by Metiria Turei
Social Development Minister Paula Bennett’s miserly sop to sole parents trying to get an education is just another slap in the face.
It was bad enough that Paula abandoned her own community when she scrapped the Training Incentive Allowance. Now this new $500 loan is an insult to all those men and women who struggle everyday to care for their kids and work hard to make a better life for them.
Last week, the Children’s Health Social Monitor showed that inequality in New Zealand is creating serious health issues for children who are the most economically vulnerable (see our question on this in the House):
In New Zealand, many child health outcomes exhibit a social gradient, with hospital admissions and mortality from socioeconomically sensitive conditions being several times higher for Māori and Pacific children, and those living in the most deprived areas.
For sole parents in a recession, education is the obvious choice when part time jobs are scarce. Getting a higher education increases the likelihood that a person will earn better.
This makes access to higher education by benefit recipients even more critically important for their children who are the most at risk from poverty related illness and hardship.
Now is the time to support these parents into education, in a way that helps mitigate the worst poverty.
This should include higher levels of support to reduce the student loan burden. Even with the Training Incentive Allowance sole parents tend to need a student loan at some level, but with the TIA reinstated, they wouldn’t have to borrow so much. Keeping debt to a minimum is a key means to reduce income disparity so that those families have the best possible chance of long term economic stability.
Statistics New Zealand released figures today showing that the number of students who borrow for their education is increasing and the average individual debt has increased to nearly $15,000.
None of this is news to Paula. She herself lived through this so she knows both the facts and the experience. But what is her response?
To send sole parents out to (some imaginary) work, loan them a miserable $500, and turn a blind eye to the increasing level of debt these most vulnerable families will have to enter into just to bridge the gap.
For all her rhetoric, Paula is leaving our must vulnerable children in poverty, illness and hardship. This is disgraceful from a Minister of Social Development who stakes her personal reputation on her commitment to “her people”.
Published in Environment & Resource Management | Featured by Metiria Turei on Wed, December 2nd, 2009
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on the trolls and those who are unable to keep on topic
Where’s the money going to come from?
Sell some more sovereignty to overseas creditors?
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Those on the right wing have been using the “we can’t afford it” excuse forever. They really need to come up with some new material.
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Why are we borrowing $250m a week, then?
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You may wish to stick your head in the sand, those who can read the balance sheets and budgets from treasury say this expenditure bubble is going to burst.
Why does one need to “come up with new material” when you cant even grasp the treasury reports.
And why are we borrowing $250M per week in your opinion?
And where are the cashflows to pay it back plus 5.5% interest?
When you answer those question you then may ask why the “cant afford excuse” is no longer applicable.
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You may also have a look at the budgets and treasury forecast and see where the ETS payments are.
Not budgetted for.
So will you borrow some more from your childrens children to pay for that?
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Yep, rimu, I’d be a wealthy man if I had $100 for every time I’ve seen “Where’s the money coming from” in the comments threads here.
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Why is asking “where is the money coming from” not a valid question when people propose spending money that we don’t have?
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Gerrit: I wasn’t suggesting that business as usual is sustainable. I am excruciatingly aware that it is not, and in a far bigger way than the economic one.
Current economic problems don’t automatically mean that society’s most vulnerable must tighten their belts though (that’s your ideology jumping to that conclusion) – how about we build less prisons, build less roads, tax capital gains on property, let less corporations get away with paying no tax, tax pollution instead of income (I could go on), for starters?
This is just off the top of my head. I’m not even trying, why would I this is just a comment on a blog… I’m just doing it to demonstrate how completely useless, waste of space and uncreative bleating about “oh how on *earth* will we afford it” is.
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Hidden due to low comment rating. Click here to see.
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How many people are in prison because of drug offences, anyone know?
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Hidden due to low comment rating. Click here to see.
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Hidden due to low comment rating. Click here to see.
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The funding for rehabilitation is crucial. It is that which allows the usage of drugs to actually drop bellow the prohibition rates. We can build the cost of such rehabilitation into drug sales. Thus, the legalization of drugs becomes a net payer of tax despite the health and rehabilitation costs.
