty crisis;

The richest ten per cent of New Zealanders are wealthier than the rest of the population combined as the gap between rich and poor continues to widen.

Oxfam New Zealand’s Executive Director Rachael Le Mesurier said the numbers are a staggering illustration that the wealth gap in New Zealand is stark and mirrors a global trend that needs to be addressed by governments in New Zealand, and around the world, in order to win the fight against poverty.

“Extreme wealth inequality is deeply worrying. Our nation is becoming more divided, with an elite who are seeing their bank balances go up, whilst hundreds of thousands of New Zealanders struggle to make ends meet,” said Le Mesurier.

Figures for the top one per cent are even more striking. According to the most recent data, taken from the 2013 Credit Suisse Global Wealth Databook, 44,000 Kiwis – who could comfortably fit into Eden Park with thousands of empty seats to spare – hold more wealth than three million New Zealanders. Put differently, this lists the share of wealth owned by the top one per cent of Kiwis as 25.1 per cent, meaning they control more than the bottom 70 per cent of the population.

Oxfam New Zealand’s Executive Director, Rachael Le Mesurier, was blunt in her condemnation;

“Extreme inequality is a sign of economic failure. New Zealand can and must do better. It’s time for our leaders to move past the rhetoric. By concentrating wealth and power in the hands of the few, inequality robs the poorest people of the support they need to improve their lives, and means that their voices go unheard. If the global community fails to curb widening inequality, we can expect more economic and social problems.”

A 2014 OECD report placed New Zealand as one of the worst for growing inequality;

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Not only was inequality a social blight, but according to the report it impacted negatively on economic growth;

Rising inequality is estimated to have knocked more than 4 percentage points off growth in half of the countries over two decades. On the other hand, greater equality prior to the crisis helped increase GDP per capita in a few countries, notably Spain.

According to the OECD assessment,  income inequality had impacted the most on New Zealand, with only Mexico a close second;

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The OECD Report went further, making this “radical” observation;

The most direct policy tool to reduce inequality is redistribution through taxes and benefits. The analysis shows that redistribution per se does not lower economic growth.

The statement went on to “qualify”  any suggestion of socialism with a caveat. But the declaration that “analysis shows that redistribution per se does not lower economic growth” remained, constituting a direct contradiction and challenge to current neo-liberal othodoxy.

In August 2015, former City Voice editor, and now NZ Herald social issues reporter, Simon Collins revealed the growing level of child poverty in this country;

The Ministry of Social Development’s annual household incomes report shows that the numbers below a European standard measure of absolute hardship, based on measures such as not having a warm home or two pairs of shoes, fell from 165,000 in 2013 to 145,000 (14 per cent of all children) last year, the lowest number since 2007.

Children in benefit-dependent families also dwindled from a recent peak of 235,000 (22 per cent) in 2011, and 202,000 (19 per cent) in 2013, to just 180,000 (17 per cent) last year – the lowest proportion of children living on benefits since the late 1980s.

But inequality worsened because average incomes for working families increased much faster at high and middle-income levels than for lower-paid workers.

The net result was that the number of children living in households earning below 60 per cent of the median income after housing costs jumped from a five-year low of 260,000 in 2013 to 305,000 last year, the highest since a peak of 315,000 at the worst point of the global financial crisis in 2010.

In percentage terms, 29 per cent of Kiwi children are now in relative poverty, up from 24 per cent in 2013 and only a fraction below the 2010 peak of 30 per cent.

In September 2016, Statistics NZ confirmed the widening of  income inequality from 1988 to 2015,  between households with high  and  low incomes;

  • In 2015, the disposable income of a high-income household was over two-and-a-half times larger than that of a low-income household.
  • Between 1988 and 2015, the income inequality ratio increased from 2.24 to 2.61.  

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The neo-liberal “revolution” took place from the mid-to-late 1980s. Hardly surprisingly, the rise in income inequality takes place at the same time.

Income inequality dipped from 2004 when Labour’s “Working for Families” was introduced.

However, income inequality worsened after 2009 and 2010, when National cut taxes for the rich; increased GST (which impacts most harshly on low-income families and individuals); and increased user-charges on essential services such as prescription fees, ACC levies, court fees, etc. Increasingly complicated WINZ requirements for annual re-applications for benefits and complex paperwork may also have worsened the plight of the country’s poorest.

Despite all the promises made by the Lange government; the Bolger government; and every government since, our neo-liberal “reforms” have not been kind to those on low and middle incomes.

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Key indicator #4: Child poverty

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According to Otago University’s Child Poverty Monitor in 2014;

Child poverty has not always been this bad – the child poverty rate in the New Zealand many of us grew up in 30 years ago was 14%, compared to current levels of 24%.

Thirty years prior to 2014 was the year 1984. David Lange’s Labour Party had been elected to power.

Roger Douglas was appointed Minister of Finance. The Member for Selwyn, Ruth Richardson, was also in Parliament, taking notes.

The term “trickle down” entered our consciousness and vocabulary. It promised that, with tax cuts; privatisation; winding back state services; and economic de-regulation, wealth would trickle down to those at the bottom of the socio-economic ladder.

How is that working out for us so far?

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So much for  the “aspirational dream” offered to us by “trickle down” economics.

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Key indicator #5: The Real Beneficiaries

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In June last year, Radio NZ reported  the  latest survey of household wealth by Statistics NZ. It found;

“…the country’s richest individuals – those in the top 10 percent – held 60 percent of all wealth by the end of July 2015. Between 2003 and 2010, those individuals had held 55 percent. The richest 10 percent of households held half of New Zealand’s wealth, while the poorest 40 percent held just 3 percent of total wealth.”

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Following hard on the heels of the Stats NZ report,  Oxfam NZ made a disturbing revelation;

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Three years after her previous public warning,  Oxfam New Zealand’s, Rachael Le Mesurier, was no less scathing. Her exasperation was clear;

“The gap between the extremely wealthy and the rest of us is greater than we thought, both in New Zealand and around the world. It is trapping huge numbers of people in poverty and fracturing our societies, as seen in New Zealand in the changing profile of home ownership.”

National minister, Steven Joyce responded. He was his usual mealy-mouthed self when interviewed on Radio NZ about the Oxfam report;

“There’s always inequality but again you have got to look at those reports carefully because in that report a young medical graduate who has just come out of university would be listed as somebody who is in the poorest 20 per cent because they have a student loan.They’ll pay that student loan off in about four years and they’ll be earning incomes of over $100,000 very quickly.

So although they’re in those figures today, they won’t be in those figures in five years’ time.”

Which appears to sum up the National government’s head-in-sand attitude on child poverty and income inequality.

Economist, Shamubeel Eaqub, though, had a different “take” on the issue and warned;

“Every time we see a new statistic on inequality, whether it’s in terms of income, opportunities or wealth, it shows very clearly that New Zealand is being ripped apart by our class system.”

When economists begin to issue dire social warnings, you know that matters have taken a turn for the worse.

So where does that leave our New Dear Leader Bill English  with his insistence  that “we’ve got a government actually with a good record on addressing, in fact, some of the toughest social issues”?

English’s assertion to John Campbell on Radio NZ, on 25 January, (outlined at the beginning of this story) makes sense only if it it is re-phrased;

“We’ve got a government actually with a good record on addressing, in fact, some of the toughest wealth-accumulation issues. There may be disagreement over means by which we’re doing it, ah, but our direction is pretty clear. And you know over, certainly heading into election year we think that the approach the government’s developed around private investment, around increasing incomes for the wealthiest ten percent is the right kind of mix – “

Not a very palatable message – but vastly more truthful as income inequality continues to wreak appalling consequences throughout our communities and economy.

Otherwise, English appears to reside not so much in the Land of the Long White Cloud, but in the Realm of Wishful Thinking.

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References

Radio NZ: Checkpoint – Bill English on the challenges of his first month as PM

Scoop media: Unemployment rate rises to 5.2 percent as labour force grows

Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates

NZ 1984 Yearbook: 3A – General SummaryCensus of population and dwellings 1981 (see “Tenure of Dwelling”)

Statistics NZ: Owner-Occupied Households

Statistics NZ: 2013 Census QuickStats about national highlights – Home Ownership

Interest.co.nz: Bernard Hickey says the collapse in home-ownership rates among families formed since 1991 is an unfolding disaster for NZ’s economy, our society and the Government’s finances

International Demographia: 13th Annual  International Housing Affordability

NZ Institute for Economic Research: The home affordability challenge

Monetary Meg: What is vendor finance?

