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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;

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“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.

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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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Letter to the editor – Joyce, TPPA, and wine exports

11 October 2015 6 comments

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Frank Macskasy - letters to the editor - Frankly Speaking

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Listener <letters@listener.co.nz>
date: Thu, Oct 8, 2015
subject: Letter to the editor

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The editor
The Listener

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As National ministers go all-out to extol the virtues of the TPPA (whilst studiously looking the other way and ignoring any nasty surprise fish-hooks), Economic Development Minister Steven Joyce added his five cents worth.

On 6 October, speaking on TV3, Joyce gushed like a school boy on a class outing;

“The meat industry, the fruit industry, the wine industry, the forestry industry, the manufacturing industry – all of these get the benefits.”

The wine industry?

According to Peter Howland’s book, “Social, Cultural and Economic Impacts of Wine in New Zealand”, more than 80% of this country’s wine production is now foreign-owned.

Which means that up to 80% of profits could flow back to off-shore investors and end up in overseas bank accounts.

How does that benefit New Zealand?

What was the purpose of the TPPA – to maximise profits for foreign investors? Is that our role now?

I am reminded of something that our esteemed Prime Minister said about foreign ownership of our land-based production;

“I’d hate to see New Zealanders as tenants in their own country…”

Meanwhile, as foreign owners of our wine industry benefit, it is only a matter of time before the price of pharmaceuticals begin to rise in New Zealand.

Key has promised that the cost of medicines subsidised by Pharmac will not increase to consumers, but that increased costs will be met by government.

But where does government get its money from? Answer: taxpayers.

So whether as consumers or taxpayers, one way or another, we will end up paying for higher prescription charges.

We should also not forget that in 2012 National increased the cost of Pharmac-subsidised medicines from $3 to $5 – a move which impacted on low-income families and the chronically sick.

The rationale for increasing prescription charges? To offset a rise in other health costs, according to then-Health Minister, Tony Ryall.

Remember also that not all medicines are subsidised by Pharmac. Many New Zealanders are about to get a nasty shock at their local Chemists.

Any bets when the TPPA will increase the cost of our medicines?

And how long before Key flip-flops again on his assurance that the cost of medicines will not rise?

Our esteemed Prime Minister has a long track record of saying one thing, and later doing the complete polar-opposite.

But at least foreign owners of our wine production will be happy. Cheers!

-Frank Macskasy

 

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[address & phone number supplied]

Acknowledgement for info on wine-production ownership: E-clectic

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References

Fairfax media: No increased medicine costs under TPPA

Fairfax media: How the land lies in foreign hands

NZ Herald:  PM warns against Kiwis becoming ‘tenants’

Fairfax media:  Prescription cost to rise to help pay for Budget

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Letter to the editor – More useless reassurances from our Dear Leader

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Frank Macskasy - letters to the editor - Frankly Speaking

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from: Frank Macskasy <fmacskasy@gmail.com>
to: NZ Herald <letters@herald.co.nz>
date: Wed, Jul 29, 2015
subject: Letter to the editor

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The editor
NZ Herald

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Admissions by our esteemed Prime Minister that the TPPA will impact on Pharmac’s ability to source cheap, generic medicines from overseas, are deeply troubling.

On 25 July, Trade Minister, Tim Groser, said;

“…yes, I can guarantee that we’ve made it absolutely clear that we are not going to dismantle the fundamental of Pharmac. The provisions that guarantee affordable medicines – we don’t want to change the system of health we’ve got in our country so that people can get medicines only if they can afford it. We’ve got a very good system, and we’re not going to let any trade agreement interfere with that.”

Three days later, Key conceded;

“That means the Government will have to pay for the original drug rather than the generic for a little bit longer. But for consumers that won’t make any difference because, you know, on subsidised drugs you pay $5 for your prescription so the Government may incur slightly more costs there.”

It is not the government that ” will have to pay for the original drug rather than the generic for a little bit longer”. That honour falls on the taxpayer.

Those extra costs may be reimbursed by the government – at the expense of other health services which will see their budgets slashed. National has a track record of shifting money around in the Health Budget.

Will National increase prescription charges again, as they did in 2013? Increasing prescription charges from $3 to $5 hit poor families the hardest.

The secretive nature of negotiations have proven that there was good reason to be suspicious of the TPPA.

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-Frank Macskasy

 

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[Address and phone numbr supplied]


 

References

Radio NZ:  TPP – Key admits medicine costs will rise

TV3: The Nation – Transcript – Trade Minister Tim Groser

Previous related blogposts

Children’s Health: not a high priority for Health Minister Tony Ryall

 


 

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TPPA-cartoon-558x400

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Letter to the editor – More reassurances from our esteemed Dear Leader?

