The new British government has put out a State of the Nation Report: Poverty, Worklessness and Welfare Dependency in the UK. Their statistics are not very different from ours. While it's a bit better than similar reports from our own governments, because it recognises the complexity of 'multiple disadvantage', it still fails completely to display any real understanding of what it's reporting on. Three things stand out.
First, there has been a massive rise in inequality and poverty over the last few decades. The bottom third of people on the wealth distribution range own just 3% of the wealth.
Secondly, as usual, there is a complete absence of any discussion about changes in the UK labour market and in the global economy over the last 30 years. All the emphasis is on 'people not working' and the enormous cost of keeping them and their children alive (though certainly not healthy and well) in the absence of work. One particularly nasty graph compares the cost of 'working-age benefits' to the amounts spent on schools, defence, justice, climate change...
Thirdly, it is clearly women and children who bear the brunt of poverty and "disadvantage". Here's a 'found poem' I put together, drawn from the report.
One in ten married parents and
one in three parents cohabiting at birth
separate before the child is five years old
Women are 40% more likely
to enter poverty if they divorce
Most at risk of multiple disadvantage:
lone parents, a young mother, a black mother
working-age women without dependent children
manual, sick and disabled, never married
aged 80 years and over, living alone
At the heart of this fight
against poverty must be work
I will work to deliver
radical reforms to the welfare system
The material used in this
publication is constituted from
50% post consumer waste
and 50% virgin fibre
[Corss-posted to The Hand Mirror]
Friday, May 28, 2010
Thursday, May 20, 2010
Is this what you voted for?
If you voted for National because you wanted tax cuts, you might be pleased with today's Budget - depending on what your income is. But you may be less pleased when the consequences take effect. You need to trawl carefully through the fine print, or pay heed to some of the more astute commentators, to understand what's really going on. A few pertinent points to add to the one I made in my last post about the shonky argument that big tax cuts at the top are necesary to draw skilled professionals back to NZ:
1. The Budget does in fact reduce the tax take - and therefore, of course, restricts the amount available for essential services such as health and education, in the face of an ageing population and growing healthcare needs resulting, for example, from child poverty and our obesogenic environment. Russell Brown points out that the cost of the tax cuts "will be $1.085b in the next four years". But the "magic money" argument is that "tax cuts will spur economic growth, and therefore the economy will grow faster, and so it'll be revenue positive by 2013/14."
2. This really is a winner take all Budget. Idiot Savant does the numbers. The tax cuts come to $3740 million. The 45% (yes, that's right - almost half) of NZers with incomes up to $20,000 get just $320m of this. The 31% earning between $20K and $50K get another $807m. The 12% earning 50K - $70K get another $987m. The rest goes to the 12% earning more than that. The top 2%, those earning over $150,000, "pocket $430 million, about 11.5% of the total. This is almost exactly the amount the government has to borrow to fund this package. The people of New Zealand will be saddled with further debt to pay for the greed of the few at the top."
3. The government has made various attempts to hide the full extent of their generosity to the best-off and their incredible meanness to the worst-off. Russell Brown skewers the ludicrous claim that "Two-thirds of the tax cut goes into reducing the bottom two brackets." Well, yes - but this just means that the best-off benefit from ALL the tax cuts. "Even very high income earners have a "first $14,000" of income" - and so on through all the brackets until the top one, which gets a whole 5% lopped off. "Which is why it's stupid to talk about low brackets, and you'd only do it if you were deliberately trying to mislead."
4. If you're well-off and avoid paying the top tax rate, you will be handsomely rewarded by a tax cut which lowers your tax to the rate you were already managing to keep it down to. And then you could well be further rewarded by another big cut to the company tax rate (to 28%), so you can probably work out new ways to avoid tax. But if you're on a really low wage, the hike to GST - which you can't avoid, because you spend all your money on the stuff you really need - will mean you end up, at best, no worse off. But hey, don't be jealous! Just remember what Gordon Campbell calls the PM's "breath-taking" justification: because the rich spend more, they'll be paying more GST than you.
1. The Budget does in fact reduce the tax take - and therefore, of course, restricts the amount available for essential services such as health and education, in the face of an ageing population and growing healthcare needs resulting, for example, from child poverty and our obesogenic environment. Russell Brown points out that the cost of the tax cuts "will be $1.085b in the next four years". But the "magic money" argument is that "tax cuts will spur economic growth, and therefore the economy will grow faster, and so it'll be revenue positive by 2013/14."