Radio NZ: NZ immigration returns to record level

NZ On Screen: Revolution

NZ Herald: New Zealand residential property hits $1 trillion mark

Reserve Bank: Regulatory Impact Assessment of revised LVR restriction proposals September 2016 – Adequacy Statement

The Guardian: New Zealand housing crisis forces hundreds to live in tents and garages

Fairfax media: One in 100 Kiwis homeless, new study shows numbers quickly rising

Al Jazeera: New Zealand’s homeless: Living in cars and garages

NZ Herald: Homelessness rising in New Zealand

Radio NZ: Homeless family faces $100k WINZ debt

TV3 News: The hidden homeless – Families forced to live in cars

TV1 News: Housing crisis hits Tauranga, forcing families into garages and cars

UNICEF: Let’s Talk about child poverty

Education Counts: Transient students

Dominion Post: Housing policy will destabilise life for children

NZ Herald: State housing shake-up – Lease up on idea of ‘house for life’

Radio NZ: Thousands of state houses up for sale

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2015/16

Fairfax media: Nearly 600 state house tenants removed after end of ‘house for life’ policy

NZ Herald: Key admits underclass still growing

Oxfam: Richest 10% of Kiwis control more wealth than remaining 90%

NZ Herald: 300,000+ Kiwi kids now in relative poverty

Statistics NZ: Income inequality

Law Society: Civil court fee changes commence

Fairfax media: Prescription price rise hits vulnerable

Salaries.co.nz: ACC levies to increase in April 2010

Radio NZ: Thousands losing benefits due to paperwork

Scoop media: Health Issues Highlighted in Child Poverty Monitor

NZ Herald: Hungry kids foraging in pig scraps ‘like the slums of Brazil’

Fairfax media: Damp state house played part in toddler’s death

NZ Herald: More living in cars as rents go through roof

NZ Doctor: Tackle poverty to fight rheumatic fever

Radio NZ: 10% richest Kiwis own 60% of NZ’s wealth

Fairfax media: Wealth inequality in NZ worse than Australia

Radio NZ: Steven Joyce responds to Oxfam wealth inequality report

Additional

Dominion Post: Kids dragged from school to school

Other Blogs

The Standard: John Key used to be ambitious about dealing with poverty in New Zealand

Previous related blogposts

Lies, Damned lies and Statistical Lies

Lies, Damned lies and Statistical Lies – ** UPDATE **

National exploits fudged Statistics NZ unemployment figures

2016 – Ongoing jobless tally and why unemployment statistics will no longer be used

CYF – The Hollowing Out of a State Agency

The Mendacities of Mr Key # 18: “No question – NZ is better off!”

Foot in mouth award – Bill English, for his recent “Flat Earth” comment in Parliament

The Mendacities of Mr English – Fibbing from Finance Minister confirmed

Rebuilding the Country we grew up in – Little’s Big Task ahead

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This blogpost was first published on The Daily Blog on 7 February 2017.

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St John management applies tourniquet to workers’ throats

20 January 2017 1 comment

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Charitable organisation, St John, which operates ambulance services nationwide, as well as other medical services, has been engaging in  anti-worker actions during recent industrial negotiations to conclude a collective agreement.

On 5 January, St John announced that workers wearing apparel bearing a pro-union message “Healthy Ambos Save Lives” would be docked 10% of their wages;

St John Ambulance officers who ditch their uniforms as part of ongoing strike action will have their pay docked by 10 per cent.

The First Union, which represents 1000 ambulance officers across the country, has condemned the move as “astounding”.

But St John says it didn’t take the step lightly, and it was done out of concern for the health and safety of staff and patients.

The wage deductions come as ambulance officers enter their third month of industrial action, following stalled collective agreement negotiations with St John.

Striking workers are continuing to respond to emergencies and call-outs as normal, but are breaching St John policy by refusing to wear uniforms.

Instead, unionised St John workers have been wearing T-shirts reading “Healthy Ambos Save Lives”.

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St John clinical operations director, Norma Lane,  ‘spinned’ the wage-docking as a “safety” issue;

“It is important ambulance officers are identifiable in an emergency environment where circumstances can change rapidly. Not complying is a health and safety risk not only to the employee but to fellow officers and other emergency workers. While there is only a very small number of ambulance professionals refusing to wear hi-vis vests, we have advised First Union and our staff that those employees not complying with this requirement will receive a 10 per cent deduction of wages.”

How cutting wages improves safety for workers is not made clear by Ms Lane.

St John’s threats echo that made by AFFCO employers, almost exactly a year ago;

An AFFCO worker has been suspended without pay, and will probably be sacked after filming workers in union t-shirts being refused entry to work, the Meat Workers’ Union says.

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[…]

AFFCO said it was company policy that union t-shirts were not worn on site, and that they were associated with inappropriate and threatening behaviour.

One Union member made his/her feelings perfectly clear with this image posted on First Union’s Facebook page;

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What is clear, though, is that St John is engaging in all-out repugnant industrial warfare against the First Union.

St John Station managers have used emotional blackmail, legal threats from law firms,  and deliberate mis-information in a calculated strategy to undermine First Union and its  members’ resolve. As  Ambulance Professionals First spokesperson, Lynette Blacklaws, revealed on 7 November last year;

“When a crew arrived in mufti at a station in Auckland this morning their manager snapped that ‘if someone dies because they didn’t let you in be it on your heads’. This comes on the same day station managers in the Bay of Plenty told several ambulance officers over the phone that industrial action was cancelled, even though this isn’t true.”

More aggressive  anti-union activity was to come.

On 24 November last year,  St Johns announced on it’s media page that it had  concluded a successful collective agreement with the  Amalgamated Workers Union NZ Southern  (AWUNZ), Central Amalgamated Workers Union  (CAWU), NZ Ambulance Association (NZAA), and the Ambulance Officers Workplace Union  (AOWU).

First Union was not a party to the new collective agreement. St John stated on it’s webpage,

It is our preference to have nationally consistent terms and conditions for all St John employees, accordingly, St John and the four union parties have made provision for the First Union members to become party to the new Collective Agreement should they wish

The statement continued with this ominous ‘rider’;

If First Union decides not to become party to the new Collective Agreement, St John will continue to work through the various options available.

On 7 January this year, First Union learned what “various options” St John had in mind. As reported in The Daily Blog, St John was flexing it’s industrial muscle using new anti-union laws passed by National in 2015.

The union representing over 1000 St John Ambulance staff has today received confirmation from the Employment Relations Authority that St John has lodged an application to withdraw from bargaining without concluding a collective agreement.

If St John were to be successful they would be the first company to withdraw from bargaining without concluding a collective agreement under the 2015 amendments to the Employment Relations Act.

Simply put, National’s so-called “reforms” allowed employers to cease negotiations to conclude a collective agreement with a union, by applying to the Employment Relations Authority;

Before the law change, parties bargaining for a collective agreement were required to conclude that agreement unless there was genuine reason not to. The change means that a collective agreement does not have to be concluded, however parties must still deal with each other in good faith.

[…]

The Act provides some protections against parties that end bargaining by deadlocking on one issue. Specifically, either party can seek a declaration from the Employment Relations Authority (the Authority) about whether bargaining has concluded. The process is discussed in more detail below.

First Union officials were not impressed. They understood the agenda that St John was playing out;

Jared Abbott, spokesperson for Ambulance Professionals First, the network within FIRST Union representing ambulance officers, said the application confirms what the union suspected: that St John had no intention of reaching an agreement.

“St John have spent less than two hours with us at the table since we started our protest actions. Applying to conclude bargaining now is outrageous. This is no way to treat your staff.”

Mr Abbott said that despite writing to the company on several occasions and requesting a proposed collective agreement, St John repeatedly refused to make a formal offer.

Ambulance Professionals First has also written to St John highlighting how no collective agreement was presented to the ratification meetings for the smaller unions who agreed to settle, a requirement under the law for a collective agreement to become operative.

“We’re astounded with how unprofessional St John has been. Ambulance staff just want fair recognition for the hard work they do. This is only going to get more staff off-side,” said Abbott.

“We don’t believe St John’s application will be successful.”

St John is using ‘the stick’. Other employers opt for ‘the carrot’ to break legal strikes;

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Whether by ‘carrot’ or ‘stick’, the bosses’ agenda remains the same: to smash unions and undermine workers’ rights. The end result – dampen wage growth and wind-back hard-won worker’s conditions.

St John management’s unscrupulous behaviour makes a mockery of that organisation’s so-called “five values”;

We do the Right Thing – Whakaaro Tika
We take responsibility. Make the tough calls. Think of others.

We stand Side by Side – Whakakoha
We respect, value and support what others contribute.

