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Child poverty has been monitored – now what?

Written By: - Date published: 7:05 am, December 18th, 2015 - 104 comments
Categories: class war, cost of living, discrimination, minimum wage, poverty, quality of life, Social issues, welfare - Tags:

So now we know how child poverty was affected by the Global Financial Crisis.
Our tory friends have taken their annual two-pronged approach, with distraction arguments about whether individual poverty measures measure poverty and the old stereotype that poor people are poor because they do drugs (wrong), and smoke and drink to excess (wrong-h/t:LostSheep). Arguing that less than half of beneficiaries aren’t the “deserving poor” still means that we are letting down tens or hundreds of thousands of thoroughly deserving NZ citizens. But whatever helps tories avoid thinking about the kids (“victims of “parental choices” or not), I guess.

Well, income poverty is one measure, and material hardship is another. Both say something is wrong with our peaceful, productive land. So do our child health stats, and our housing affordability stats. The data which goes back to the fourth Labour government shows the strategic rot in our society began with them and Ruthenasia, and the GFC was a shorter term spike in the overall wasteland.

So, what would be some normal human ways to address this situation?

The Office of the Children’s Commission has come up with some ideas, including microfinancing and making child poverty a legislated issue with targets to address.
A rental housing “Warrant of Fitness” is gaining traction as an idea, with the Greens pushing it quite strongly. This might not address poverty as such, but it could well lower the worst health consequences of poverty – similarly targeted medical interventions for Rheumatic fever and jabs for anything that can be vaccinated against can help those at the bottom (while leaving “the bottom” where it is).
General benefit increases to pre-1991 levels would be good, and a living wage would help the working-poor who remain after Working For Families did its bit.

But is the focus on child poverty too narrow? Can we rely on single adults experiencing a sort of “collateral assistance” while we pander to the tory desire to focus only on the “deserving poor”? Focusing on child poverty enables us to bypass most of the “poor choices” brigade, but does it come at the cost of leaving people behind when successes occur, and would it even make it harder to help those people once child poverty is sorted (we can but dream)?

I’ll be watching the Finnish experiment with Universal Basic Income carefully. Even if it eventually falls short of a true UBI, it promises to be a significant step towards addressing the long term issues of labour and capital in a post-industrialial world.


104 comments on “Child poverty has been monitored – now what? ”

  1. Now what? Make working for a living actually pay for a living, then make sure those who are able to work don’t get much of a choice in the matter. Once you’ve got those two things covered, a more generous social welfare system for those temporarily or permanently unable to work is a doddle. Unfortunately, the current government is enthusiastic about the second item but actively opposed to the first, and Labour is generally useless at either one, so we’re fucked.

    • Nic the NZer 1.1

      If there are not enough jobs available then how will your not giving people a choice about having one go? At present the country doesn’t produce enough jobs, that’s a big part of the underlying issue here.

      • Sabine 1.1.1

        There are enough jobs that need doing, building houses, staffing hospitals, schools, early childhood centres, staffing the police, building and maintaining infrastructure.
        There is ample opportunity to create jobs, however there is an unwillingness to pay for the jobs to get done. And that is the issue.

        AS for the not giving people no choice about taking a job, that is already happening. But then, lets again blame unemployed people for being unemployed. It must’ave’been’them’lazy’ones that created the 6.something% unemployment in the first place. Nothing to do with downsizing, and increasing the salaries of say Fonterra CEO or the likes and increasing shareholder value on the back of those that do the jobs.

        Lucky really that victim blaming is so du jour.

        • Draco T Bastard


        • Coffee Connoisseur

          We need to understand the root cause of our problem is system related.

          Capitalism ensures a flow of money upwards towards capital. i.e the system by its very nature makes the rich richer. This is coupled with a monetary system that is based on debt. So in short the only way to get people out of poverty is to introduce more money into the system.

          The only way that this can happen is by increasing debt. Thats worth saying again The only way to increase the money supply (which needs to happen to pull people out of poverty) is through introducing more debt to the system. This forces people to work to pay that debt back. When you account for the technology we have in society and understand that through better use of that technology only 40% of people in society would actually need to work… when you take that into account, It becomes clear that the system we have is just another form of slavery.
          Hell even the hours worked are the same as Black slavery in the US. If this wasn’t bad enough having to introduce more debt into society makes the debt larger for each new generation. So in other words whilst we continue with this, It will be worse for your children than it was for you and worse for their children than it was for them.

