QOTD: The real theme of the Budget

Wonderfully summed up by my comrade mickysavage over at The Standard:

As the dust settles a few themes are appearing.

National agrees that child poverty is an urgent issue but it has delayed implementation of measures until April next year.

National hates doing anything that lets us provide for our future.

National lied about “no new taxes”.

National is underfunding health and education.

National is doing nothing about our future and has a series of band aids being applied to urgent political issues.

This is the thing about Budgets. They’re basically a gigantic series of press releases (almost literally a gigantic series of press releases as anyone who was subscribed to the Scoop politics RSS feed last week could tell you). The government will always get the first turn at framing what their Budget contains, and even the best-resourced Opposition or press gallery in the world aren’t going to be able to tell you, on Budget Day, which bits are accurate and which bits are flagrant spin.

Like that much-vaunted $25 per week for beneficiary families, as outlined by Gordon Campbell:

That headline figure for the increase in benefits was misleading. No-one will get an extra $25. The real figure is a maximum of $23 in the hand when the simultaneous (and miserly) deductions in income-related rents and other forms of assistance is factored in. By late last night, Work and Income were clarifying that these abatement rules meant that many beneficiary families would receive an increase more in the nature of $18, and some families would receive nothing extra at all. Moreover, the figures seemed plucked out of the air, rather than based on any research into existing levels of need. Plus, the relief is deemed to be so urgently needed it won’t actually arrive for another eleven months.

That being said, this isn’t an extreme rightwing Budget. And that tells us a lot about the National Party’s state of mind. At least on paper, in their own framing, they’ve had to backflip on core National Party ideas like “crushing every last ounce of dignity out of beneficiaries” and the days of trying to paint KiwiSaver as “communism by stealth” are long gone (they’re just going to pretend not to be chipping away at it).

This isn’t what a third-term government’s budget is supposed to look like, and statements like this abhorrent one from Nick Smith show very clearly that National hasn’t suddenly had a massive change of heart. This is a government which can see things just aren’t going to get better for it as their third term grinds on. The daydreams of being the first party in an MMP environment to have an absolute majority (without needing to prop up sockpuppets in key seats) are over.

The challenge for the Opposition is to point out the reality – the superficial nature of National’s promises and the little tells like delaying changes to benefits while rushing through more cuts to KiwiSaver – and present an alternative. A government which actually cares about everyone and wants to use power to make a real difference in people’s lives.

Another spotlight on National’s gross mistreatment of beneficiaries

It’s the old National Party lie, isn’t it? As reported in The Press:

New Zealand’s social welfare system “dehumanises” people in need, with beneficiaries described as “scared stiff” of Work and Income case managers, new research says.

The report said case managers were “overstretched”.

Tolley said there was “no evidence” of this and in 2014 the Auditor-General reviewed welfare services and found most people found their claims were “resolved fairly”.

She said the Government had reduced the amount of people on benefits, with an 8.6 per cent decline in Canterbury of solo parent benefits.

We’ve reduced the numbers! That’s what’s important! We must be successful economic managers because there are fewer people claiming solo parent benefits and this obviously means people are bootstrapping their way into work!

Except that at this point, if you’re at all interested in NZ politics, you know full well that National has spent the past six years achieving benefit number reductions in one way: making life so hellish for the people who depend on them that they will do absolutely anything to avoid dealing with Work and Income.

We’re talking about people who by very definition are in a vulnerable position. They can’t find work. The jobs aren’t there, or they’re sick, or they have dependent children. They don’t have enough to pay the bills. They’re trying to feed their kids, and they’re coming up time and again against a remorseless, heartless machine which treats them like villains.

I know there are many lovely, generous, well-intentioned people working in our social welfare system. But right at the top you’ve got a government which thinks anyone who isn’t in paid work is inherently a moocher, a parasite, a waste of space. That will always filter down to the front lines, and that’s why you get a situation where people who have to queue for hours just to have the chance to argue for a little bit of help to pay the rent aren’t even allowed to use the goddamned toilet.

Back to the future: Brian Easton on benefit abatement rates

Hat-tip to Sarah Wilson on Twitter for linking to this 1995 piece by Brian Easton on the “unintended” consequences of abating people’s benefits when they get part-time work – to the extent that it’s just not worth getting “off” the benefit at all.

John stopped persevering with the job, when he discovered he was not being paid for it. The employer paid him a fair wage, but John was on the unemployment benefit. When he reported his additional earnings, the Income Support Service reduced (abated) his benefit. After he paid income tax too, he was left with 2 cents of every dollar he earned, not enough to cover even the cost of the bus fare work. In the economist’s jargon he faced an “effective marginal tax rate” (EMTR) of 98 percent (plus the costs of the job). There was no financial incentive for his working, and so he gave it up. John has been trapped into unemployment by the abatement rules of his benefit. There are many like John.

The problem of high EMTRs has always been there, but things have changed since 1972 when they last went under a major review. In those days jobs were easier to find, and it was not necessary to build up a series of part time jobs to obtain a full time one. Under full employment people jumped from a benefit (if eligible) to a full time job, so the high EMTR in between did not matter. But that situation rarely applies today.

Yet, our Income Support Service, handing out unemployment benefits worth over a billion dollars a year, is still basing its abatement rates on the assumption that there is full employment. Meanwhile, the strategy of reducing taxes on those with high incomes has meant the revenue has to be raised from the poor by putting up their EMTRs. If one’s heart bleeds for the rich facing a disincentive from an income tax rate of 33 percent, why the hard hearted view that a 98 percent rate will inspire John to get a job?