We Make it Better – Whakawerohia
We find solutions- step up, own it, do it.

We have Open Minds – Whakahangahanga
We listen openly. Encourage ideas. Welcome feedback.

We are Straight Up – Whakapono
We act with honesty, courage and kindness.

They even have ‘badges’ proudly displayed on their webpage;

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Obviously St John’s “five values” do not extend to their own workers.

Curiously, whilst St John proudly announced it’s collective agreement with four other unions on its “News Articles” page, it made no mention of it’s application to the Employment Relations Authority to abandon negotiation with First Union;

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Neither has it disclosed to the public on it’s website that it is taking draconian steps to dock ambulance drivers’ pay packets by 10% for  wearing shirts bearing union messages.

Is St John ashamed to present this information on their website, where public eyes can see what the organisation is doing to it’s ambulance drivers? It is evidently not a “good look” that an organisation nearly a thousand years old, and  dedicated to helping people, is screwing its own staff.

According to Norma Lane, the wearing of the First Union shirts constitutes   “participation in a partial strike” and thereby justifies docking ambulance drivers’ pay.

Which is about as mean-spirited as a charitable, non-profit organisation can get. As  Jared Abbott correctly pointed out;

“The wage deductions are pretty astounding. The actions ambulance officers are taking cost St John nothing.”

At first look, St John’s actions appear to contravene the Wages Protection Act 1983 which prevents employers from arbitarily docking workers’ pay;

Deductions may only be made from an employee’s pay if they are required by law, agreed to by the employee or are overpayments in some circumstances.

However, it appears that St John is stretching an exemption to what is known as a “partial strike“;

Employees strike when a number of employees totally or partially:

  • break their employment agreement
  • stop work or don’t accept some or all the work they usually do
  • reduce their normal output, performance, or rate of work.

Employees don’t have to stop work completely for them to be on strike.

However, one suspects that more reasonable-minded people would find it difficult to define a “partial strike” as wearing a shirt. If that is St John’s justification for docking ambulance drivers’ pay, then it may be on very shaky ground, both legally and morally.

Whether by luck, or clever design,   this has all transpired over the Year’s End/New Year period when current affairs programmes such as The Nation and Q+A are on hiatus, and even Radio NZ is operating on a “summer holiday programme”. The later  is closer to listening to The Breeze rather than serious news and current affairs.

Once the public begin to understand the machinations of St John’s management, that organisation’s reputation may risk a real hit. “A good reputation” as Colin Beveridge once reflected on,  “is hard-won and easily lost. But the lost reputation has invariably been given away by the actions of the holder, rather than been taken away by somebody else.”

Words that St John’s management would do well to consider.

St John – heal thyself.

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Postscript

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It will be interesting to find out what salary increase St John’s CEO will have this year or next.

 

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References

St John: Ambulance Services

St John: A quick snapshot of what we do

NZ Herald: St John ambulance officers to have pay deducted over industrial action

Radio NZ: Worker suspended over union t-shirts

Facebook: First Union – Healthy Ambos Save Lives

First Union: St John threatens jobs… over wearing a badge

First Union: St John employ “emotional blackmail” in badge dispute

St John:  AWUNZ, CAWU, NZAA & AOWU Unions and St John reach agreement

The Daily Blog: St John apply to end bargaining with FIRST Union

Ministry of Business, Innovation, and Employment (MoBIE): Amendments to the Employment Relations Act 2000 (March 2015)

Ministry of Business, Innovation, and Employment (MoBIE): Law changes to collective bargaining

Radio NZ: Junior doctors offered up to $200/h to break strike – union

St John:  Vision & Values

St John: News Articles

St John: The Order of St John

Radio NZ: Ambulance staff to have wages cut over strikes

Employment NZ: Deductions

Employment NZ: Strikes and lockouts

Fairfax media: Big pay rises for district health board heads

Additional

Facebook: First Union

Facebook: Ambulance Professionals First

Previous related blogposts

If anyone wants to see the Working Class

Help Talley’s Affco Workers!

Immovable and Irresistable forces – combined!!

The Talleys Strikes Back

John Key’s track record on raising wages – 7. Part 6A – stripped away

John Key’s track record on raising wages – 8. An End to Collective Agreements

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This blogpost was first published on The Daily Blog on 15 January 2017.

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Charter Schools in a Post-Truth Era

16 December 2016 1 comment

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Charter Schools’ NCEA Results  in a Post-Truth Era

On 8 December, Radio NZ’s Benedict Collins reported  that Charter Schools had been using dodgy statistics to inflate their apparent “success” rate;

Charter schools use a different method of calculating their NCEA pass rates to state schools – one which inflates their success.

Education Minister Hekia Parata has been warned by her ministry that an imperfect impression of charter schools’ performance is being created as a result.

Advice to Ms Parata shows that when charter schools are measured using the same roll-based methodology as state schools, their pass rates plummet.

The Vanguard Military charter school on Auckland’s North Shore reported a 100 percent Level 2 NCEA pass rate, but that fell to 60 percent when the school’s results were calculated the same way as state schools report.

Labour’s education spokesperson, Chris Hipkins quite rightly slammed the fake results;

“It’s disappointing that we’re not getting apples for apples comparisons but it’s even more disturbing that many kids are leaving these schools without the qualifications the Government says every child needs.

The latest Ministry annual report data also shows charter schools’ National Standards results are actually in decline.

Last year charter schools were awarded performance bonuses for their results while state schools are staring in the face of major funding cuts next year.

It’s simply not fair that students are leaving these school with minimal qualifications while charter schools receive special treatment as state schools struggle.”

ACT’s David Seyour – current Leader of the neo-liberal party responsible for Charter Schools – gave this bizarre explanation for the why the figures had been willfully fudged;

“The reason that there is a difference, just remember, is that we have been pioneering holding schools to account through a contract, and it was necessary if you wanted to do that to have a different system of measurement.”

Seymour tried to regain the moral high-ground by hitting back at Hipkins to defend the bogus data;

“More importantly, Hipkins seems oblivious that there is more than one way to measure NCEA performance. Indeed, there are a range of different measures, including NZQA and what the Ministry reports on Education Counts.”

Seymour fails to explain why it was necessary to use “more than one way to measure NCEA performance“.

As PPTA President, Angela Roberts said;

“Charter schools are a bad idea, for a multitude of reasons, but to hear that their so-called success rates are not based on fair measures is disheartening. We question why the Government put in place a different system for measuring student success for charter schools in the first place.

Benedict Collins also revealed that officials expressed disquiet at the way Charter School performance was being measured;

Education officials are to change the way charter schools report their NCEA results to bring their methodology in line with state schools.

[…]

Education Minister, Hekia Parata has been warned by her ministry that an imperfect impression of charter schools’ performance is being created as a result.

Advice to Ms Parata shows that when charter schools are measured using the same roll-based methodology as state schools, their pass rates plummet.

Parata – herself no stranger to controversy within her education portfolioclearly wanted to tidy up the perception that National and ACT were trying to deceive the public;

“I want there to be a consistent system, for the purposes of reporting to the government, which is about roll-based, which means everybody who is enrolled at that school counts and how well did they do, versus only those who sat NCEA”

Yet, this is not the first time that National and government departments and organisations have been caught out falsifying data.

Police crime-reporting in a Post-Truth Era

A bizarre story of Police employing bogus statistics broke in the NZ Herald in July, 2014;

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It took journalist Eugene Bingham two years to uncover information requested under the Official Information Act;

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When the Herald finally received the information they had requested, a startling item of incriminating nature was discovered;

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A damning internal police document has emerged that appears to show senior officers discussed not releasing embarrassing details about the “ghost crimes” controversy in which 700 burglaries vanished from official crime statistics.

[..]

The memo, known within police as a job sheet, states John Tims had been advised by then-deputy commissioner [Mike] Bush and assistant commissioner Allan Boreham not to respond to the [OIA] request. Brady [see image above] wrote: “(Tims) had been advised to let the request sit and when and if (3rd Degree) followed up with a request the matter would be addressed then.

“The direction to me was to not respond to the Official Information Act request and file the file as it is.”

Up until then, National had been  gleefully trumpeting the fictitious “fall in crime”;

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On TVNZ’s Q+A, on 25 October 2015, Michael Parkin interviewed outgoing Police Association President, Greg O’Conner.

O’Connor was unusually candid  when he made clear the extent to which statistics are fudged to make politicians and State officials look good;

@3.10

“Well, it’s uh, lies, damned lies, and statistics. If you look at the crime stats, um, which is those recorded stats, you’ll say the government and police administration are right. If you look at the stats around calls for service, they’re the phone calls that police receive in communications centes, etc, and just an example, family violence, domestic disputes; up by 10% a year pretty much, and across the board, 20% increase. So it’s the calls for service, to the extent that the communications centres couldn’t manage last summer. There’s a fear, and we’re obviously we’re trying to make sure it doesn’t happen this year. So the two are going in completely different directions.”