29 July 2015 3 comments

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Frank Macskasy - letters to the editor - Frankly Speaking

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Listener <letters@listener.co.nz>
date: Wed, Jul 29, 2015
subject: Letter to the editor

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The Editor
The Listener

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Recent admission by our esteemed Prime Minister that the TPPA will likely see an increase in pharmaceutical costs for Pharmac is both disturbing but unsurprising. The secretive nature of the TPPA negotiations hinted at a “sting in the tail” that would impact on our healthcare.

On 25 July, Foreign Trade Minister, Tim Groser, promised hand on heart in an interview on ‘The Nation’;

“…yes, I can guarantee that we’ve made it absolutely clear that we are not going to dismantle the fundamental of Pharmac. The provisions that guarantee affordable medicines – we don’t want to change the system of health we’ve got in our country so that people can get medicines only if they can afford it. We’ve got a very good system, and we’re not going to let any trade agreement interfere with that.”

But only three days later, Key conceded;

“That means the Government will have to pay for the original drug rather than the generic for a little bit longer. But for consumers that won’t make any difference because, you know, on subsidised drugs you pay $5 for your prescription so the Government may incur slightly more costs there.”

Key’s assurances are questionable.

It should be pointed out that it is not Government that “will have to pay for the original drug rather than the generic for a little bit longer” – it is the taxpayer.

That extra cost for medicines will have to come from the Health Budget and one has to ask what will be cut back? Hip operations for the elderly? Grommets for children? Eye cataract surgery for the blind? National has a track record for shifting money from one area of healthcare to another, to appear as if funding has been “increased” for the lucky recipient.

Or will National simply increase prescription charges to cover increased pharmaceutical costs for Pharmac? National has already increased prescription charges from $3 to $5 in 2013 – a move that impacted on the sickest, poorest, and most vulnerable in this country.

Not for one moment do I accept Key’s assurances on this issue. He has gone back on his word before, and I expect him to do it again.

-Frank Macskasy

 

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[address and phone number supplied]


 

References

Radio NZ:  TPP – Key admits medicine costs will rise

TV3: The Nation – Transcript – Trade Minister Tim Groser

Previous related blogposts

Children’s Health: not a high priority for Health Minister Tony Ryall


 

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toby morris - tppa - cartoon

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Letter to the Editor: Kiwi style or American style?

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old-paper-with-quill-pen-vector_34-14879

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FROM:       "f.macskasy" 
SUBJECT:     Letters to the editor
DATE:        Wed, 14 May 2014 23:59:33 +1200
TO:         "Dominion Post" <letters@dompost.co.nz> 

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The Editor
Dominion Post

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I am dumbfound. Absolutely gobsmacked.

With New Zealand's sovereign debt now around $60 billion (as
at November 2013) and having increased by $27 million a day
since National took office - John Key is kite-flying with
suggestions of further tax cuts?!

Is this how National exercises fiscal responsibility -
bribing voters with yet more unaffordable tax cuts?

Previous tax cuts in 2009 and 2010 were paid for with assets
sales; taxing children on their paper rounds; increasing
prescription charges; as well as unsuccessful  attempts to
tax carparks and cellphones. Currently, National is planning
to sell off 5,000 State houses that were once homes to
low-income families.

Instead of tax cuts, New Zealanders might care to tell the
Prime Minister that we should be funding education so that
parents don't have to fork out  $357 million a year in
so-called "voluntary donations" and spend long hours 
fundraising to pay for  supposedly "free" schooling.

It is patently simple. We can have free education and public
healthcare. Or we can have tax-cuts. But we cannot have
both. 

This is the moment we decide whether we want public services
for all New Zealanders, regardless of their financial
circumstances - or an American-style user-pays.

I hope we choose wisely.


-Frank Macskasy
[address & phone number supplied]

 

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References

NZ Herald:  Parents fundraise $357m for ‘free’ schooling

Fairfax media: Public debt climbs by $27m a day

Radio NZ: PM John Key dangles tax cut carrot


 

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Skipping voting is not rebellion its surrender

Above image acknowledgment: Francis Owen/Lurch Left Memes

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“You Break It, We Fix It” – Is That How It Works?

13 January 2014 6 comments

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It all began in 1984…

But first, let’s look at the Governor-General, Sir Jerry Mateparae’s 2014 New Year’s speech,

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"As a nation, and as communities, we need to both celebrate our successes, and examine how we can help those families facing particular difficulties, so every child can grow up in a safe and secure home."