The abatement rates aren’t as bad today as they were then – but the top rate is still 70 cents on the dollar.

How on earth can we blame people for being on benefits when there simply isn’t fulltime work available, and when they’re financially punished for taking part-time jobs? (Oh, and we’ve removed the support they need to study and “improve” themselves, and even if they’re sick we’re going to force them to undergo humiliating checks-and-balances just to make sure their chronic illnesses haven’t magically disappeared.)

Easton notes that the idea of what we now call a Universal Basic Income would address some of these issues. Hopefully we’re a lot closer to that becoming a reality than we were in 1995 – but not much, I suspect.

On poverty, parenting, and Paula

Of course it would be Paula Bennett, the government’s most infamous ladder-retracting Minister, getting headlines about irresponsible parenting being the real cause of children going to school with no lunches.

“[Voting down the “Feed the Kids” Bill] is absolutely is the right thing to do. We provide breakfast into any school that wants it and this is being taken up which is great, but we believe in parental responsibility and I stand by the decision we made,” Bennett says.

This despite OECD figures showing that 17% of respondents report that they do not have money to buy sufficient food.

The average household income in 2014 was $42,600. And remember the statisticians’ (or rather, politicians’) trick: that’s a mean average. It gets dragged up by all those comfortable MP pay raises and CEOs on millions of dollars per year.

The average income for the bottom 10% of households? $13,200. There’s no hiding from reality: for many people, there simply isn’t enough money to cover expenses.

But the National Party has always hid behind a faux moral outrage on child poverty: “Parental responsibility!” they cry. “Make better choices!” they plead. “Stop breeding for a business!” they sneer. As though even Paula Bennett – or John Key, whose state house upbringing is so often used to lend him “just like normal people!” cred – have any understanding of what it’s like struggling to make ends meet in a post-GFC world.

To the bulk of people – comfortably well-off people who like to consider themselves to be the real battlers, but don’t really appreciate how little some people are “getting by” on – those seem like fair comments. After all, they think (and I could think too, given a completely different set of values) I’m not that wealthy; I have to make budgeting decisions sometimes; I could certainly afford to spend less on luxuries. Therefore, all those people who are complaining must just be choosing the wrong things!

Yet, the average income for the bottom 10% of households is $13,200. Even the mean household income – that one dragged upwards by the cushy pay rises of senior managers – is only $42,600. That’s not a lot to pay the rent, and the bills, and cover transport, and put food on the table.

It’s often very difficult to see just how much our own lives aren’t really “normal” or representative of the lives of others.

I don’t know what the answer is to getting people to understand that. So for now I’ll settle for calling out Paula Bennett and her government’s rhetoric as heartless bullshit, designed to dehumanize and vilify poor people so no one asks questions about why we’re pursuing nasty and ultimately-disastrous policies to benefit the people at the top and grind the people at the bottom into the dirt.

More meaningless numbers

It’s that time of year when the Government trumpets the success of its welfare reforms. Look! they cry, benefit numbers are down! The repressive, labyrinthine, victim-blaming system works!

I’ve written before about the way National have perfected the art of throwing out context-free figures, knowing they’ll be interpreted as “proof” of something.

It always makes me think of another quote from Pratchett:

“Samuel Vimes dreamed about Clues. He had a jaundiced view of Clues. He instinctively distrusted them. They got in the way. And he distrusted the kind of person who’d take one look at another man and say in a lordly voice to his companion, “Ah, my dear sir, I can tell you nothing except that he is a left-handed stonemason who has spent some years in the merchant navy and has recently fallen on hard times,” and then unroll a lot of supercilious commentary about calluses and stance and the state of a man’s boots, when exactly the same comments could apply to a man who was wearing his old clothes because he’d been doing a spot of home bricklaying for a new barbecue pit, and had been tattooed once when he was drunk and seventeen* and in fact got seasick on a wet pavement. What arrogance! What an insult to the rich and chaotic variety of the human experience!”

The point is, the only thing you can really say when you find footprints in the flowerbed is that someone stood in the flowerbed.

And the only thing you can really say when the government cries “there are 13,000 fewer people on benefits” is that there are 13,000 fewer people on benefits. You don’t know why, unless they also produce figures on where those people went – how many moved into permanent jobs (and have stayed in them), or emigrated to Australia, or simply vanished from the records?

And you absolutely do not know that “the reductions we’re now seeing will mean fewer people on benefit in the years to come which means we’re going to see healthier, more prosperous households.”

The only basis for that statement is ideology: Anne Tolley thinks benefits are unnecessary handouts which stop people from being ~incentivised~ to feed their children through work, ergo people not being on benefits must mean economic prosperity.

Or at least, that’s the argument she’s peddling.

But because most people outside of the Cabinet are basically good-natured and compassionate, it works: we assume that benefits exist to help people who can’t work, and they stop getting a benefit when they’ve gone into work. And we assume “work” means a good, steady job. So a drop in benefit numbers must be a positive thing!

If we got the real figures – how many people were forced into terrible jobs, only to lose them 89 days in and be placed on a stand-down, or how many people just gave up and turned to begging, or how many people were so bullied and demoralized by WINZ that they’re making themselves sicker by doing work their doctors say is unhealthy for them – we would have a very different idea of the “success” of National’s welfare reforms.

That’s why they pretend that only the numbers matter.