          Now as if that wasn’t enough the central pillar of the Capitalist system is profit. Profit is generated through the extraction of resources before they are turned into products marketed and sold. The reality is that the system doesn’t just aim for a wee bit of profit here and there, no it will always aim for maximum profit. Maximum profit requires Maximum Resources. So in order to achieve that outcome maximum profit requires the extraction of maximum resources this is why we have the environmentl destruction we have and Under the current system all three go hand in hand. Maximum profit = Maximum resource use = environmental destruction. So the reality is you can’t fix climate change under Capitalism. All the incentives work in the opposite direction. As an example if you want peace and I’m sure most do. How do we realistically expect to achieve that when weapons manufacturers make profits in the billions and have lobbyests in the government buildings of our so called allies?

          The only other way to maximise profit is to reduce costs. The highest cost is that of Labour so we automate peoples jobs. 40% of current jobs are set to be automated in the next 10 years. Then what? People are already struggling to afford the basics.

          What is our solution at that point to ensure people can access the essential items that they need. Any other time such a scenario has occured, it has led to civil unrest and system collapse.
          We have a few choices.
          A: Kill off a large part of the worlds population so that there are jobs for those that are left and you can leave the current form of enslavement in place.

          B:You can return to a socialist model which again leaves the current enslavement in place but redistributes wealth so people can afford to buy the things they need. Remember that in a democracy you will always have a section of the public who will vote against having things taken from them. It helps to understand the principle of ‘Loss Aversion’ when it comes to this The profit motive is still there and as such so is the endless extraction of resources for profit and the environmental destruction that comes with it.

          Or C: you can introduce an alternative to the debt based monetary system such as one using crypto currency that can be used to enable people to obtain the things they need and want WITHOUT needing to introduce more debt, You can also use it to transition to a new system (most likely a sharing economy or gifting economy such as RBE which makes use of automation for the benefit of every individual in society instead of just a select few. Do this and not only will people need to work far less (try 3 day weeks and 4 day weekends) but work will become less and less overtime as more tasks can be automated. most importantly people will have what is most important in life back. TIME.
          Whats more you will have a tool to eliminate poverty altogether. Thats all poverty, not just child poverty.

          How can we as first world countries say we truly value human rights when the very system we have doesn’t by its design enable basic human rights for everyone?

          It really depends on the sort of life we’d like to live and the type of world we want our kids to grow up in and the sort of future we want them to have.

          • Draco T Bastard

            As an example if you want peace and I’m sure most do. How do we realistically expect to achieve that when weapons manufacturers make profits in the billions and have lobbyests in the government buildings of our so called allies?

            The weapons manufacturers have lobbyists in the government buildings of our bloody government.

            Lobbying needs to be banned. Nobody should have more say over a countries legislation just because they can afford to pay people to always be in the politicians face making noise.

            A. Which of course won’t work as the amount of work available is only a proportion of the total population.
            B. Which is what we tried from 1930s through to the 1970s. The capitalists fucked it up at the time and then drove us back towards the 19th century and earlier
            C. http://thestandard.org.nz/real-monetary-reform/

            • Coffee Connoisseur

              As is often the case I find myself in agreement with you.
              I would however avoid banking altogether with the implementation of a UBI but would instead set up a seperate system along side it using App based mobile wallet technology signed up to using Real me.
              Then have a regular weekly amount added into the account.
              I would explore having a use it or lose it model to ensure that people do use it and become used to that as a system
              In my view it needs to be set up in a way that helps move us away from the current system altogether and makes it more difficult to return to.

        • Nic the NZer

          Yes, as you rightly point out the government (because who else can) has a reluctance to create sufficient spending for everybody (who wants a job) to find a job. This is the underlying issue with trying to get people off benefits when there are not enough jobs to go around, it fundamentally can never succeed.