As a nation, and as communities, we need to both celebrate our successes, and examine how we can help those families facing particular difficulties, so every child can grow up in a safe and secure home.”

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My initial reaction upon hearing this statement from the Governor General was, thank god that the issue of deprivation facing children in our country is finally ‘trickling up’  the coridors of The Establishment.

It’s not like we haven’t been banging on for the last few years about the problems confronting us with child poverty; increasing inequality; homelessness; unemployment, under-employment; the growing wage-gap with Australia; etc, etc; etc; etc…

Once upon a time, New Zealand was one of the most equal societies on this planet. And we took great pride in that fact.

But then, something happened. Something disastrous which we were aware of; initially viewed with alarm; and then, like the frog in the pot of water steadily heating up, we got used to it.

We got Rogernomics.

Later followed shortly thereafter by the nastier, “crack-cocaine” version referred to as “Ruthenasia”.

From there, despite all the rhetoric and promises of wealth “tricking down”, things got worse. Much worse.

Sir Jerry’s speech was duly reported in the Otago Daily Times on 1 January;

The release of Children’s Commissioner Russell Wills’ report into child poverty in December found a quarter of Kiwi children were under the standard 60 per cent income poverty line, of which, 10 per cent were in severe and persistent poverty.

The report also highlighted the links between the lack of affordable housing and the preventable diseases spread through overcrowding.

Sir Jerry said while the structure and dynamics of New Zealand families had changed, the desire of parents to raise their children in a caring, loving environment had not.

“I often hear people say that everyone should have a New Zealand childhood.

“The care we provide to our most vulnerable citizens – our children – is a barometer of the wellbeing of our families and our society.”

But not all families could cope with the “inevitable challenges” life threw at them, Sir Jerry said.

IBID

Perhaps families could have coped better had National – not “life” – not thrown these challenges at them;

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English confirms big ACC levy rise likely

Source

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Note how only a month after being elected into office, National was already spinning the public meme that Labour was to blame for the consequences of National’s impending ACC levy-rises? Such would be National’s modus operandi for the following years; everything blamed on the previous Labour government; accept no responsibility whatsoever.

If National wins a third term in office this year (unlikely), will they still attempt to use Labour as a scapegoat for their unsuccessful policies?

In the meantime, National continued their policy of raising government charges and taxes,

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Budget 2010 - Income tax slashed, GST to 15 pc

Source

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English’s promise that income tax cuts would be “more than offset the rise in GST” ended up  hollow when more government charges were further raised;

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Tax hikes disguised as `reinvestment'

Source

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Yet more indirect tax rises were forthcoming;

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Petrol prices creep higher

Source

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And cuts to funding for social services. Again, children were targetted;

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Hundreds march over early childhood cuts

Source

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And hefty user-pays charges implemented and increased;

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Vulnerable children at risk from Family Court fees increase

Source

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With perhaps this, being the most odious and damaging of all to struggling low-income, poor families;

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Prescription fees increase

Source

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Although NZMA chair, Paul Ockelford, asserted that prescription charge increases were “unlikely to be a barrier for most”, that statement appears to be the kind of arrogant, self-delusional nonsense that people out of touch with reality readily express amongst polite company, at well-laden dinner tables, of the tut-tutting affluent classes.

As writer, Herman Melville pointed out,

Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well- warmed, and well-fed.”

Reality away from the likes of  Mr Ockelford’s genteel circle  is much different, and grimmer;

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Pharmacies carry debt for prescriptions

Source

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From the above Herald story,

Nikki Turner, who works as a GP in Wellington as well as sitting on the Child Poverty Action Group, said any assumption that the $2 increase was a minor issue was not looking at the bigger picture.

“For a lot of people that’s fine, but for many people there are a lot of barriers to access to primary health care.”

New Zealanders on lower incomes, particularly those with large families or complex medical problems, would find the hike in prescription costs as another barrier.

“We know from the Ministry of Social Development’s own data on severe and significant hardship that many families don’t pick up prescriptions because of costs. If they’ve got a small amount of money left over, then prescriptions will go or they’ll delay picking them up,” she said.

Source

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And remember – National presided over two tax cuts in 2009 and 2010. Cuts which benefitted the highest income earners in the country.

It is abundantly clear that those tax cuts were paid for by massive borrowings; state asset (partial-)sales; raising GST; cuts to funding for  state services; and raising user-pays charges for other State services (often for the most spurious reasons).