Parkin pointedly asked if the statistics are being manipulated. O’Conner’s response  was startling in it’s honesty;

@3.55

“Of course they are. Every government department – I mean, what happens is that, the stats themselves are fair, but I mean I see it as a debate [like] about health, y’know, medical – the waiting lists have going down, but people get kicked of waiting lists and so it’s, you achieve – Put it this way, with crime stats, what we’ve set out to do is the way to cut crime stats is to hit your bulk crime. So if you have any success there, of course, that’s going to be big numbers down. And what you ignore is your small  numbers. You ignore, in fact, interestingly enough you ignore drugs. You ignore a lot of your serious stuff that you only find if you go looking. And in the past that’s got us into real trouble. Got us into trouble with the child abuse files, in particular, and you remember, that they were put aside. Because they weren’t politically known. They were business as usual. All of a sudden we were concentrating on the crime and crash reduction, um, and we ignored that stuff. And so you’ve got to be careful. And this is where the politicisation of policing is really dangerous. It’s not done by the Minister saying ‘you gotta do this and you gotta do that’, it’s done by funding.”

Herald journalist, Eugene Bingham, also reported;

“ It transpired others knew about the allegations around the same time, including the local MP and then-Minister of Justice, Judith Collins.”

Judith Collins featured heavily in Nicky Hager’s ‘Dirty Politics‘, and recently stood as a candidate for the next Leader of the National Party.

Mainstream media is often criticised for reliance on superficial ‘news’ reporting; ‘clickbait‘; and dubious ‘stories‘. On this issue, the Herald and Eugene Bingham revealed to New Zealanders the extent to which State agencies will go to “massage the truth” to present deceptively favourable impressions to the public.

Statistics NZ in a Post-Truth Era

In August of this year, I reported how Statistics NZ had radically changed the manner in which it defined a jobseeker;

Change: Looking at job advertisements on the internet is correctly classified as not actively seeking work. This change brings the classification in line with international standards and will make international comparability possible.

Improvement: Fewer people will be classified as actively seeking work, therefore the counts of people unemployed will be more accurate.

Statistics NZ explained the ramifications of the “revised” definition of unemployment ;

  • Decreases in the number of people unemployed and the unemployment rate

  • Changes to the seasonally adjusted unemployment rate range from 0.1 to 0.6 percentage points. In the most recent published quarter (March 2016), the unemployment rate is revised down from 5.7 percent to 5.2 percent 

  • Increases in the number of people not in the labour force 

  • Decreases in the size of the labour force and the labour force participation rate

A person  job-searching using the internet  was “not actively seeking work“. Predictably, at the stroke of a pen, unemployment “fell” over-night from 5.7% to 5.2%.

It was “manna from heaven” for the incumbent government which has  been besieged on several fronts for worsening social and economic indicators.

Despite being little more than a dressed-up “accounting trick”, politicians could claim with a straight-face that “unemployment was falling”.

Which did not take long.

Statistics NZ announced it’s changes on 29 June 2016.

Four days later, our esteemed former-Dear Leader, John  Key, gloated on TVNZ’s Q+A  to Corin Dann;

“The unemployment rate in New Zealand is now falling pretty dramatically.”

By August, both Key and Bill English were joyfully quoting the “new unemployment stats”.

On 8 August, Key was quoted on Interest.co.nz;

“On the other side, we need these people in an environment where unemployment is 5.2% and where growth is still very, very strong. You’ve just got to be careful when you play around with these things that you don’t hamstring certain industries that need these workers.”

So not only was Key quoting the  “new, revised” unemployment stats – but his government was now actively predicating their immigration policy on the bogus data.

Three  days later, in Parliament, English also gleefully congratulated himself on the “fall” in unemployment;

“The Reserve Bank is forecasting an increase of about 1 percent more growth in the economy over the next 3 years, compared with what it thought 3 months ago. It is forecasting that unemployment is going to continue falling from 5.2 percent this year to 4.5 percent by 2019 and that job numbers will increase by more than 2 percent on average over the next 2 years. A significant component of that, of course, will be the construction boom, where thousands of houses will be built over the next 2 or 3 years. These forecasts are in line with Treasury’s forecast for the labour market and show an economy that is delivering more jobs, lower unemployment, and real increases in incomes when in many developed countries that is not happening.”

Whilst it is expected for politicians to mis-use questionable data for their own self-aggrandisement (and re-election chances), worse was to come.

On 10 August,  Radio NZ‘s Immigration Reporter, Gill Bonnett, reported;

“The unemployment rate stood at 5.2 percent for the three months ended in March.”

Bonnett did not  quote a reference source for that statement. Most likely it was Statistics NZ and it’s now-“revised” figures.

It is unfortunate that some journalists seem unaware of the new regime which portrays unemployment lower than it actually is. The fact that Statistics NZ has fudged their  data which now skews unemployment should be common knowledge throughout the mainstream media.

Especially when National ministers are now “patting themselves on the back” for a “fall” in unemployment that never happened, as their Twitter-feed showed on 2 November;

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And three days later;

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As I wrote on 14 November about Statistics NZ’s decision to change it’s criteria for unemployment,

Ms MacPherson’s [Government Statistician] assertion that Statistics NZ has changed it’s definitions of unemployment and jobseeking  “to maintain consistency with international best practice” is not an acceptable explanation.

If “international best practice” does not recognise on-line jobseeking as constituting a definition of unemployment – then that in itself is worrying and suggests that global unemployment may be much, much higher than current international statistics portray.

As a consequence of Ms MacPherson’s decision to exclude on-line jobseekers from official stats, this blogger concludes that official unemployment data is  severely flawed and unrepresentative of our real unemployment numbers.

In simple terms; the numbers are a sham.

Unemployment statistics will no longer be presented in on-going up-dates of the Jobless Tally.

When data cannot be relied upon to be accurate, it ceases to have value, except as propaganda.

Those who welcome the Post-Truth Era

On 10 July this year, Radio NZ’s Colin Peacock asked if “a ‘post-truth’ era is upon us?”  He quoted journalist Andrew Vance’s misgivings about the way half-truths and outright lies were now becoming more and more a feature of current political discourse;

…TVNZ’s website, political correspondent Andrea Vance said “the polls don’t punish National for straying from the truth”, and she pointed to the success of fact-free campaigns by Donald Trump in the US and Brexit backers in the UK.

“We are living in a ‘post-truth’ era and it has infected New Zealand politics,” said Ms Vance, who worked for newspapers in the UK before reporting on politics here. 

She’s not the only one who thinks so.

Massey University philosophy professor Bill Fish also sees echoes of the UK’s “post-truth” Brexit campaign in New Zealand politicians’ attitudes towards expert opinion and evidence.

“This is different,” Ms Vance told Mediawatch. “With Trump, Brexit and what’s happening here you’ve got political players actively deceiving the public. Politicians have always been selective with truth, but now it is brazen. I’ve been doing this for 17 years and its getting worse. It’s also crept into the public service. This lack of accountability and obfuscation feels like it’s sanctioned by political masters”.

Post-Truth has it’s sibling, “fake news” – which has shown to be an effectively vicious political weapon in the recent Presidential elections.

The phenomenon of Fake News – promulgated and spread repeatedly predominantly by conspiracy and alt.right websites – recently came to violent conclusion in the US when a 28 year old “lone gunman” (did he act alone or was it a conspiracy?) attacked  Comet Ping Pong, a pizza restaurant in northwest Washington;

Edgar M. Welch, a 28-year-old father of two from Salisbury, N.C., recently read online that Comet Ping Pong, a pizza restaurant in northwest Washington, was harboring young children as sex slaves as part of a child-abuse ring led by Hillary Clinton.

The articles making those allegations were widespread across the web, appearing on sites including Facebook and Twitter. Apparently concerned, Mr. Welch drove about six hours on Sunday from his home to Comet Ping Pong to see the situation for himself, according to court documents. Not long after arriving at the pizzeria, the police said, he fired from an assault-like AR-15 rifle. The police arrested him. They found a rifle and a handgun in the restaurant. No one was hurt.

In an arraignment on Monday, a heavily tattooed Mr. Welch, wearing a white jumpsuit and shackles, was ordered held. According to the criminal complaint, he told the authorities that he was armed to help rescue children but that he surrendered peacefully after finding no evidence that “children were being harbored in the restaurant.” He was charged with four counts, including felony assault with a deadly weapon and carrying a gun without a license outside a home or business.