      • Psycho Milt 1.1.2

        If there are not enough jobs available then how will your not giving people a choice about having one go?

        It also pre-supposes a government that doesn’t regard a certain percentage of unemployment as being good for the economy – again, the Nats are never going to be that government, but any plan to deal with poverty has to have as item one on the agenda “if the government is a right-wing one, replace it with one that isn’t.”

        • McFlock

          I suspect the correct order: cart vs horse would be to remove the structural unemployment and see just how bad a problem the ‘don’t wanna work’ issue really is. It could well be so small that trying to address it is more trouble than it’s worth.

          Definitely agree on the living wage, though.

          • weka

            Yep. There’s another issue too, which is how many jobs that capitalism deems necessary only get workers because people would be destitute otherwise? This is one reason I’m keen to see what a UBI and living wage does. We might see a bunch of useless jobs disappear and some jobs that are unpleasant or difficult have to be revamped to make them attractive. In that sense I disagree with PM’s stick approach. I suspect people having the choice of working less (or subsisting on a UBI and not doing paid work at all) would have a beneficial effect on society.

            • One Anonymous Bloke

              The Mincome experiment had a few people (a couple of percent, from memory) choosing study over work: I don’t think there was any increase in what people might call idleness.

        • Tracey

          Doesn’t the Reserve Bank kind of operate within a framework that requires some level of unemployment? Or is that a myth I am foolishly repeating?

          • Draco T Bastard

            Doesn’t the Reserve Bank kind of operate within a framework that requires some level of unemployment?

            Having high unemployment is government policy and has been since the 4th Labour government. The 5th Labour government brought it down not by changing policy but by actively encouraging massive increases in private debt which, of course, fuelled the GFC of 2k8.

          • McFlock

            Not directly, but lots of economic models include a Non-Accelerating Inflation Rate of Unemployment (NAIRU). Reserve Bank wants inflation between bounds agreed with the govt, e.g. 0-3%, or 0-4%, can’t remember what it is at the moment.

            The NAIRU is based on the idea that if everyone has jobs, there’s a shortage of unemployed people for new jobs, so the supply shortage drives up wages. People then buy more, and that drives up consumer goods demand. So retailers raise their prices. So workers demand more and get it because there is a shortage of unemployed people to low-ball the offer, and it becomes an accelerating cycle. Calculating an exact value for NAIRU is complex, and depends on essentially economic religion. Economists are really good at caluclating it after the fact with amazing accuracy, but prediction? lolz.

            Anyway, what happens is the Reserve Bank sees the economy start to heat up, and makes a guess abour what the increased activity will do to inflation. So they raise interest rates so borrowing money is more expensive, so startup costs increase, so new jobs are prevented, so unemployment is maintained at an artificially high rate.

            And the country remains fucked, and we still blame people for not finding a job.

            • Tracey

              Thanks guys

            • Nic the NZer

              This is pretty good description, but “Economists are really good at caluclating it after the fact with amazing accuracy,” Well no.

              This rather optimistic treasury paper says that the NAIRU estimate is purportedly accurate to around 2.6% of unemployment, at 95% confidence. This means that 1 in 20 years the NAIRU will actually be more than 2.6% off their estimates. That is fundamentally useless for policy purposes.


              The NAIRU itself is un-observable, its an estimate of a rate at which something is supposed to happen (inflation should purportedly accelerate) but is only defined in the ‘Long term’ (short term economic statistics do not support the NAIRU hypothesis). The long term is a time period where ‘everything is held stable’ apart from the changes in the variable of interest to the model (in this case a relationship between unemployment and inflation). When the time period is defined in this way it can never be measured because in the actual economy all kinds of things change all the time.

              A good working hypothesis seems to be that there is no NAIRU, it simply doesn’t exist. Note its different from the inflation barrier, so this is not to say that there is not inflationary level of spending, just that it can’t be simply correlated with the unemployment rate.

              There is also an important question, can monetary policy (tweeking interest rates) actually provide full employment or control prices. If you look at a recent history of the NZ economy you will note that the housing marked does not appear to have been constrained by significantly higher interest rates and neither do the low present interest rates appear to be leading to low unemployment. It seems monetary policy can not do the job by itself and should probably be paired with fiscal policy in some way or its just not up to the task.