In simple, easy-to-understand-terms, low and middle income earners (but especially those on low and fixed incomes) ended up paying for tax cuts for the rich,

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Tax cuts - High earners set to benefit most

Source

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This is what National does.

In the meantime, unemployment is still at 7.1% and – according to the Children’s Commissioner, in his first Child Poverty Monitor – child poverty has dramatically worsened,

The 2013 Monitor shows that one in four Kiwi kids are growing up in income poverty and one in six are going without the basic essentials like fresh fruit and vegetables, a warm house, decent shoes and visits to the doctor. Ten percent of children are at the hardest end of poverty and three out of five kids living in poverty will live this way for much of their childhood.

[…]

Children’s Commissioner Dr Russell Wills says the project is about giving New Zealanders the full picture on child poverty rates and to get Kiwis talking about it.

“265,000 New Zealand children are living in poverty. Is this what we want for our kids?

[…]

The Child Poverty Monitor is funded by the J R McKenzie Trust, an organisation with a long history of involvement in important social issues. The Trust’s Executive Director Iain Hines says they initiated this project because they saw an opportunity to make a difference for children missing out.

“We are concerned that the rate of child poverty in 2013 is twice that of the 1980s. We think this is unacceptable. If New Zealand’s road toll was twice that of the 80s there would be outrage and immediate action taken to reduce it. We need the same momentum and action on child poverty.

It is mind-boggling that we have arrived at a state of affairs where child poverty is increasing each year – and successive governments seem unable/unwilling to tackle it.

To our shame, governments seem more interested in throwing money at multi-national corporations and yacht races rather than the nation’s children – our future.

National, in particular stands guilty of inaction.

This was clearly highlighted when it was revealed that the Children Commissioner’s report was funded by a private organisation, the J R McKenzie TrustKey’s government refused point-blank to fund the investigation and subsequent report. Instead, the cost – $500,000 – was paid by the Trust.

By contrast, National found it easier to hand out corporate welfare such as $30 million to the Rio Tinto private aluminium smelter. Or millions to the Rugby World Cup tournament. Even Southern China Airlines got a $4 million tax-paid hand-out, courtesy, National.

One thing is for certain – Dr Russell Wills should not be expecting to be re-appointed Children’s Commissioner when his term is up. Not if the Nats are still in office by then.

Just to remind the reader, in his speech, Sir Jerry said,

“But not all families could cope with the “inevitable challenges” life threw at them.”

Source

Unsurprisingly, I take great exception to Sir Jerry’s comments. It is not “life” that is throwing “challenges” at New Zealand’s families: it is successive government policies and inaction. And nor are they “inevitable”. The sun rising every day is inevitable – government policies are not.

Polices such as these have been carefully planned for years prior to National winning the 2008 election and  have been methodically and unscrupulously executed with deliberate  intent to further an agenda of gradual “transformation” to a user-pays, low-tax, minimal-State economy.

It is shameful and sickening that Sir Jerry now laments that  “not all families could cope”. Once again, those at the bottom of the socio-economic heap are blamed for their precarious position. Unfortunately Sir Jerry, not all of us can live at the Governor-General’s residence at tax-payers’ expense.

Some families, however, can cope better than others,

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The NBR Rich List 2013 - The Rich Continue to Get Richer

Source

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Perhaps equally galling is that even while our social problems worsen and poverty increases, people like John Key and Bill English continue to insist that things will, eventually, get better.

John Key in January 2008,

“This is a great country.  But it could be so much greater.  It has been so much greater. 

So the question I’m asking Kiwi voters is this:  Do you really believe this is as good as it gets for New Zealand?  Or are you prepared to back yourselves and this country to be greater still? National certainly is.

[…]

National knows New Zealand has a great future if we embrace good ideas and put them into action. And my sense is that in 2008, New Zealand is ready for those new ideas – ready for a fresh start.

At this election, the National Party has the chance to harness the growing mood for change and march New Zealand towards a better tomorrow.

We know this isn’t as good as it gets.  We know Kiwis deserve better than they are getting.  We are focused on the issues that matter and we have the ideas and the ability to bring this country forward. 

National is ambitious for New Zealand and we want New Zealanders to be ambitious for themselves. “

Five years later, John Key, in December 2013,

“I am passionate about the future of New Zealand, and I’m in politics to make a difference for the better of our society.

By 2038, young people of today will be our leaders – whether it be in politics, business, academia, education, sport or arts.

They will guide the values, principles and direction of the country in years ahead.

One thing I’m sure of is while we will still be a young country, we will be a more confident multicultural country than we are now, a country that was built on a bicultural foundation. And today’s young people will help guide that future.