According to alt.right websites  Comet Ping Pong contained a secret underground facility where  “young children were used as sex slaves as part of a child-abuse ring led by Hillary Clinton“.

None of it was true, but in an  ironic twist, the gunman  who attacked Comet Ping Pong is now himself viewed as part of a conspiracy cover-up to protect the non-existant pedophile ring;

The viral nature of the misinformation was illustrated again late Sunday, not long after the police arrested Mr. Welch and called Pizzagate a “fictitious online conspiracy theory” in their report. Some individuals on Twitter said Mr. Welch was an actor used by the mainstream media to divert attention from the alleged crimes at Comet Ping Pong. Followers of a shuttered Reddit thread on Pizzagate dissected the episode on a new online network called Voat.

Witch-hunts based on paranoid conspiracy theories become more bizarre when they turn on – and cannibalise – their own followers.

Even here in New Zealand, individuals were not immune to the moral-panic fanned by the flames of  Fake News. Some commentators uncritically reposted the pedophile allegations.

Pointedly, no citations were ever provided to the parroted allegations. (Mainly because the allegations were a fabrication. Perhaps even a conspiracy in itself, to undermine Hillary Clinton’s presidential campaign.)

As Clinton herself warned, Fake News can have disastrous “real world consequences”;

“This is not about politics or partisanship. Lives are at risk. Lives of ordinary people just trying to go about their days to do their jobs, contribute to their communities. It is a danger that must be addressed and addressed quickly.”

This seems to have been recognised by the Trump transition team who took action against one of their own, caught spreading Fake News;

President-elect Donald J. Trump on Tuesday fired one of his transition team’s staff members, Michael G. Flynn, the son of Mr. Trump’s choice for national security adviser, for using Twitter to spread a fake news story about Hillary Clinton that led to an armed confrontation in a pizza restaurant in Washington.

At first Vice President-elect Mike Pence denied that Flynn had ever worked for the Trump team, saying on MSNBC that he had “no involvement in the transition whatsoever”;

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However, soon after,  a transition spokesman, Jason Miller, admitted that  Flynn had worked for the transition team. Miller said Flynn would no longer be involved.

From Flynn’s Fake News to Pence’s dishonest denial – the truth eventually came out.

Curiously, Michael Flynn’s father – Lt. Gen. Michael T. Flynn – is also well-known for his John Key-style of “truthiness”;

“He has regularly engaged in the reckless public promotion of conspiracy theories that have no basis in fact, with disregard for the risks that giving credence to those theories could pose to the public,” Representative Adam Smith of Washington, the ranking Democrat on the House Armed Services Committee, said on Tuesday.

“Someone who is so oblivious to the facts, or intentionally ignorant of them, should not be entrusted with policy decisions that affect the safety of the American people,” Mr. Smith added.

The Mainstream Media

As Fake News websites and “stories” proliferate, the mainstream media may actually take on a fresh breath-of-life.

In a functioning democracy; with the need for  vital checks and balances; the msm will become more critically vital to determine what is real and what is fantasy. Which also adds greater pressure on msm to ensure that it’s stories are well-researched and cite accurate facts and data.

Relying on dubious sources (such as the Herald did with the now-discredited Donghua Liu allegations) or questionable data from governmental bodies such as Statistics NZ, Police, etc, is no longer be sufficient.

This will be an opportunity for the msm to re-gain their relevance in a post-truth era of Fake News and deliberate political prevarication.

The question is; will they seize that opportunity?

Fake News, Post-Truth, Lies, Charter Schools

Charter Schools are an ideological response to State schools. It is an exercise designed to confirm that profit-driven, private-run education services are more effective and deliver better results than that offered by the State.

One of the core tenet’s of the New Right is that private enterprise/endeavour is superior to anything available from the State.

In 2002, businessman Phil Barry, author of  The Changing Balance Between the Public and Private Sectors, published by the Business Roundtable (aka NZ Initiative), wrote in the NZ Herald;

“Private firms tend to be more efficient than their state-owned counterparts, especially in competitive industries.

Privatisation of SOEs is likely to lead to improvements in their efficiency and to more open and competitive product markets, benefiting consumers, taxpayers and the economy as a whole.

The evidence does not suggest that private ownership is always more efficient. Some state enterprises can perform very well, at least for a period.”

And in 2012, then ACT-leader, John Banks said in Parliament;

“Public or private ownership of assets has been studied to death in many, many studies, and the jury is in. Private enterprise runs businesses better than the Government can.”

For many on the neo-liberal Right, education is a business not a public good and therefore should be no different to electricity supply (semi-privatised); Air New Zealand (semi-privatised – again); or a whole host of other services and assets that were once owned by the tax-payer but have been sold off over the last thirty years.

But to ensure that the basic tenet that “private enterprise runs businesses better than the Government can” is believed to be true by the public – and especially the voting public! – it must be shown to be true.

If it cannot be proven to be true, using accurate measurement and data, then fudging the truth will have to do.

In essence, that is what  ACT’s David Seymour was saying when he lamely attempted to justify  the inflated success rate for Charter Schools by claiming different standards of measurement;

“The reason that there is a difference, just remember, is that we have been pioneering holding schools to account through a contract, and it was necessary if you wanted to do that to have a different system of measurement.”

“…there is more than one way to measure NCEA performance. Indeed, there are a range of different measures, including NZQA and what the Ministry reports on Education Counts.”

When there “there are a range of different measures” you simply pick the one that gives you the results you want.

Which raises the question: what does it say about an ideological experiment if it requires a lie to sustain it?

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Note: certain portions of this story have been re-published from previous blogposts.

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References

Radio NZ: Charter school NCEA reporting to be brought into line

Scoop media: Ministry reveals shocking charter school results

NZ Herald: Charter schools not deceiving public over NCEA exam results, David Seymour says

The Northern Advocate: Charter school pass rates plummet when brought in line with state schools

NZ Herald:  Police made burglaries vanish

NZ Herald:  Two-year search for ‘ghost crimes’ truth

NZ Herald: Calls for ‘ghost crimes’ inquiry after police note revealed

Twitter: The crime rate is falling under National

TVNZ: Q+A – Police Association president steps down

Fairfax media: Firefighter injured after cat decides it does not want to be rescued from tree

Radio NZ: Stuff of substance in a clickbait climate

Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates

TVNZ: Q+A – Interview with John Key

Interest.co.nz: Key deflects calls for migration review; says migration needed with 5.2% unemployment

Scoop media: Parliament – Questions & Answers – 11 August 2016

Twitter: National (2 Nov)

Twitter: National (5 Nov)

Radio NZ: Is a ‘post-truth’ era upon us?

New York Times: In Washington Pizzeria Attack, Fake News Brought Real Guns

Snopes.com: Chuck E. Sleaze

The Daily Blog: Slippery

Buzzfeed News: Hyperpartisan Facebook Pages Are Publishing False And Misleading Information At An Alarming Rate

The Guardian: Hillary Clinton warns fake news can have ‘real world consequences’

New York Times: Trump Fires Adviser’s Son From Transition for Spreading Fake News

Twitter: MSNBC – Morning Joe – Mike Pence

NZ Herald: Phil Barry Private ownership outperforms public

Parliament: State-Owned Enterprises and Crown Entities (Protecting New Zealand’s Strategic Assets) Amendment Bill — First Reading

Additional

New York Times: As Fake News Spreads Lies, More Readers Shrug at the Truth

Wikipedia: List of fake news websites

Radio NZ: Unemployment rate falls after Stats NZ revision

Other Blogs

The Standard: Charter schools fiddling their results

Previous related blogposts

The Donghua Liu Affair: One Year On

Roy Morgan Poll: Unemployment and Under-employment up in New Zealand!

Weekend Revelations #3 – Greg O’Connor and criminal statistics

Lies, Damned lies and Statistical Lies

Lies, Damned lies and Statistical Lies – ** UPDATE **

National exploits fudged Statistics NZ unemployment figures

“Spinning” in a post-truth era

2016 – Ongoing jobless tally and why unemployment statistics will no longer be used

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This blogpost was first published on The Daily Blog on 11 December 2016.

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An earthquake separates John Key and ‘The Iron Lady’, Margaret Thatcher

24 November 2016 2 comments

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In October 1987, British Prime Minister, Margaret Thatcher – apostle of Britain’s neo-liberal, free-market “reforms” – was famously quoted in an interview saying;

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And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour…

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Twenty-nine years later, as much of New Zealand is ravaged by a 7.5 earthquake, John Key makes an appeal to the people of Aotearoa on Radio NZ’s ‘Morning Report‘;

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The one thing I’d we’d just say to New Zealanders at the moment is stay close to your family and friends. Make sure you listen to the radio and listen to the best information that you’re getting. And if you do have certainly older neighbours or family, if you could go in and check up on them that would be most appreciated. Because there will be people feeling genuinely alone.