    • miravox 1.2

      Nice post McFlock.

      Yes, the focus on child poverty is too narrow. It seems clear to me that the focus on child poverty is because:
      1. children are deserving poor
      2. as a PR exercise you’d be pretty heartless to deny these little humans health, education and well-being.

      However, as some of the comments in the last few days have shown – number 2 hasn’t worked out and there are even a few who think number 1 is irrelevant to the spending priorities of government.

      imo the public are weary of the focus on child poverty, and maybe it’s time to broaden poverty discussions to how difficult it is for people in all walks of life to provide for themselves. And to identify where those difficulties are, and what it means at different stages of life and for specific populations.

      Whether through structural or cyclical or policy constraints there are too many people who don’t have an adequate income or reasonable ways of providing that for themselves. Some of these people have dependent kids, others struggle alone.

      • miravox 1.2.1

        I appreciate your comments so much more PM when you’re dealing with the big picture rather than picking on the particular…

        I agree entirely with making work pay for a living. I think there is at times a fine balance between identifying those who are able to work but don’t, and those who are temporarily unable to work. And then there’s policy focus that affects how many jobs are available in a given economic climate, and where those jobs are (functionally and geographically).

        Government can have a huge impact on the positive futures for people who want to work, but in the main it refuses to take up this challenge.

      • BM 1.2.2

        A lot of people don’t have an adequate income for the life they want or expect.
        This is a major issue and the reason so many are in the shit, money wise.

        Champagne tastes on a beer salary.

        • miravox

          You can only be talking about the people who earn enough to obtain bank credit for their champagne tastes.

          There’s another bunch out there with beer tastes who are on less than a beer salary. They don’t earn enough for the bank to give them a loan to fix the washing machine.

          • BM

            imo the public are weary of the focus on child poverty, and maybe it’s time to broaden poverty discussions to how difficult it is for people in all walks of life to provide for themselves. And to identify where those difficulties are, and what it means at different stages of life and for specific populations.

            I was replying to this part of your post.

            It’s a big reason why talk of poverty gets no where as a fair chunk of working people are struggling to pay the bills.

            Unfortunately a lot of it is self inflicted, many people completely lack the will power to live within budget, too many flash shiny things to buy.

            • miravox

              And I was replying to this bit in your post:

              “Champagne tastes on a beer salary”

              Yes, I know there are well-paid people who live beyond their means. I was talking about the too many people don’t get paid enough to buy a household appliance that they can keep in good working order – nevermind the champagne.

              That’s if they can afford of the place they’re live in in the first place without packing a few friends or family in to share the rent. Or if they haven’t been hit up by a needy relative (with partner and kid) for the spare bedroom. Or if they’re not still living at the mum and dad hotel way after finishing their education.

            • Tracey

              Unfortunately not a lot of it is self inflicted, many people completely lack the intelligence to withstand the myths that get fed to them that people who do not earn enough money do not have the will power to live within budget, too many flash shiny things to buy.


              Happy to read your sources for the original stament though, rather thna

              everyone knows..

            • b waghorn

              “”too many flash shiny things to buy.””
              The only way to stop that is to ban credit for anything under the size of a house, I can’t see the band of robbers in government wearing that one.

              • BM

                Yeah it’s rather easy to get a credit card.
                Plus every year most banks send you a offer to further add to your credit card limit.

                Very easy to accept and go further and further into debt until you end up struggling to pay the minimum amount to cover the interest let alone actually paying the debt off.

                • McFlock

                  yep. But when there’s no food in the fridge or your kid needs a raincoat, they’re pretty tempting.

                  • b waghorn

                    Absolutely it would be tempting but letting banks shops and scum bag loan sharks fill the gaps for those on low incomse is as bad as doing nothing about lifting incomes.

                    • McFlock

                      Damned straight. Those shop trucks that prey on poor areas are worse than parasites.

                      The credit industry needs a revamp, that’s for sure.

                    • weka

                      Theoretically if WINZ was doing its job properly, people could approach them for assistance to get their washing machine fixed. That was the point of the social welfare net, was it not?