2. This really is a winner take all Budget. Idiot Savant does the numbers. The tax cuts come to $3740 million. The 45% (yes, that's right - almost half) of NZers with incomes up to $20,000 get just $320m of this. The 31% earning between $20K and $50K get another $807m. The 12% earning 50K - $70K get another $987m. The rest goes to the 12% earning more than that. The top 2%, those earning over $150,000, "pocket $430 million, about 11.5% of the total. This is almost exactly the amount the government has to borrow to fund this package. The people of New Zealand will be saddled with further debt to pay for the greed of the few at the top."
3. The government has made various attempts to hide the full extent of their generosity to the best-off and their incredible meanness to the worst-off. Russell Brown skewers the ludicrous claim that "Two-thirds of the tax cut goes into reducing the bottom two brackets." Well, yes - but this just means that the best-off benefit from ALL the tax cuts. "Even very high income earners have a "first $14,000" of income" - and so on through all the brackets until the top one, which gets a whole 5% lopped off. "Which is why it's stupid to talk about low brackets, and you'd only do it if you were deliberately trying to mislead."
4. If you're well-off and avoid paying the top tax rate, you will be handsomely rewarded by a tax cut which lowers your tax to the rate you were already managing to keep it down to. And then you could well be further rewarded by another big cut to the company tax rate (to 28%), so you can probably work out new ways to avoid tax. But if you're on a really low wage, the hike to GST - which you can't avoid, because you spend all your money on the stuff you really need - will mean you end up, at best, no worse off. But hey, don't be jealous! Just remember what Gordon Campbell calls the PM's "breath-taking" justification: because the rich spend more, they'll be paying more GST than you.
Monday, May 17, 2010
No, Prime Minister - Key talks nonsense on top tax rate
Today, ahead of the Budget, John Key told reporters that cuts to the top rate of personal income tax will be part of a deliberate effort to encourage high-earning, skilled New Zealanders to stay in the country.
"Challenged in his weekly post-Cabinet press conference on the fairness of cutting top personal tax rates, Key said New Zealand could not ignore that it had lost more of its skilled people offshore than any other country in the Organisation for Economic Cooperation and Development – a proxy for the developed world.
Those people included doctors, scientists, engineers, and entrepreneurs, as well as lawyers, accountants, and other skilled professionals.
“We need those people in our economy,” said Key. “Part of what you are going to see on Thursday is a deliberate attempt to get people to stay here and contribute to the economy.”
Skilled people are leaving NZ. We need these people. We are lowering the top tax rate. Therefore skilled people will stay in NZ.
Apparently not one of the well-informed reporters present challenged the completely shonky logic of this statement, so I'll have to do it for them.
Top tax rates in Australia are 40% over $80,000 and 45% over $180,000. In Britain they are 40% over 37,400 pounds and 50% over 150,000 pounds. In France the top rate is 50% and in Germany it's 45%. These rates do not include any mandatory social insurance contributions.
So it's quite clearly not a low top tax rate that is attracting skilled professionals overseas. Nor is it very likely that a low top tax rate will keep them in NZ. It's rather more likely that this latest boost to inequality and the increased social ills that come with it will push them away.
"Challenged in his weekly post-Cabinet press conference on the fairness of cutting top personal tax rates, Key said New Zealand could not ignore that it had lost more of its skilled people offshore than any other country in the Organisation for Economic Cooperation and Development – a proxy for the developed world.
Those people included doctors, scientists, engineers, and entrepreneurs, as well as lawyers, accountants, and other skilled professionals.
“We need those people in our economy,” said Key. “Part of what you are going to see on Thursday is a deliberate attempt to get people to stay here and contribute to the economy.”
Skilled people are leaving NZ. We need these people. We are lowering the top tax rate. Therefore skilled people will stay in NZ.
Apparently not one of the well-informed reporters present challenged the completely shonky logic of this statement, so I'll have to do it for them.
Top tax rates in Australia are 40% over $80,000 and 45% over $180,000. In Britain they are 40% over 37,400 pounds and 50% over 150,000 pounds. In France the top rate is 50% and in Germany it's 45%. These rates do not include any mandatory social insurance contributions.
So it's quite clearly not a low top tax rate that is attracting skilled professionals overseas. Nor is it very likely that a low top tax rate will keep them in NZ. It's rather more likely that this latest boost to inequality and the increased social ills that come with it will push them away.