 

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Far from decrying Key’s sound advice, I would applaud him for giving it at a time when the country is rattled by ongoing,  severe,  seismic activity.

But it illustrates one fact with crystal-clarity;  Thatcher was wrong. There is such a thing as ‘society’.  We are our Brothers and Sisters Keepers; and functioning solely and purely  for our own Individualistic and immediate Familial benefit is not to our  advantage.

For without it, we are very much alone and left vulnerable to the immense, implacable, forces of nature.

Which is why the dictates of neo-liberalism – the so-called “invisible hand of the free-market” and selfish Cult of Individualism –  is doomed to failure. That is why the international  arm of neo-liberalism – globalisation – is  being rejected from country to country.

Because at the end of the day, when this country is hit by earthquakes that tear apart our roads, bridges, offices, community facilities, factories, ports, schools, and our own homes – I don’t see the “Invisible Hand of the Free Market” coming to our assistance, “invisible” or not.

Only people, working collectively for the greater good, can achieve mutual support – quite often for no personal benefit or gain.

Defenders of the neo-liberal/free market/globalisation ideology should stop and consider; we cannot have the Primacy of the Individual in good times, and then seek sanctuary within the strength of society in bad. People acting together as a community is either within us all the time, or not at all.

It is time for the leader of New Zealand’s free-market, pro-neo-liberal, political party to understand this simple truth.

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References

Margaret Thatcher Foundation: Woman’s Own – interview – 31 October 1987

Radio NZ: Morning Report – John Key urges New Zealanders to look out for their neighbours

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This blogpost was first published on The Daily Blog on 19 November 2016.

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When Life is a Lottery

20 November 2016 2 comments

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Fun Fact #1: Between 2006 and 2013,  the number of homeless grew by 25%. Based on Census data;  one in 100 were homeless in 2013; one in 120 in 2006, and one in 130 in 2001.

Fun Fact #2: In 1986, home ownership in New Zealand stood at 73.5%. By 2013, Census data showed home-ownership had fallen to 64.8%.

Fun Fact #3: In August this year, Auckland’s average house price reached – and passed – the $1,000,000 mark.

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Make no mistake, housing has become a crisis in New Zealand as this May poll for  a TV3/Reid Research Poll highlighted;

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Even 61% of National voters accepted the new reality in our once-egalitarian nation. Housing unaffordability (for the middle classes) and homelessness (for beneficiaries and the working poor)  could no longer be ignored.

Stepping back to 20 August 2007, National’s newly-elected leader, John Key, made an impassioned speech to the  Auckland branch of the New Zealand Contractors Federation. In it, he excoriated the then-Clark-led Labour government;

“Over the past few years a consensus has developed in New Zealand. We are facing a severe home affordability and ownership crisis. The crisis has reached dangerous levels in recent years and looks set to get worse.

This is an issue that should concern all New Zealanders. It threatens a fundamental part of our culture, it threatens our communities and, ultimately, it threatens our economy.

The good news is that we can turn the situation around. We can deal with the fundamental issues driving the home affordability crisis. Not just with rinky-dink schemes, but with sound long-term solutions to an issue that has long-term implications for New Zealand’s economy and society.

National has a plan for doing this and we will be resolute in our commitment to the goal of ensuring more young Kiwis can aspire to buy their own home.”

Nine years later, Key’s description of New Zealand’s housing crisis has changed markedly. It is now a “challenge“, as he painfully tried to explain on TVNZ’s Breakfast programme;

“I don’t think it’s a crisis, but prices are going up too quickly. There are plenty of challenges in housing, and there have been for quite some time.”

On 9  November, a Hibiscus Coast couple were the incredibly lucky couple to win the latest multi-million dollar Lotto prize;

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The Radio NZ story further reported;

The man’s wife said at first she thought her husband was joking about the win.

“My head started spinning, my heart was racing and I got the shakes.”

The couple claimed their prize at Lotto’s head office on Thursday afternoon.

“As we sat in the winner’s room, he kept turning to me and saying ‘Am I in a dream?’ and I kept turning to him and saying ‘is this real?'” the woman said.

“We’ve been busting our guts trying to buy our first home,” the winner said.

“We just went to the mortgage broker earlier this week to see what they could do to help. But they just couldn’t make anything work for us.

“We were absolutely gutted and I just said ‘maybe that ship has sailed’.

“But my wife tried to stay positive and said ‘don’t worry, something good will happen for us’.

“I don’t think either of us thought that the something good would be $44 million.”

Note what the woman said here;

“We’ve been busting our guts trying to buy our first home. We just went to the mortgage broker earlier this week to see what they could do to help. But they just couldn’t make anything work for us. We were absolutely gutted and I just said ‘maybe that ship has sailed’.”

When couples have to rely on winning Lotto to be able to afford to buy their first home,  there is something seriously askew in society.

Remember Dear Leader Key’s own words;

“We are facing a severe home affordability and ownership crisis. The crisis has reached dangerous levels in recent years and looks set to get worse. This is an issue that should concern all New Zealanders. It threatens a fundamental part of our culture, it threatens our communities and, ultimately, it threatens our economy.”

In the United States, commentators from the msm, politics, dissident community; and further afield, have rapidly come to the realisation that Donald Trump’s unlikely, unforeseen, and up-till-now improbable victory in the 2016 Presidential  race was predicated on the belated understanding that globalisation and neo-liberalism  have left behind millions of people.

In the Voting Booths across the United States, Consumers became Citizens again, and cast their ultimate sanction against the political establishment and those who supported the neo-liberal orthodoxy. The status quo of Margaret Thatcher and Ronald Reagan (the latter, ironically a Republican like Trump) was utterly repudiated.

The disenchantment and alienation of the Working and Middle classes germinated during the 2008 Global Financial crisis and resulting Great Recession – the effects of which are still with us, eight years late. In the United States, millions of Americans lost their homes.

More than four million Americans have lost their homes since the housing bubble began bursting six years ago. An additional 3.5 million homeowners are in the foreclosure process or are so delinquent on payments that they will be soon. With 13.5 million homeowners underwater — they owe more than their home is now worth — the odds are high that many millions more will lose their homes.

Most telling was this criticism by

Housing remains the biggest impediment to economic recovery, yet Washington seems paralyzed. While the Obama administration’s housing policies have fallen short, Mitt Romney hasn’t offered any meaningful new proposals to aid distressed or underwater homeowners.

Writing for the Huffington Post a year later, David Coates pointed out

“… the vast majority of those four million lost their homes because they lost their jobs, not because they had in better times taken out mortgages that they could not afford.

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It is not the rich who are being foreclosed. It is those on the margin of the core middle class. It is particularly middle class minorities who have taken the greatest hit on both their personal wealth and their associated credit scores. Falling house prices since 2008 have pulled median white net-worth down by 27 percent but median black net-worth down by anywhere between 40 percent and 53 percent.”

All the promises of neo-liberalism had come to nought. Instead millions had lost their jobs and those lucky enough found new work in low-paid service industries. Take-home pay was cut – and Humiliation applied in abundance as ‘compensation’.

The Working and Middle Classes not only lost their job and homes – their new status in low-paid work was precarious.

Events post-2008 hastened the  demise  of the American Dream and the rise of the Precariat, as Richard  McCormack wrote, in February of this year for the Manufacturing and Technology News;

The effects on the U.S. economy caused by 30 years of offshore outsourcing of production and jobs is starting to drive major changes in the American political system. The rise of a “precariat” class of Americans — those who are living “precarious” lives — has created a populist movement that shows no sign of acquiescing to the “establishment” in both the Democratic and Republican parties.

The new precariat comprises a growing class of people who are going nowhere in their jobs, who are insecure and unstable. The group is “experiencing the breaking apart of the American Dream, which is what historically held the country together — the rise of the middle class, with everyone doing better,” notes visiting scholar John Russo of Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor. “It’s not working that way any more.”

Driving the rise of the precariat is a society that is not generating enough wealth. De-industrialization, the shift of major goods-producing industries to foreign nations, and both the Republican and Democratic establishment’s embrace of free trade, are leading to a populist uprising.

The precariat is becoming one of the largest classes of Americans, encompassing far more than blue-collar workers who have been slammed by economic forces outside of their control. It now includes millions of Americans with college degrees who are under compensated or can’t find full-time employment with benefits.