                    • b waghorn

                      Don’t know much about how winz works , but we need to face the fact that people do make poor choices for a variety of reasons,
                      l’m of the belief that leaderership means protecting the vulnerable ,this survival of the fittest scheme we live under is bullshit.

                    • One Anonymous Bloke

                      The credit industry needs a revamp, that’s for sure

                      A living wage etc. would destroy a large portion of the market without having to spend a cent on enforcement 😀

                    • weka

                      WINZ routinely denies people assistance. That plus Labour killing the hardship grant that was needs based means that more people need to borrow money. Benefits are deliberately set at a rate that is to low. In that context it’s pretty irrelevant the mistakes that people make because even the people able to avoid mistakes still struggle and no-one is immune to bad luck (despite what the libertarians think).

                    • One Anonymous Bloke

                      @b waghorn

                      we need to face the fact

                      Nope, you must provide evidence (not your reckons or anecdata) that “poor choices” are in any way connected to the level of poverty, and in the meantime get out of the way of the available solutions.

                    • weka

                      I don’t think b said that (you’re filling in with your interpretation). I also don’t see them getting in the way of solutions, at least no more than hardarse commenters on ts ;-p

            • Tracey

              “Unfortunately a lot it is inflicted by people seemingly not intelligent enough to reject the myths they are fed that poor people simply lack the will power to live within budget, too many flash shiny things to buy.”


              Now, educate yourself, read an expert. And if you want to refute it, provide your evidence not your “I think” and “everyone knows” version of reality.


        • maui

          Yeah they shouldn’t expect to be able to pay the bills each week or fill lunchboxes with enough food. Brainless moron.

        • McFlock

          “A lot of people” don’t have enough money to give their kids the basics. They’re the focus of the post, not your tory wet dreams.

      • McFlock 1.2.3

        Regarding number 2 not working out, I think it’s more a question of degree. Even most of the comments in the past few days have fallen shy of explicitly stating their true beliefs – e.g. when referring to “stopping people from breeding” they back away from the only practical ways society can achieve that goal (forced sterilisation). They much prefer to focus on undeserving parents so nobody notices they’ve swept the needy kids under the rug.

        If we contrast that with attitudes to adult homeless people, where business owners publicly campaign for draconian measures against freedom of movement and assault them with cold water in winter, I think that focusing on child poverty does avoid much of the base viciousness.

        • miravox

          I don’t disagree with what you say, but it’s a function of a political party to frame attitudes, to win over the public (literally) to its interpretation of a political, social, economic, environmental or whatever else issues.

          In this, we all know that the NAct sections of the two leading parties have produced the framing of ‘personal responsibility’ and ‘choices’. It’s up to others to get a bit of traction on systemic causes of homelessness and poverty. I thought Helen Kelly and unions like Unite were working incredibly well in producing an alternative narrative that resonated with the wider public. I hope achievement can be extended well into the political narrative with talk around the outcomes of no jobs, low pay, insane housing policies etc, etc.

          Yes, the child poverty focus does avoid much of the viciousness, but not as many people are ‘hearing’ the refrain anymore. It’s been all said (in the short news feed attention span), they’re just hearing variations on a theme that they already believe is individual in cause and outcome.

          In PR terms how to ‘freshen’ the message (sorry kids, you’re just not interesting anymore) is a problem. Maybe broadening the subject to include the poverty in the wider community with bring a greater understanding of the issues.

      • weka 1.2.4

        Yes, the focus on child poverty is too narrow. It seems clear to me that the focus on child poverty is because:
        1. children are deserving poor
        2. as a PR exercise you’d be pretty heartless to deny these little humans health, education and well-being.

        3. the left believe they can get away with focussing on poverty so long as they don’t talk about adults. Kind of like the deserving poor, but deserves a mention of its own.

        We only have to look at how the chronically ill and mentally ill in NZ get treated once they are unable to work to see how fucked up we are. Even if some people want to not help people on the dole, there is really no reason for abandoning people on subsitence medical benefits. (and still fuck you David Shearer).