Sunday, May 9, 2010
Mother's Day - yeah, right
With my son in China and Harvey out of action, I had no illusory expectations about Mother's Day. For various completely different reasons, I was feeling a bit down by the time I set off, mid-afternoon, for a walk to the supermarket. I imagined being the target of pitying looks: "Poor thing, shopping alone, no one to do things for her today..." I should have known that was rubbish. The shop was full of mothers with one, two or three young chidlren in tow, trying to get the shopping done. They can't all have had partners doing shift work. On the local tennis court, four men were playing doubles.
Anyway, I bought myself two pink treats - smoked salmon and tinned guavas - and soon after I got home our lovely neighbour Jenn rang and said she was bringing some flowers over for me. So I invited her and Barry for a glass of wine, and we ate the smoked salmon with it, and I felt much better.
Among the sudden rash of Mother's Day items in the media, a few stood out. First, David Hill's very moving tribute to his mother in the Listener - all the more poignant because she worked in a tobacco factory (which gave its bonuses in cigarettes), and died of emphysema at 52.
Then there was the report of a survey showing that women and men have completely different perceptions of how much each of them do around the house. Men think they carry responsibility for 4.7 chores a week compared with women's 5.4. But women reckon they do 9.3 chores a week and men do 2.7. Most mothers feel undervalued and say they carry the bulk of household tasks such as laundry, cleaning, vacuuming, shopping, cookng the evening meal and looking after sick children.
The other story that really got to me was about one of the five mothers featured in the Sunday Magazine. (Doesn't seem to be on-line so I can't give the link.) This 22-year-old "housebound mum", with a three-year-old and an eight-month-old, sounded exactly the same as the flat, ground-down young mothers interviewed by Jane Ritchie in the 1960s:
"I spend every minute of the day with these kids and I would love to get away...but you're a mother. That's your job. You don't get holidays, you don't get sick days, you don't get overtime, and you don't get any pay...[my partner] has just had a fantastic guys' weekend away. Not that I'd want to stop him doing that, but why can't I do that?...Yes, I'm happy and I wouldn't trade any of my kids for the world but in the process I've given up everything that used to make me me. I have a problem finding out what I actually enjoy now."
I know there has been real change over the last forty years for lots of couples, and there are plenty of genuine parenting partnerships out there. But there are also plenty where nothing's changed, and that's awful.
Anyway, I bought myself two pink treats - smoked salmon and tinned guavas - and soon after I got home our lovely neighbour Jenn rang and said she was bringing some flowers over for me. So I invited her and Barry for a glass of wine, and we ate the smoked salmon with it, and I felt much better.
Among the sudden rash of Mother's Day items in the media, a few stood out. First, David Hill's very moving tribute to his mother in the Listener - all the more poignant because she worked in a tobacco factory (which gave its bonuses in cigarettes), and died of emphysema at 52.
Then there was the report of a survey showing that women and men have completely different perceptions of how much each of them do around the house. Men think they carry responsibility for 4.7 chores a week compared with women's 5.4. But women reckon they do 9.3 chores a week and men do 2.7. Most mothers feel undervalued and say they carry the bulk of household tasks such as laundry, cleaning, vacuuming, shopping, cookng the evening meal and looking after sick children.
The other story that really got to me was about one of the five mothers featured in the Sunday Magazine. (Doesn't seem to be on-line so I can't give the link.) This 22-year-old "housebound mum", with a three-year-old and an eight-month-old, sounded exactly the same as the flat, ground-down young mothers interviewed by Jane Ritchie in the 1960s:
"I spend every minute of the day with these kids and I would love to get away...but you're a mother. That's your job. You don't get holidays, you don't get sick days, you don't get overtime, and you don't get any pay...[my partner] has just had a fantastic guys' weekend away. Not that I'd want to stop him doing that, but why can't I do that?...Yes, I'm happy and I wouldn't trade any of my kids for the world but in the process I've given up everything that used to make me me. I have a problem finding out what I actually enjoy now."
I know there has been real change over the last forty years for lots of couples, and there are plenty of genuine parenting partnerships out there. But there are also plenty where nothing's changed, and that's awful.
Friday, May 7, 2010
Saunders vs Saunders - either way, Bennett has badly messed up
The incredible saga of Saunders vs Saunders would be hilarious if it didn't throw Paula Bennett's competence to be in charge of a major portfolio profoundly affecting thousands of lives into such severe doubt.
Gordon Campbell was the first commentator to blow the whistle publicly on exactly who Bennett had appointed to advise on welfare reform. Peter Saunders was until recently based at the far right Australian think-tank, the Centre for Independent Studies (it can be described as a kind of synthesis of the Business Roundtable and the Maxim Institute). His publications over the last ten years, almost all published by the CIS, include The Government Giveth, and the Government Taketh Away (2007), Taxploitation: The case for income tax reform (2006), and Australia's Welfare Habit - and how to kick it (2004). He is also the author of apocalyptic science fiction, and has supported the notion that class is strongly correlated with intelligence.