As white-collar jobs have been outsourced, Americans with more than high-school degrees are starting to see their prospects “mirror those of the working class,” says Russo. “That insecurity and instability is now part of their life. That is why this new group is not yet a class in itself. It hasn’t defined what it is going to be.”

It is fragmented, but it is big, and much of it is angry.

In his article, McCormack quotes John Russo from the Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor;

“As steady formal work has been disappearing over time, informal work began to move beyond traditional concepts such as consulting, internships, subcontracting, privatization and intermittent employment,” Russo explains. “Rather than the continued rise of the formal economy, it is the informal economy that is growing.”

The precariat is “potentially all of us united by the fear of insecurity,” he notes. It is made up of “individuals living precarious and insecure existences lacking employment security, job security, income security, skill security, occupational security and labor market security.”

This is no longer the underground economy, but includes displaced individuals from the public and private sectors, millennials dealing with mountains of student debt, and baby boomers forced into early retirement without enough savings to support themselves.

There is little public assistance for the precariat class and “they’re not making demands to get better wages or improved benefits [because they] are replaced easily,” Russo notes.

Three years after Coates’ story,  and nine months after McCormack’s insightful analysis of the public mood, Trump’ ascendance as America’s 45th President was complete. Trump won the States where blue-collar workers had suffered the most.

The story of globalisation and neo-liberal “reforms” of our own economy has followed a familiar story; loss of long-term employment; ever-increasing need for re-training; the rise casualisation and contract piece-work; and the increase of lower-paid service-work.

Depressingly, economist Shamubeel Eaqub has predicted;

“The workplace is likely to be further casualised. “

Which adds further hopelessness to New Zealanders increasingly locked out of what was once known as the Great Kiwi Dream of home-ownership.

The National government ostensibly understands the notion of aspiration, as Dear Leader Key said six years ago;

“I want New Zealanders to be aspirational – to want more for themselves and their families, and to know that they have opportunities to do that.”

Those words ring hollow as National scrambles frantically to make itself  “look busy”, trying to alleviate the dual crisis of  worsening home ownership and homelessness.

Bennett’s suddenly-announced  policy of bribing state house tenants with (up to) $5,000 was widely seen as a panic-driven, ad hoc policy. It certainly caught Finance Minister Bill English by surprise, having no forewarning of Bennett’s media announcement on the issue.

The twin tsunami-waves of homelessness and housing unaffordability appears to have utterly over-whelmed National Ministers.

As Trump’s victory in the US Presidential election has demonstrated with crystal clarity, Consumers can easily become  Citizens again, re-discovering the power of their Vote. When Citizens’ anger becomes focused, and a perceived solution (or even just an opportunity to say “FUCK YOU!” to the Establishment) is put before them – they will vote for it.

Especially when they have lost so much, and have little left to lose.

Such was the case of  the US presidential elections, and before that, the ‘Brexit’ Vote.

As New Zealanders become more and more conscious of how much they have lost in the last thirty years, they too, will find themselves pissed off.

The opening lines of the song  from ‘Les Miserables’ – Do You Hear The People Sing? – should serve as a reminder to the political establishment in this country;

“Do you hear the people sing?
Singing the song of angry men?”

The Great Kiwi Dream of home ownership was never predicated on the long-odds offered by  a little yellow piece of paper;

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Home ownership should not be a Lottery.

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References

Otago Daily Times: Homelessness increasing in NZ

Fairfax media: NZ home ownership at lowest level in more than 60 years

Radio NZ: Auckland’s average house value tops $1 million

TV3 News: Government gets thumbs down on housing

Scoop: Key – Speech to New Zealand Contractors Federation

TVNZ: Is there a housing crisis? John Key fails to say yes or no after being put on the spot

Radio NZ: Claimed – $44 million lotto prize

NY Times: The One Housing Solution Left – Mass Mortgage Refinancing

Huffington Post: America’s Half-Forgotten Housing Crisis

Manufacturing and Technology News: The Rise Of The American ‘Precariat’ – Globalization And Outsourcing Have Created A Combustible Political Culture

Chicago Tribune: How Trump won the presidential election – Revenge of working-class whites

Fairfax media: Shamubeel Eaqub – Job casualisation a global phenomenon

NZ Herald: John Key’s speech to the National Party convention

Interest.co.nz: Paula Bennett announces plan to offer $5,000 to homeless Aucklanders and state house tenants to leave Auckland

TV3 News: Govt to help fund Auckland homeless to move

Metrolyrics: Les Miserables – Do You Hear The People Sing?

Previous related blogposts

Can we do it? Bloody oath we can!

Budget 2013: State Housing and the War on Poor

Budget 2013: State Housing and the War on Poor

National recycles Housing Policy and produces good manure!

Government Minister sees history repeat – responsible for death

Housing Minister Paula Bennett continues National’s spin on rundown State Houses

Letter to the Editor – How many more children must die, Mr Key?!

National under attack – defaults to Deflection #1

National Housing propaganda – McGehan Close Revisited

Housing; broken promises, families in cars, and ideological idiocy (Part Tahi)

Housing; broken promises, families in cars, and ideological idiocy (Part Rua)

Housing; broken promises, families in cars, and ideological idiocy (Part Toru)

Another ‘Claytons’ Solution to our Housing Problem? When will NZers ever learn?

National’s blatant lies on Housing NZ dividends – The truth uncovered!

National and the Reserve Bank – at War!

The seductiveness of Trumpism

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This blogpost was first published on The Daily Blog on 15 November 2016.

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2016 – Ongoing jobless tally and why unemployment statistics will no longer be used

14 November 2016 6 comments

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Continued from: 2015 – Ongoing jobless tally

So by the numbers, for this year;

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January

February

March

April

May

June

July

August

October

November

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Statistics

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This blogger previously reported how Statistics NZ recently implemented a so-called “revision” which would materially affect how unemployment stats were counted and reported;

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On 29 June 2016, Statistic NZ announced that it would be changing the manner in which it defined a jobseeker;

Change: Looking at job advertisements on the internet is correctly classified as not actively seeking work. This change brings the classification in line with international standards and will make international comparability possible.

Improvement: Fewer people will be classified as actively seeking work, therefore the counts of people unemployed will be more accurate.

The statement went on to explain;

Change in key labour market estimates:

  • Decreases in the number of people unemployed and the unemployment rate
  • Changes to the seasonally adjusted unemployment rate range from 0.1 to 0.6 percentage points. In the most recent published quarter (March 2016), the unemployment rate is revised down from 5.7 percent to 5.2 percent
  • Increases in the number of people not in the labour force
  • Decreases in the size of the labour force and the labour force participation rate

The result of this change? At the stroke of a pen, unemployment fell from 5.7% to 5.2%;

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And on-cue, National was quick to capitalise on Statistics NZ’s figure-fudging;

On 2/3 July, TV3’s The Nation, Dear Leader Key told Corin Dann;

“The unemployment rate in New Zealand is now falling pretty dramatically.”

On 8 August, Key was quoted on Interest.co.nz;

“On the other side, we need these people in an environment where unemployment is 5.2% and where growth is still very, very strong. You’ve just got to be careful when you play around with these things that you don’t hamstring certain industries that need these workers.”

On 12 August, in Parliament, English also gleefully congratulated himself on the “fall” in unemployment;

“The Reserve Bank is forecasting an increase of about 1 percent more growth in the economy over the next 3 years, compared with what it thought 3 months ago. It is forecasting that unemployment is going to continue falling from 5.2 percent this year to 4.5 percent by 2019 and that job numbers will increase by more than 2 percent on average over the next 2 years. A significant component of that, of course, will be the construction boom, where thousands of houses will be built over the next 2 or 3 years. These forecasts are in line with Treasury’s forecast for the labour market and show an economy that is delivering more jobs, lower unemployment, and real increases in incomes when in many developed countries that is not happening.”

The latest Statistics NZ (soon to be re-branded Ministry of Truth) unemployment figures showed another “fall”. The unemployment rate for the September 2016 Quarter is now purportedly 4.9%;

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Can that figure – 4.9% – be trusted?