From the calibre and talent I see in our youth today, there is cause for real optimism about the years ahead.”

According to Key and other right-wing politicians, we just have to keep persevering with their policies.  So that, sometime in the future, things will “get better”.

Even as they get worse.

Getting worse since 1984…

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Hungry kids scavenge pig slops

Source

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This blogpost was first published on The Daily Blog on 6 January 2014.

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References

John Key:  A Fresh Start for New Zealand

Otago Daily Times: English confirms big ACC levy rise likely

Scoop media: Government delivers April 1 [2009] tax cuts, SME changes

NZ Herald: Tax cuts: High earners set to benefit most

Dominion Post: Petrol prices creep higher

NZ Herald: Budget 2010: Income tax slashed, GST to 15 pc

Dominion Post: Tax hikes disguised as `reinvestment’

Sunday News: Hundreds march over early childhood cuts

NZ Herald: Govt borrowing $380m a week

Scoop media: Vulnerable children at risk from Family Court fees increase

Statistics NZ: 2013 Census QuickStats about national highlights – Work-Unemployment

NZ Herald: Prescription fees increase

Radio NZ: Pharmacies carry debt for prescriptions

Otago Daily Times: Governor-General urges Kiwis to care for children

Radio NZ: Challenge to help vulnerable families

Fairfax media: Govt pays $30 million to Tiwai Pt

Scoop media: NZ’s first monitor of child poverty released

Scoop media: Wellington philanthropic trust helping with survey of child poverty

Scoop media/NBR: The NBR Rich List 2013: The Rich Continue to Get Richer

NZ Herald/John Key: Kids of today offer bright future for NZ

Fairfax media: Hungry kids scavenge pig slops

Additional

Facebook: Inside Child Poverty New Zealand

Facebook: Child Poverty Action Group (CPAG)

Scoop media: Inequality keeps rising, says UC social research expert

Previous related blogpost

A Blighted Future – the price of an apple

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Dear Leader; prescriptions, airline taxes, and priorities

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Frank Macskasy Blog Frankly Speaking

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Continued from: National prescribes bad medicine for the poor

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Whacking the poor and bashing the benes…

National thinks nothing of raising prescription charges, from $3 to $5. As Dear Leader has assured New Zealanders, the poor have nothing to fear about more expensive medication.

John Key, with an estimated value of $55 million, of course understands what it’s like for the poorest in our society to pay for healthcare.

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prescription-charges-to-go-up Frank Macskasy Blog Frankly Speaking

Full Story

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Frank Macskasy Blog Frankly Speaking pm-says-low-income-earners-will-benefit-from-health-improvements

Full Story

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Once upon a time, prescriptions used to be free of charge. Then a “part charge” of 50 cents per prescription was introduced during the 1980s/90s  neo-liberal “reforms”.

The argument was that everyone could afford 50 cents.

Then the charge was raised to $3 per item.

Now National will raise it to $5.

This is what is colloquially known as The Slippery Slope. The Slippery Slope is where a governments wants to implement a certain policy – but knowing that it will be highly unpopular, will introduce it gradually, in small increments.

Fifty cents. $3. $5. Next – ?

Meanwhile…

Key is up in arms about the Australian government’s plans to increase it’s airport departure tax from A$8 to A$55, per traveller.

See:  Travel chiefs declare war on airline tax

Evidently, according to one of Dear Leader’s  spokespeople, Key  “would raise the matter with Julia Gillard “shortly”.”

It’s reassuring to know that John Key takes his Tourism portfolio so seriously. This is a vital issue.

After all, no unemployed person; solo-parent; part-time worker on the minimum wage; or superannuitant wants to be distracted from their re-budgetting, to take into account more expensive medicines,  by the worrisome issue of  tourists facing higher airport charges.

Thankfully, Dear Leader is on the job.

John Key knows what his priorities are.

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Postscript

In a previous blogpost, National prescribes bad medicine for the poor , this blogger stated that tax cuts must inevitably result in reduced services and/or increased User Charges,

Common sense will tell even the most die-hard National groupie that if you reduce revenue, then one  has to cut expenditure and services; borrow to make up the shortfall; raise  user-charges; or all three. There ain’t no other way.”

Dear Leader has confirmed this by saying that because National was planning  a “zero Budget” (aka Black Budget), that would result in  “either an increase in charging or a reduction in expenditure“.

Key has stated that we should expect more increases in User Charges.

Message to National Party supporters and voters:  still enjoying your tax cuts?

See:  Opposition attacks prescription charge hike

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