It has since evolved to become a government tool for equalizing incomes between the employed and unemployed and advancing other ideological goals like the financial emancipation of the female parent from the male parent.
To some degree benefits have become an alternative source of income for those uninterested in the obligations and constrictions involved with being employed. Those who disagree with that statement argue nobody would willingly choose to live on a meagre benefit income.
That may hold water for single people. But the latest incomes monitoring report from MSD shows a couple on a benefit with two or more children receives over $800 weekly after housing costs. Additionally,
In real terms, total incomes after housing costs of people supported by main benefits were, on average, 43% higher in 2022 than in 2018.
Which brings us to the gap between income from benefits and income from work.
Click image to view
Until 2016 wage growth outstripped inflation hence the growing gap. Since 2019 benefits have been indexed to wages. Previously they were only indexed to inflation. Accordingly, the report notes the 2022 "main benefit increases reduced the gap". That is, income from work became less attractive.
As well,
...there are still reasonably poor financial incentives to increase the level of hours worked for many low-income families. This is because when earnings increase, their income support payments are withdrawn relatively quickly. High childcare costs and low take-up of in-work assistance can also have a negative impact on financial incentives to increase hours of work.
Little wonder worker shortages are endemic.
So, the income support/benefit system is contributing negatively to the economy in that regard.
But worse, it is being used by the Prime Minister to achieve her primary goal of reducing child poverty.
According to the report, using Labour's chosen measures which show percentage drops since 2017, she has been successful in this endeavour.
What is omitted from this report is the increasing number of children reliant on benefits.
Click image to view
Is this increase a reasonable trade-off for reducing child poverty? If the higher incidence of neglect and abuse for children growing up on a benefit is acceptable, then the answer is yes.
I disagree. The increase may even be described as the exploitation of children to make the Prime Minister look good. There is no reason why the welcome downward trend for state-dependent sole parents would have reversed bar financial encouragement.
Another finding from the report throws a further spanner into the works for redistributionists.
Asian households feature the lowest percentage of children experiencing material hardship - around 4% compared to the Pacific rate of around 24%
And yet when it comes to income support:
Eligible families with Asian parents had low estimated take-up in recent years. The late 2010s was a period of rapid growth in the Asian population of Aotearoa New Zealand. Low awareness, uncertainty about entitlements, administrative, personal and cultural barriers to claiming, or reluctance to claim payments among recent migrants may be factors explaining the trends.
So the benefit system cannot be credited with low Asian hardship. Something else is protecting their children. Probably the self-reliance and work ethic of their parents.
The government can fiddle all it wants robbing Peter to pay Paul under the guise of 'fairness and equity'. But the downsides to this interference are corrupting incentives which will continue to blight New Zealand's future.
Lindsay Mitchell is a welfare commentator who blogs HERE.
Which brings us to the gap between income from benefits and income from work.
Click image to view
Until 2016 wage growth outstripped inflation hence the growing gap. Since 2019 benefits have been indexed to wages. Previously they were only indexed to inflation. Accordingly, the report notes the 2022 "main benefit increases reduced the gap". That is, income from work became less attractive.
As well,
...there are still reasonably poor financial incentives to increase the level of hours worked for many low-income families. This is because when earnings increase, their income support payments are withdrawn relatively quickly. High childcare costs and low take-up of in-work assistance can also have a negative impact on financial incentives to increase hours of work.
Little wonder worker shortages are endemic.
So, the income support/benefit system is contributing negatively to the economy in that regard.
But worse, it is being used by the Prime Minister to achieve her primary goal of reducing child poverty.
According to the report, using Labour's chosen measures which show percentage drops since 2017, she has been successful in this endeavour.
What is omitted from this report is the increasing number of children reliant on benefits.
Click image to view
Is this increase a reasonable trade-off for reducing child poverty? If the higher incidence of neglect and abuse for children growing up on a benefit is acceptable, then the answer is yes.