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No problem at all with what you are suggesting to increase the tax take and try and balance the books.
So lets see them in the budgets. And therein lies the problem. We dont have them.
As a centrist (can we be from that persuasion?) I dont like either the left or right with their wealth distribution policies that do nothing to create wealth to enable bigger distribution.
Both the left (Labour) and the right (National) keep on borrowing like there is no tommorrow for our childrens children.
Curse on both their houses.
Not long till this whole house of cards called borrowing falls over OR we have to pay it back by digging up minerals to sell.
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Careful, Sap. You’re sensible approach is sure to run afoul of bb’s red neck.
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Valis,
If I was careful I would never post anything. I already refrain from posting in support of policies I actually agree with (there is no fun in doing so
).
Pretty much everything I post runs afoul with a substantial body of posters as a result of its sensible nature. Sense and ideology do not mix well.
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Valis I would be careful about describing Sapients reasoning as sensible, you do not know where that word has been, it’s not derived from purely logical reasoning.
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The thing is Sapient takes pride in use of pure (logical) reasoning unrelated to any dependence on sensory experience which is more subjective.
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Blue Peter ever the rationalist, asks where the money is coming from and fair enough my answer is simple the capitalists!!!!
As Rimu says the capitalists who trade in speculative assets such as the real estate, futures, and the speculative currency market, hence capital gains tax!!!!!
It is not the workers who caused this recession and yet it is Natzi bitc#es like Paula Bennett who are trying to make the have nots into scapegoats.
The working people of New Zealand have every right to be very angry!!!!!!
They Have every right to take to the streets!!!!!!
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You are absolutely right Drakula about workers rights. The working people have every right to take their own risks, and are free to start their own business if they choose. Alternatively, they can also apply for jobs to work for others who choose to take risks in business, and then earn a wage. If they choose the latter, they actually are free to leave when they like, and do something about the recession themselves, instead of bitch and whinge like you.
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I feel that it is a very justifiable bitch. Dont get me wrong I don’t envy anyone who is enterprising but the speculators who caused this recession were speculating with other peoples money, using debt as collateral.
And keeping to the thread of this post the victims who want to get ahead by extending their education are denied the opportunity by a government who are representing venture capilalists.
You only have to look at the curriculum vitae of our own PM.
It seems to me that Paula Bennett is trying to walk in the footsteps of ruthless Ruth Richardson and Jenney Shipley, all trying to prove themselves as having more balls than their male budget castrators
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The state can’t micro manage peoples lives but you get around that by always giving beneficiaries the benefit of the doubt. In a mature welfare state like ours many will have adapted their behaviour so that just as we have a fair idea that if we are sick we will get looked after in hospital, people expect that the state will provide for their children (and them) should they (choose to) fall pregnant with insufficient resources to adequately support them. People also know how to milk the system; if the genuine cases are finding it hard they can blame the slack types.
Do we have any idea who is deserving and who isn’t?
What I’m getting at is that I distrust the Greens approach as it is pure left-wing (ignores moral hazard– isn’t green).
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Comprehensive Tax Reform —- Gareth Morgan
The GMI implies that every earned dollar is taxed at 25% and that nobody would effectively pay tax until they earned their first dollar over $40,000. This is integration of the tax and benefit system, so you would get rid of most if not all benefits and eliminate high effective marginal tax rates that people currently incur as their benefits abate in line with the income they earn (known as poverty traps). Assuming 3 million taxpayers, the net annual cost of this initiative would be $30bn less the cost of welfare benefits, $16bn, so $14bn. In addition the flattening of the income tax schedule to 25% (and aligning with company and trust tax rates) would cost another $3bn say so all up we need to extend the tax base by $19bn to fund this. In order to put the size of this reform in perspective, the personal income tax collect currently is $27bn.
To invoke an effective reform of the taxation and welfare system (which I hear every informed commentator saying “is broke”) we need to find a tax source of this magnitude.
http://gmi.co.nz/pages/news/188/Comprehensive-Capital-Tax.aspx
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To put it in perspective
A person living alone on Super in their family home – getting paid at the moment about $15,000 – 300 a week.