        Interesting points you make about whether it’s time to broaden out the poverty conversation again. I wonder if we should be also talking about the non-financial aspects eg for many if you live on your own and are too unwell to work there is a poverty of energy and time as well as money. Or, people who are forced to move to get jobs then lose their family supports and social networks, which creates another kind of poverty that isn’t always solvable.

        • miravox

          ” I wonder if we should be also talking about the non-financial aspects “

          Yes, it’s the non-financial aspects of living that include the need to be part of a community, to have social networks and family support are what is being broken down in the pursuit of economic wealth.

          To me, the financial and non-financial aspects of poverty are where the ‘Precariat’ and the ‘Underclass’ intersect.

          These are the ‘big issues’. I believe they are solvable, just not under the economics-based political system we have. Over the years puddleglum has written regularly about the need for people to be part of social world and the neo-liberal dogma is actively breaking this world, leaving people without the support structures they need to flourish as human beings. A quick search gives e.gs. here and here

          Clearly some people do very well in this fracturing. The mantra of ‘personal responsibility’ for ‘poor choices’ flows quite easily when seeing that some can make it in a changing environment. What isn’t acknowledged is that people who have ‘made it’ economically either haven’t had support structures removed, (or they’ve been adequately replaced), had a bit of a lucky streak or are pretty ruthless and individualistic in their outlook. The reverse is often the case for those who fall into poverty.

          Also, the damage to communities because they are not economically viable, can also mean that these communities are no longer able to provide the support an individual needs, for example, the ill, the disabled and even kids.

  2. Penny Bright 2

    In my considered opinion, if there weren’t billion$ of dollars going to the ‘undeserving rich’ on ‘corporate welfare’ – there would be plenty of money for ‘social welfare’.

    Seen this?

    Thursday, 3 November 2011, 5:28 pm

    PRESS RELEASE: Independent Candidate for Epsom Penny Bright:

    “How many billion$ of public monies could be saved by ‘CUTTING OUT THE CONTRACTORS’?

    3 November 2011

    Where’s National’s ‘corporate welfare’ reform?

    Which of the maor political parties are pushing for ‘corporate welfare’ reform and shrinking the long-term dependency of the private sector on our public monies?

    Where is the ‘devilish detail’ at both local and central government level – which shows EXACTLY where our public rates and taxes are being spent on private sector consultants and contractors?

    Why aren’t the names of the consultant(s)/ contrators(s) – the scope, term and value of these contracts, published in Council or central government Annual Reports – so this information on the spending of OUR public monies is available for public scrutiny?

    Where are the publicly-available ‘Registers of Interests’ for those local government elected representatives, and staff responsible for property and procurement, in order to help guard against possible ‘conflicts of interest’ between those who ‘give’ the contracts and those who ‘get’ the contracts?

    Where’s the ‘transparency’?


    2016 Auckland Mayoral candidate.

    • savenz 2.1

      +1 – Penny – I agree focus on reducing corporate welfare to offset social welfare!!

      Welfare should be for the poor not the rich!!!!

    • Rosemary McDonald 2.2

      me too…+ 1 Penny.

      How many jobs in NZ are funded through taxes and rates?

      How many of those taxes and rates are paid to high end ‘consultants”?

      How many more jobs (at a living wage, of course) could be created if those consultants were paid much, much less?

      More folk working. More much needed work gets done.

      Good luck with the mayoral pitch Penny.

    • Draco T Bastard 2.3

      Yep, simply brining government service back in house would like decrease the cost of those services by ~10% as private profit is removed from cost. That extra cost could then be used to pay living wages to those employed.

  3. Detrie 3

    The Finnish system does have some merit. Think of the levels and costs of the bureaucracy that is done away with. i.e. Abolish the entire welfare system in its totality and just give every citizen just enough to scrape by each month. Why not?

    Additionally focusing more on tax fraud could see a net gain in terms of costs. But the other unique issue here is the Auckland housing market. Even the Unions are against any weighting of income just because you live in one of the most costly cities on earth. I fear there will always be a good case found to maintain the status quo.

    • The Chairman 3.1

      “Think of the levels and costs of the bureaucracy that is done away with.”

      Indeed. The CEO of the of Ministry of Social Development is on $500,000 plus annually alone.