However, responding to questions in the House about this surprising appointment, Bennett defended it by saying, “Peter Saunders is one of many advisers. He has something to offer the group as far as international knowledge is concerned. Members can read his book, Welfare to Work in Practice, which he wrote in Australia. I do not agree with everything he said; I do not agree with everything that a number of the advisers to the group said. But we are open to listening to those views from the Welfare Working Group.”
But as a comment by "Lesley" on Campbell's piece first noted, there are two men involved in welfare research called Peter Saunders: "I saw them both presenting at the same conference about ten years [ago] – consequently the last time welfare beneficaries were in the firing line of national ministers of the crown. One presented a well argued paper based on empirical research; the other simply raved – a startling nonsensical performance made even more compelling by the spectacle of what appeared to be a foaming mouth! One Peter Saunders was a well respected Sydney policy academic; the other working for a so-called ´think tank’…"
The raving, foaming one is the one Bennett appointed. As Green MP Catherine Delahunty told the House, the book Bennett mentioned was written by the other one. This other Peter Saunders is a professor at the University of New South Wales with a track record in welfare and poverty research which would have fitted him superbly for the role allocated to his namesake. As well as Welfare to Work in Practice, his publications over the last ten years include The Ends and Means of Welfare, Coping with Economic and Social Change in Australia (Cambridge University Press, 2002); The Poverty Wars, Reconnecting Research with Reality; and (with James Walter) Ideas and Influence, Social Science and Public Policy in Australia (both published by UNSW Press in 2005). Currently an Australian Professorial Fellow working on the concepts and measurement of poverty and inequality, and on deprivation and social exclusion in Australia, he was elected President of the Foundation for International Studies on Social Security (FISS) in June 2009.
The press release put out by the government to set matters straight has to be seen to be believed. It reads:
We got the right man
Welfare Working Group member Professor Peter Saunders was chosen as an expert in his field to participate in the Group’s examination of the welfare system says Social Development Minister Paula Bennett. However, he is not the only Peter Saunders in existence. Question time in the House today saw the matter arise, with a question mark over whether the right Peter Saunders was appointed to the Group. “I can assure you, we got the right man,” says Ms Bennett.
To set the record straight about any confusion there may be over which Peter Saunders has been appointed, it may help to clarify the following. There are two men called Professor Peter Saunders. Both studied in England, both were based in Sydney Australia at the same time and both have continued to lecture on social policy and welfare and both have written a number of books on the subject.
“This clearly creates potential for mistaken identity,” says Ms Bennett.
Indeed. The mind, as they say, boggles.
There seem to be only three possible explanations for Bennett's confusion in the House.
(1) She did indeed appoint the wrong Peter Saunders as an adviser: she meant to appoint the respected academic, who was perhaps recommended by her Ministry, and would have been a completely appropriate choice, as his full list of recent publications shows. Possibly she was shown his book, and thought he had some interesting ideas. But by mistake - her own or her staff's - the invitation went to the CIS one. And no one noticed until it was too late. If this is the case, the Minister is not fit to hold her portfolio.
(2) By some difficult to imagine process, discussion of who to appoint led to an invitation being deliberately sent to the CIS Peter Saunders. (Did Rodney Hide have a hand in this decision? How else might the minister have been led to conclude that this person was an appropriate choice?) But if she did indeed intend to appoint this man, as the press release claims, she then somehow came across the book by the other one, the university professor, and made the mistake of thinking that it was written by her choice, the CIS man. (Was she perhaps deliberately given the book by the same people who recommended the CIS Saunders, and told it was by him?) If so, she is not fit to hold her portfolio.
(3) She was simply completely confused all along and never knew, until caught out, that there were two Peter Saunderses. She read one, but appointed the other, thinking they were the same person. As another blog comment said, in the House she was "passing off sane and respected research as the product of a biased ex-academic who now works [actually, did work - he's now freelancing in Britain] for a conservative think tank and writes vaguely racist fiction in his spare time." If so, she is not fit to hold her portfolio.