The GMI is only $200 a week. That’s a 50% cut.
And they would have to pay 1.5% annually on the value of their proprty – say $400,000 at 1.5% is $6,000 per annum about $120 a week, leaving them about $80 a week for their rates and insurance, power and food etc.
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Gareth Morgan’s prototype of a Universal Basic Income (guaranteed income with flat tax on all earned income) needs further work but is a good system. It certainly addresses the welfare mass and effective marginal tax rate faced by beneficiaries earning their way out of poverty in a labour market dominated by casualised part-time work (see issue one of Gauntlet). Morgan’s figures fail to take into account the cost of accommodation. The solution to too few having affordable secure housing has not been genuninely looked at by policy advisers. Part of the solution is rearranging the tax treatment of residential property owners who rent their property and receive the benefit of tax-payer provided accommodation supplements paid in the first instance to enters but in reality paid to the land-lords.
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Superannuation costs more than any other MSD budget item.
Student Loan (unrepaid) debt is now above $11 Billion.
And you want to have ago at the TIA allowing a $500 loan to women who have children, who have no support from the father of those children?
BTW, this is not just about women being beneficiaries who are trying to better themselves:
– it’s also about the fathers of those children, who choose to walk away and leave the mothers with all the responsibility;
– and the employers who only offer low-paid work to mothers, or don’t provide access to adequate childcare, or who gate employment in many other ways.
Gentlemen,
I fear the thread hijack on this topic has gone beyond mere “I’m-too-scatty-to-keep-on-topic” into pure misogyny.
Because what is happening here, at the MSD, is purely misogynist policy targeting, and to ignore the topic and go off-topic is to compound that misogyny.
Sorry, I don’t usually flame on this forum, but you had it coming this time.
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I second that emotion Katie!!!!!
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SPC,
If they plan to retire with a $400,000 home then they should not expect the state to be paying there way in the first place. That is a massive asset and they should eat their way through that well before they receive state payment. We simply can not afford to be paying the richest people benefits. If they are retiring they should do the whole bricks-and-mortar thing to free up money while retaining the house. Better yet, free the house up for others and move to a retirement home or a smaller, more manageable, property.
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Katie,
Agreed that super is a fairly substantial item. We really do need a lot of reform around this but the problem is the self interest of all the myopic old bastards whom happen to hold a large volume of the vote.
Yes the student debt is large. It is also irrelevant. It has every place existing.
Training incentives a great. Just so long as it goes on a loan and not a straight grant.
The parents whom abandon their partners and do not support their offspring should be made to pay a fixed amount plus a portion of income. If they can not afford this volume it should be put on a loan under their name to be paid at a latter date. They should not be able to escape from such obligations. Though, there are many cases where the mother does not name the father and that would make things more complicated in regards to state assurance of support.
~
Why should employers pay mothers with young children equally to other women? To men? It would be incredibly irrational to do so. Mothers with young children are massively more risky than a female without young children. Greater risk demands lower rates. Likewise, why would they provide such facilities when they can find someone with the same skill whom does not pose such risk and the extra cost of child care. It would be incredibly irrational to do such. It is not misogyny, it is logic. It is the profit motive. It is a result of the female body not being designed for itself but for offspring whilst the male body is designed solely for itself. Legislating provision of such would only result in greater female unemployment.
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Oh on topic then.
1. Why is there even any limit on the amount that can be borrowed by beneficiaries when they study. Why not allow them to borrow for all course related costs, as they occur.
2 The problem for most solo mothers is of course taking on further debt if they are to afford housing (paying the mortgage on their own and being dependent on maitenance being paid if they do, or save to afford to borrow to buy a house).
For the older solo mother – mostly separated/divorced/ex job, there is a relevant side issue. There should be greater focus on a new from of ex-partner support – the family home stays with the custodial parent and both share equally the mortgage payments (half the cost may be less than rent and it ensures he pays his maitenance to keep his half ownership of the property intact). This allows the solo mother asset ownership security and the children a stable home – it facilitates an easier course to study and taking on tertiary debt.