      • Draco T Bastard 3.1.1

        Maximum income should be set at 100 to 150 k. That $350k to $400k could be used to employ more people to do necessary jobs such as building/installing all the renewable energy infrastructure that we need.

        As I say, the rich are the problem.

        • The Chairman

          Pay structures require to be reassessed. The answer to income disparity lays within.

          Setting a maximum income will result in some having to take a pay cut. To overcome this, we should be looking at restoring the balance through pay increases going forward.

          • Draco T Bastard

            Your saying that after we balance income disparity to some small degree that we would then have to increase increase income disparity?

    • weka 3.2

      “Think of the levels and costs of the bureaucracy that is done away with”

      The Forbes article reckons that the cost of administering welfare in the US could instead supply a UBI of $10,000/yr.

  4. gsays 4

    thanks mc flock,
    now we have more info what do we do with it?
    to these eyes the ubi is a great way to help undo equality.
    all citizens getting an income, regardless of their circumstances.

    for any tories reading, it enables all to participate in their reverred market.
    this can be funded by a financial transaction tax.
    (we might need some new accountants in treasury as apparently for the current ones removing gst on fresh fruit and veges/unprocessed food is too difficult).

    enables some to help with community initiatives, building resilience and lifting people up.
    the guy standing lecture earlier this year was a great outline of the benefits of a ubi.
    his example of an area in india was illuminating.
    especially for empowering women.

    • Draco T Bastard 4.1

      this can be funded by a financial transaction tax.
      (we might need some new accountants in treasury as apparently for the current ones removing gst on fresh fruit and veges/unprocessed food is too difficult).

      A financial transaction tax needs to be done via computer as manual systems are too easy to rort which is one of the reasons why we need a cashless society.

    • McFlock 4.2

      I still have reservations about a UBI: the known cost is huge, but the savings in admin costs strike me as a bit of hand-waving, as is whether an FTT would come anywhere near the cost of a UBI.

      One reason I’ll be interested in what the Finland experience will be.

      • Draco T Bastard 4.2.1

        I still have reservations about a UBI: the known cost is huge

        So, you’re saying that we can’t afford our population?

        Yes, that is what complaining about the costs a UBI is actually doing.

        Keeping people out of poverty and in a reasonable living standard is what the economy is for. A UBI would define that reasonable minimum living standard. If we can’t afford that reasonable living standard for everyone then something is not right.

        • McFlock

          So, you’re saying that we can’t afford our population?

          Yes, that is what complaining about the costs a UBI is actually doing.

          Nope. At worst it’s saying that we can’t necessarily afford to pay for our population twice over, the first directly through the capitalist system and the second via government payments to every citizen.

          $20,000 per year for 4,000,000 people is, all together now, $80,000,000,000. Per year. In addition to the 2 million-odd workers earning an average of $50k and that’s another $100,000,000,000 or so. So that’s three quarters of the current NZ GDP simply in payment to citizent, not any retail or manufacturing activity whatsoever.

          Now, it might work if some of the hand-waving turns out to be vaguely accurate. Or it might be the quickest economic collapse since the Weimar republic. The Finnish experiment will give us a practical demonstration of which way it’s likely to go.

          • weka

            Why are you rating it via the GDP?

            Again I have to emphasis the version I’ve presented is not complete. There is plenty of room to debate the numbers I’ve used for this example. With roughly 3m adults in this country the UBI at $10k pa adds up to $30b pa. With the average income at $45k over roughly 2 m wage and salary earners the 40% flat tax rate adds up to $38b… so the numbers do potentially add up. I would suggest the rest of govt expenditure could be funded from existing GST and Company Tax and a widened tax base…especially a Financial Transfer Tax (FTT) and a moderate CGT.

            Universal Income Revisited

            • McFlock

              As a measure of comparison based on what the economy currently does.

              Yes, if we ignore children and choose an amount below the (already insufficient) current benefit levels, and provide additional hand-waving, it might be affordable.

              But then again, it might not.

          • Draco T Bastard

            And there you’re making the same mistake that the RWNJs do – seeing the payments solely as a cost rather than as part of the process that is the economy. It’s going out but it will also be coming back in via taxes.