When Statistics NZ “re-jigged” its criteria for measuring unemployment in June, unemployment dropped from 5.7% to 5.2% (subsequently revised again to 5.1%);

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Predictably, National were quick to once again exploit the September statistics, as their Twitter-feed showed on 2 November;

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And three days later;

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It’s all nonsense, of course – made worse by Statistics NZ’s other dodgy criteria used when considering their definition what constitutes being “employed”;

Employed: people in the working-age population who, during the reference week, did one of the following:

  • worked for one hour or more for pay or profit in the context of an employee/employer relationship or self-employment
  • worked without pay for one hour or more in work which contributed directly to the operation of a farm, business, or professional practice owned or operated by a relative

Statistics NZ’s mis-representation of our “low unemployment” environment has gone largely unnoticed and unchallenged. No one in the mainstream media has picked up on the questionable data;

This meant the size of the labour force rose 33,000 and unemployment fell by just 3,000 to 128,000. The unemployment rate fell to 4.9% from a revised 5.0% in the June quarter. This was the lowest unemployment rate since the December quarter of 2008. Unemployment has fallen by 7,000 over the last year and is up 1,000 from two years ago.Interest.co.nz

Unemployment has fallen below 5 percent for the first time in nearly eight years thanks to the growing economy, but it is still not translating into booming wages. Official figures show the unemployment rate declined to 4.9 percent in the three months to September, or 128,000 people, the lowest rate since December 2008.Radio NZ

According to Statistics New Zealand, the unemployment rate fell to 4.9% in the September 2016 quarter. This is the lowest unemployment rate since the December 2008 quarter. There were 3,000 fewer people unemployed than in the June 2016 quarter and 10,000 fewer over the year.Maori TV

The unemployment rate has fallen to 4.9 percent for the September 2016 quarter, according to new figures from Statistics NZ. That’s the lowest it’s been since December 2008. – TV3 News

New Zealand’s unemployment rate fell below 5 percent for the first time since December 2008 as employers took on more staff than expected, although that didn’t spur wages to rise at a faster pace. The kiwi dollar rose on the figures. The unemployment rate fell to 4.9 percent in the three months ended Sept. 30 from a revised 5 percent rate in June, Statistics New Zealand said.Sharechat

New Zealand has recorded its best unemployment rate in almost eight years with third quarter figures falling to a better than expected 4.9 per cent. The jobless rate declined from a revised 5.0 per cent in the June quarter, according to Stats NZ, taking it to its lowest point since December 2008. – NZCity/NZ News

New Zealand’s unemployment rate fell below 5 per cent for the first time since December 2008 as employers took on more staff than expected, although that didn’t spur wages to rise at a faster pace. The kiwi dollar rose on the figures.

The unemployment rate fell to 4.9 per cent in the three months ended September 30 from a revised 5 per cent rate in June, Statistics New Zealand said.NZ Herald

New Zealand’s unemployment rate fell more than expected in the third quarter to drop to 4.9 per cent – the lowest rate since last 2008. The jobless rate declined from a revised 5.0 per cent in the June quarter, according to Stats NZ taking it to its lowest point since the December quarter nearly eight years ago. There were 3,000 fewer people unemployed than in the previous quarter and 10,000 fewer over the year. – TVNZ News

Of course there were “3,000 fewer people unemployed than in the previous quarter and 10,000 fewer over the year“! Ten thousand unemployed people vanished from the data, at the click of a mouse, as Statistics NZ worked their “magic”.

Statistics NZ could potentially make unemployment vanish entirely, overnight, by changing the unemployment criteria to people with only two hearts and scaly blue skin.

Only Hamish Rutherford, at Fairfax media, pointed out the questionable value of Statistics NZ’s data;

Unemployment has fallen to the lowest level in almost eight years, as the economy creates more than 10,000 new jobs a month. Official figures show the unemployment rate dropped to 4.9 per cent in the the September quarter, the first time it has fallen below 5 per cent since December 2008.

Earlier this year Statistics New Zealand revised the way it conducts the quarterly household labour force survey (HLFS), in a bid to bring the survey more in line with international standards. However the changes mean Statistics New Zealand cannot make confident comparisons with all of the figures from previous surveys.

But even in Rutherford’s article, the all-important point of dodgy stats was lost amongst the ‘rah-rah‘ of the mythical drop in unemployment.

The Otago Daily Times made an even less impressive, passing, reference to Statistics NZ’s fudged figures;

Unemployment in New Zealand is at its lowest level since 2008 but there will be lingering concerns about the lack of wage growth and the impact this will have on the inflation outlook.

Statistics New Zealand has changed some of its survey data to measure unemployment and employment and those changes are still bedding in.Otago Daily Times

Government Statistician, Liz MacPherson, has rejected any suggestion of political partisanship in the way unemployment data is now being presented.

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She was defensive in the face of criticism from Labour’s Grant Robertson and on  16 August, Ms MacPherson stated;

Like my predecessors I am fiercely protective of the statutory independence of the role of the Government Statistician and strongly refute any assertions made by Grant Robertson that there has been political interference in the production of official statistics.

This independence means that I maintain the right to make changes necessary to ensure the relevance and quality of our official statistics. Changes to the Household Labour Force Survey have been made to ensure that we produce the best possible measure of the current state of the labour market and to maintain consistency with international best practice.

Far from ignoring technological change during the past 30 years, such as the advent of the internet, we are incorporating these changes so as to be technology neutral.

Within the survey questions, to be regarded as actively looking for a job you must do more than simply look at job advertisements, whether it is online or in a newspaper.

It is not uncommon for revisions to be made to official statistics as a result of more accurate information becoming available or changes to international standards and frameworks.

In addition we are introducing new measures – for example underutilisation – enabling a deeper, richer understanding of New Zealand’s labour market.

When this does occur it is standard practice for Statistics NZ to communicate reasons for revisions and anticipated changes well in advance of their official release, as we did on 29 June 2016. […]

Statistics NZ has a legislative obligation to release objective official statistics. We will continue to do this at all times.

One of many ironies not lost on this blogger is that other government departments extoll the virtues of jobseeking on-line. As CareersNZ and WINZ state the blindingly-obvious, “most job vacancies are listed online”;

Careersnz;

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WINZ;

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Ms MacPherson’s assertion that Statistics NZ has changed it’s definitions of unemployment and jobseeking  “to maintain consistency with international best practice” is not an acceptable explanation.

If “international best practice” does not recognise on-line jobseeking as constituting a definition of unemployment – then that in itself is worrying and suggests that global unemployment may be much, much higher than current international statistics portray.

As a consequence of Ms MacPherson’s decision to exclude on-line jobseekers from official stats, this blogger concludes that official unemployment data is  severely flawed and unrepresentative of our real unemployment numbers.

In simple terms; the numbers are a sham.

Unemployment statistics will no longer be presented in on-going up-dates of the Jobless Tally.

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This Statement has not been endorsed by MiniTruth (formerly StatsNZ)

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Addendum1: Definition of Employment

Employed: people in the working-age population who, during the reference week, did one of the following:

  • worked for one hour or more for pay or profit in the context of an employee/employer relationship or self-employment

  • worked without pay for one hour or more in work which contributed directly to the operation of a farm, business, or professional practice owned or operated by a relative

  • had a job but were not at work due to: own illness or injury, personal or family responsibilities, bad weather or mechanical breakdown, direct involvement in an industrial dispute, or leave or holiday.

Source

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References

Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates

Scoop media: On The Nation – Patrick Gower interviews John Key

Interest.co.nz: Key deflects calls for migration review; says migration needed with 5.2% unemployment

Scoop media: Parliament – Questions & Answers – 11 August 2016

Statistics NZ: Labour Market Statistics – September 2016 quarter

Statistics NZ: Labour Market Statistics – June 2016 quarter

Twitter: National (2 Nov)

Twitter: National (5 Nov)

Interest.co.nz: Jobs grew 35,000 or 1.4% in Sept quarter, but unemployment fell just 3,000 and jobless rate falls to 4.9%

Radio NZ: Unemployment drops to lowest level since 2008

Maori TV: Work force grows despite youth unemployment

TV3 News: Unemployment drops to lowest rate since 2008

Sharechat: NZ jobless rate falls below 5% for first time since 2008, wage inflation muted

NZCity/NZ News: Jobless rate falls to near eight-year low

NZ Herald: NZ jobless rate falls below 5 per cent for first time since 2008, wage inflation muted

TVNZ News: Unemployment rate falls to near eight-year low

Fairfax media: Unemployment drops to lowest level since 2008 on booming job creation

Otago Daily Times: Unemployment lowest in eight years

Radio NZ: Statistician denies political interference over job seeker figures

Statistics NZ: Government Statistician responds to Grant Robertson

Careersnz: Job hunting tips

Work and Income: Where to look

Additional

TVNZ: Q+A – Interview with John Key

Previous related blogpost

Lies, Damned lies and Statistical Lies

National exploits fudged Statistics NZ unemployment figures

Lies, Damned lies and Statistical Lies – ** UPDATE **

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This blogpost was first published on The Daily Blog on 9 November 2016.

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