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Sapient
If you had a means test for Super and excluded those who had ownership of a family home (and $400,000 is the average value in Auckland Wellington and Christchurch) – you would have few on Super.
But you would have a huge number of people claiming the accommodation allowance on top of Super/GMI as they rented their home from a family trust. Ya know what Bill did. So it would be a GMI of 200 + about a $100 for their housing costs. The same as Super is now.
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SPC,
Bill was able to do that because the government paid it, not himself. Trust law, from memory, actually forbids such as it is treated as if you are gifting the money.
Trusts should be open to such testing, that they are not is because the rich like their little cubby-holes. You do not solve a problem in another area by making another problem; you attempt to resolve the initial problem. It seems a common thing with you that you say “But we cant do this because this problem over here would mean that in some cases this will happen. Therefore, we should make another problem instead of trying to remedy the initial one”.
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SPC,
Re: point one.
As a student I am only allowed $1000 per year for books, etc. This does not cover my books. I know many students whom do not even use the money on books but claim the whole lot and spend it on booze and then either go without the books or get them from the library. I know that two of my old flatmates used theirs to pay off interest-bearing debt. I imagine the limit is in place for beneficiaries and students to prevent this on an even larger scale.
In regards to the housing issue, it is my experience that those with houses will likely be those couples whom are married and when one partner leaves the house tends to be sold due to it being matrimonial property. While I agree with the proposal in principle, what you are effectively saying is that the other partner can not access a good body of their own money, perhaps exclusively theirs, even if they do provide proper support.
I had also thought that where this problem is greatest, among the lower social classes, renting was far more common and thus this would be largely or totally irrelevant.
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Sapient
Divorce occurs in all areas – the preponderence to rent occurs because of the sale of matrimonial property – which IMO should cease. As for the non custodial parent – their half share in the asset housing their children is still their’s and is in effect their saving for retirement – they could also borrow against this asset when buying a new home.
As for the borrowing for things such as books or transport to the place of study etc or to buy a computer (if studying on line), one could always voucher this or use evidence of receipts.
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SPC,
). The problem is the cost of checking every receipt of every individual. I would approve of a much higher limit if any amount over a certain level was required to have a receipt submitted. That should also minimise beurocracy.
Yes, they used to use receipts (in fact until they made me do it online I always just brought the receipts and then got the payment
Yes, divorce occurs amongst all classes. The point, which I though I made clear, in relation to the lower classes is that they tend to rent rather than own and thus this would have little effect amongst said classes.
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Should solo mums(or fathers) want to improve their education prospects they should be physically provided with the courses needed and the books no money is involved here and no abuse could take place and no convoluted arguments to take place in justifying how much to what and whom.
On graduation the books can be given to other students saving the carben foot print.
It is very importent that women have the best education as they are the first educators of the next generation.
A childs confidence is built or destroyed at that vulnerable stage and it is usually destroyed by the macho ego’s of the father, anger results that has to be rectified by the child and a bully is created.
From what Metiria is saying is that the government thinks it has more important things to consider than the next generation of an underclass fobbed off with a Mc Donalds education.
What do the employers want? Burger flippers or a highly skilled workforce with cereers.
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Drakula,
I agree with the first paragraph. The second paragraph could run into a bit of trouble though. Throughout my education the books I have needed seem to be replaced every year or two, thus it may be rather redundant to recycle the books at the end of a, maybe, 3 year degree; it would be of dubious effect even with a 1 year degree. Furthermore, there is substantial benefit to keeping course texts. I would much rather charge them for the books and then allow them to keep them indefinitely.
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I woonder if Dracula was aware that NZ “society” in the past via kind minded folk, posing as Chrisitans thought it best to provide the poor with soup and bread rather than the funds to buy the ingredients themselves. If NZ as a whole is to move back towards a more agalitarian society and maybe catch up on our Australian cousins through greater productivity we need the Training Incentive Allowance back in all its glory – NOT the sop Paula has come up with. The TIA allowed those training to decide how best to allocate their entitlement within parameters rather than have the nice nanny state/big brother buying the required books dictated by whoever.
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