(See Lyndon Hood's satire for Scoop on Saunders vs Saunders at http://www.scoop.co.nz/stories/HL1005/S00042.htm )
Gordon Campbell was the first commentator to blow the whistle publicly on exactly who Bennett had appointed to advise on welfare reform. Peter Saunders was until recently based at the far right Australian think-tank, the Centre for Independent Studies (it can be described as a kind of synthesis of the Business Roundtable and the Maxim Institute). His publications over the last ten years, almost all published by the CIS, include The Government Giveth, and the Government Taketh Away (2007), Taxploitation: The case for income tax reform (2006), and Australia's Welfare Habit - and how to kick it (2004). He is also the author of apocalyptic science fiction, and has supported the notion that class is strongly correlated with intelligence.
However, responding to questions in the House about this surprising appointment, Bennett defended it by saying, “Peter Saunders is one of many advisers. He has something to offer the group as far as international knowledge is concerned. Members can read his book, Welfare to Work in Practice, which he wrote in Australia. I do not agree with everything he said; I do not agree with everything that a number of the advisers to the group said. But we are open to listening to those views from the Welfare Working Group.”
But as a comment by "Lesley" on Campbell's piece first noted, there are two men involved in welfare research called Peter Saunders: "I saw them both presenting at the same conference about ten years [ago] – consequently the last time welfare beneficaries were in the firing line of national ministers of the crown. One presented a well argued paper based on empirical research; the other simply raved – a startling nonsensical performance made even more compelling by the spectacle of what appeared to be a foaming mouth! One Peter Saunders was a well respected Sydney policy academic; the other working for a so-called ´think tank’…"
The raving, foaming one is the one Bennett appointed. As Green MP Catherine Delahunty told the House, the book Bennett mentioned was written by the other one. This other Peter Saunders is a professor at the University of New South Wales with a track record in welfare and poverty research which would have fitted him superbly for the role allocated to his namesake. As well as Welfare to Work in Practice, his publications over the last ten years include The Ends and Means of Welfare, Coping with Economic and Social Change in Australia (Cambridge University Press, 2002); The Poverty Wars, Reconnecting Research with Reality; and (with James Walter) Ideas and Influence, Social Science and Public Policy in Australia (both published by UNSW Press in 2005). Currently an Australian Professorial Fellow working on the concepts and measurement of poverty and inequality, and on deprivation and social exclusion in Australia, he was elected President of the Foundation for International Studies on Social Security (FISS) in June 2009.
The press release put out by the government to set matters straight has to be seen to be believed. It reads:
We got the right man
Welfare Working Group member Professor Peter Saunders was chosen as an expert in his field to participate in the Group’s examination of the welfare system says Social Development Minister Paula Bennett. However, he is not the only Peter Saunders in existence. Question time in the House today saw the matter arise, with a question mark over whether the right Peter Saunders was appointed to the Group. “I can assure you, we got the right man,” says Ms Bennett.
To set the record straight about any confusion there may be over which Peter Saunders has been appointed, it may help to clarify the following. There are two men called Professor Peter Saunders. Both studied in England, both were based in Sydney Australia at the same time and both have continued to lecture on social policy and welfare and both have written a number of books on the subject.
“This clearly creates potential for mistaken identity,” says Ms Bennett.
Indeed. The mind, as they say, boggles.
There seem to be only three possible explanations for Bennett's confusion in the House.
(1) She did indeed appoint the wrong Peter Saunders as an adviser: she meant to appoint the respected academic, who was perhaps recommended by her Ministry, and would have been a completely appropriate choice, as his full list of recent publications shows. Possibly she was shown his book, and thought he had some interesting ideas. But by mistake - her own or her staff's - the invitation went to the CIS one. And no one noticed until it was too late. If this is the case, the Minister is not fit to hold her portfolio.
(2) By some difficult to imagine process, discussion of who to appoint led to an invitation being deliberately sent to the CIS Peter Saunders. (Did Rodney Hide have a hand in this decision? How else might the minister have been led to conclude that this person was an appropriate choice?) But if she did indeed intend to appoint this man, as the press release claims, she then somehow came across the book by the other one, the university professor, and made the mistake of thinking that it was written by her choice, the CIS man. (Was she perhaps deliberately given the book by the same people who recommended the CIS Saunders, and told it was by him?) If so, she is not fit to hold her portfolio.
(3) She was simply completely confused all along and never knew, until caught out, that there were two Peter Saunderses. She read one, but appointed the other, thinking they were the same person. As another blog comment said, in the House she was "passing off sane and respected research as the product of a biased ex-academic who now works [actually, did work - he's now freelancing in Britain] for a conservative think tank and writes vaguely racist fiction in his spare time." If so, she is not fit to hold her portfolio.
(See Lyndon Hood's satire for Scoop on Saunders vs Saunders at http://www.scoop.co.nz/stories/HL1005/S00042.htm )
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