I disagree. The increase may even be described as the exploitation of children to make the Prime Minister look good. There is no reason why the welcome downward trend for state-dependent sole parents would have reversed bar financial encouragement.
Another finding from the report throws a further spanner into the works for redistributionists.
Asian households feature the lowest percentage of children experiencing material hardship - around 4% compared to the Pacific rate of around 24%
And yet when it comes to income support:
Eligible families with Asian parents had low estimated take-up in recent years. The late 2010s was a period of rapid growth in the Asian population of Aotearoa New Zealand. Low awareness, uncertainty about entitlements, administrative, personal and cultural barriers to claiming, or reluctance to claim payments among recent migrants may be factors explaining the trends.
So the benefit system cannot be credited with low Asian hardship. Something else is protecting their children. Probably the self-reliance and work ethic of their parents.
The government can fiddle all it wants robbing Peter to pay Paul under the guise of 'fairness and equity'. But the downsides to this interference are corrupting incentives which will continue to blight New Zealand's future.
Lindsay Mitchell is a welfare commentator who blogs HERE.
7 comments:
It's a fine line between giving people enough to live on when they genuinely can't find work, and giving them so much that working becomes unattractive and unnecessary.
This government has definitely crossed that line. As evidenced by the huge numbers claiming Job Seeker Benefit, while not even required to seek for a job. And, not included in the unemployment statistics, which is clear evidence of government manipulation of statistics to make them look better than they are.
That is nonsense! But classic Jacinda. Incompetence masked by corruption.
Hence the shortage of workers everywhere. And we can't blame Covid for that!
No-one has the right to rely on others to support their chosen lifestyle.
We need a strong government to introduce the withdrawal of benefits outside of a settled payment designed to protect only those who have a genuine and certifiable need for public support.
New Zealand is like a dog badly in need of an effective flea treatment.
In NZ, " rights " are mentioned ad nauseam..... but the "obligations" which always go with the former are evoked much less often.
I trust Lindsay's information is reaching an audience vastly greater than BV. The msm never seem to pick up on such info. Similarly I have seen no mention in the newspapers of the recent breath taking Platform interview of a Mongrel mob thug whose thinking represents that of many maori. All seems to me far more newsworthy than the latest on Venus Williams.
Maori and pacifica are disproportionately represented in welfare. I have a letter from a distant little educated labourer relative who landed at Nelson on the first ship, 1840. The NZ Co failed and he had to work for years as a sawyer (timber cutter, using hand saws) His observation in a letter; "maori do not understand work". For those not blessed/cursed with the colonist instinct to advance and progress, to enjoy the latest, to acquire status through apparent wealth, and to establish a legacy, work is an irrational exercise unless essential for existence. The latter is no longer the case. Many maori clearly have this sussed. The life of a solo mum , provided with a nice modern maintained state house, with a basis and time for a circle of associates, is vastly preferable to that of a solo woman drudging as an hotel cleaner or somesuch 40 plus hours a week (plus travel time).
Ditto for males . If they can attach to a fecund female the provided housing and income is such that the tedium of some laborious manual job can be avoided. And much more time made available for larking, smoking and marauding with the boys.
Thanks for the excellent column Lindsay, and also to those very pertinent comments above. As the saying goes, "idle hands are the devil's playground" and the growing overt crime is just another indictment of a broken system. It's long overdue for a major overhaul and reset, as there should be a great deal fewer instances of 'a free lunch' and the comment about "obligations" is so true.
Hunter-gatherers like pre-European Maori did not work in the modern sense. They hunted for food, tried to keep warn in their rough living quartersm and went to war. Their life was their work. This has become a problem in all post hunter-gatherer societies in that work is in many cases completely divorced from life. But this exlains why in the past Maori did not "understand" work. They should have got used to it in 200 years. If they want to go back to the hunter-gatherer liefstyle, don't expect cash from the government as well
Is there no time limit to the dole? Surely 6 months full payment, followed by another 6 months of 50%, then zero, would encourage job seeking or other enterprise. No way should it be a lifestyle choice.
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