Juking the Welfare Stats Again

Last week the government’s major initiative to combat child poverty (a paltry $25 increase) was exposed for what it is, a lie. The Government, through the Budget this year, claims to be engaging in the child poverty debate, but instead, time and time again, their rhetoric is being exposed as overblown. The Government knows there is a serious problem with child poverty in this country, but is playing a political game instead of addressing the issue directly. Juking the statistics is not good enough, and three occasions in the last week have really hit home to me.

First, official advice to the Government proves what the Green Party has been saying all along, that you cannot solve poverty without addressing low income. They were explicitly told that their increase to parental benefits would not make a real difference to child poverty. Despite this information the Government’s Budget15 PR was all about addressing child poverty.

 Second, the Government, when challenged on the need to increase the Working for Families family tax credit (a tax credit that is available to low income families regardless of whether they’re on a benefit or working 20 hours a week), responded by saying they will be increasing this by $24.50. Here’s a comment on this from economist Susan St-John:

“The $24.50 has NOTHING to do with the Family Tax Credit. The Family Tax Credit goes to all low income children on the same basis. The $24.50 does not- it is a combination of an increase to the In Work Tax Credit and the Minimum Family Tax Credit- these are NOT accessible to those low income families not fulfilling the minimum hours of work and off benefit criteria.” Further “the changes that might give $24.50 extra a week affects only 4000 families at the most and have a fiscal consequence of only $1.8m.”

How confusing for the public. Who do we believe? Well, not the government it turns out.

Third, the Government put out a release boasting of how many less people are receiving a benefit, as if their welfare reforms have been successful. “I’m pleased to see the strong downward trend is continuing as Work and Income supports more people into work,” Mrs Tolley says. I imagine most New Zealanders would read this and think more people are getting jobs and going into study. Sadly that’s not the case. Benefit numbers from the Government show that although fewer people are receiving welfare, the number of cancelled benefits as a result of “Obtained Work” has also dropped. The numbers who got jobs the first half of 2015 has dropped by 1,355 people compared to the same period last year. The number of people going off to study also dropped. Check out my press release about it here.

The government has introduced a severe sanctions regime, reduced additional support and increased obligations on beneficiaries. There is a very real social cost of these policies that the government has argued can be justified because they will get people into work and improve their circumstances. The actual statistics show they’re not getting people into work or study and are a major contributor to child poverty and hardship.  Government needs to review its punitive approach to benefits and invest in job creation. Merely juking the statistics on child poverty falls well short of an approach I would hope a Government would take.

4 Comments Posted

  1. The current economic model must produce poverty.

    Unless this is faced squarely then discussion of the consequences becomes just a diversion,

    Those benefiting from the short term extraction of wealth from the community and environment will fervently resist a restructuring necessary to reconcile poverty, in a land of plenty.

    Long term we will see and increase in poverty across a broader spectrum and environmental damage will diminish returns of wealth.

    The ponzi economy and arguments based on accepting economics of extraction and exponential division of wealth are a ridiculous basis for future planning.

  2. I’ve become more convinced recently that the thing we should be most concerned with is fuel poverty. This is killing people. And it is something that we could fix, and is an easy fix, given a bit of political will. Taking away fuel cost pressures from low income households would remove the need to trade off food for heat, which is a terrible choice to have to make, as both choices lead to poor health outcomes.

  3. Given this posting is about statistics, it interests me that in the year 2010/2011 in the UK, there was a significant decrease in child poverty, as measured by the mechanism that the Green Party think is the correct measure to use, the 60% of median income. Of course, the reason for the drop was nothing to do with any impact on child poverty whatsoever, it was entirely due to the median income dropping due to the GFC.

    We’re a rockstar economy, so we’re told: our median incomes (other than a bit of flatness in 2010) hasn’t undergone the perilous drops experienced by many other countries, and has trended upwards. But, lets assume for a moment that we did suffer a fall of median income, causing our child poverty to decrease, would the Green Party be hailing that as a success?

    I don’t think so; I think the Green Party would say its an anomaly in the measurement, and suggest that there are probably more kids living in poverty due to the fall in median income. And I don’t think any sane person would argue that isn’t correct.

    Which brings me back to stats; Mona Lisa Vito would observe that the use of percentage of median income as a determiner of child poverty is – and always has been – bullshit. Any statistic that can show the situation as improving when it clearly is doing the opposite has to be bullshit. We need a better measurement than percent of median income. I’m not suggesting we use the old world standard of income of less that a buck, as was used some years ago, but that we need a measurement that captures what it means to be in poverty in the New Zealand context, but doesn’t flail around when irrelevant things change. To a kid who is really living in poverty, it doesn’t matter if the top earners get $1m, $2m, or $10m, he’s still in poverty, whatever the median income stats might say.

  4. Wake up would ya !!!

    NZ is $100 billion in the hole, Lord knows how many trillions the Yanks, the Chinese-communists, and Europeans owe.


    And ya’ll jumping up and down like children throwing a tantrum demanding more and more and more

    I have one fear that keeps me up at night and makes me lose sleep. That is the thought of seeing my beloved NZ and its people going out like the Rapa Nui


    Ya’ll had better get real!!!

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