            Sure, the taxes will all have to be adjusted but that could be done after the introduction of the UBI as we get a better understanding of what’s being used and thus what needs to be taxed.

            • McFlock

              Yes, “at worst” my point was that even after “adjusting” the tax system to an unknown degree, doubling financial transfers to households might not mathematically add up as a good thing for the economy.

              My middle-ground point is that a UBI is a Fucking Big Change To The Economy(tm).

              A FBCTTE(tm) might have extremely positive effects, but might also have some unpredicted catastrophic effects.

              So therefore I would like to know more about the likely repercussions of that FBCTTE(tm) using real-world experience rather than handwaving and chucking the RWNJ label at anyone who hesitates in the slightest.

              The French tried that last bit, it didn’t work out so good.

          • The Chairman

            “So that’s three quarters of the current NZ GDP simply in payment to citizent, not any retail or manufacturing activity whatsoever”

            What comes around goes around. Payments to citizens ultimately ends up being spent in retail and manufacturing, adding to our GDP and tax take.

  5. Tracey 5

    Thanks so much for this McFlock. Greatly appreciated.

    When we crow about being the 9th best place in the world to live, it’s as though some see that as a reason to ignore or villify those who suffer. Just because no one is scavanging in our tips yet, to find breakfast, can’t be the true measure of our collective success, surely?

    • Even when we finally do get people scavenging the tips, ACT fans will still be claiming there’s no poverty here because country X has lower-quality tips. And they’ll still used to have lived in’t shoebox in’t middle o’t road and still turned out alright.

  6. Congratulations on the post McFlock – good stuff.

    I think the focus on child poverty is correct and can be encompassed within a wider concern, and actions, on all individuals and groups afflicted by poverty.

    • Olwyn 6.1

      I think the focus on child poverty is correct and can be encompassed within a wider concern, and actions…

      Not sure I agree. When you look at all this government has done to make people poorer and keep them that way, (GST increase, undermining union bargaining ability, increased restrictions on benefits and state housing, etc, etc) then that is the matrix into which child poverty is drawn. Key’s “drugs” remark yesterday has already been followed on Morning Report with a “problem gambling among Maori- story, with much clucking about the booze outlets and pokie machines in poor areas.


      It is by taking on the wider concern of low wages, inadequate housing, etc, that we have a chance of shifting the matrix. Child poverty, taken on its own within the current one, raises the risk of stolen-generation style solutions, or anything else that will keep the poverty but save face on the child front.

      • Tracey 6.1.1

        national Governments will NEVER address issues such as child poverty because

        1. children dont vote
        2. parent sof poor children don’t vote National

        They only ever do enough to seem like they have some compassion.

        Opponents, imo, need to start framing the issue differently.

        In a previous life when I was a lawyer, and I was addressing a jury or even a Judge (sometimes) I would frame things in the following way

        “it would be foolish to think… x, y or z”

        No one wishes to be thought of as stupid or foolish….

        So, Opponents need to start assuming compassion is an importan taspect of kiwis lives.

        Only the uncaring would deny….

        I know all compassionate people would agree

        and always use examples that are not marginal…

        the disabled at birth
        the diasbled by illlness or accident
        those who have suddenly lost a job
        those who…

        and so on.

        It is always in the framing. Appeal to people’s better natures cos they all have one.

        Most of us are only a redundancy letter away from needing the support of our families, our friends, or the state… no matter how well we plan, or how hard we work.

        And no one wants to admit to being a cold hard bastard….

  7. savenz 7

    First thing for housing should be addressing migration, if there are 60,000 migrants coming in, who is paying for and where are the extra 60,000 houses, jobs, health care increase, roading, transport and social welfare?

    The whole system of immigration needs radical reform in the country. The migrants themselves are angry with being lured to NZ and then not being able to exist on our low wages and poor standards of living. In many cases they do not even need to have a job here while getting a work visa and then find they can’t get one, and end up on social welfare of working at Bunnings on minimum wages! Does not sound like a dream outcome to me. Some of the long term skills shortages are bizarre – chefs for example – is it really important to our economy to have more indian or Thai chiefs? Likewise being able to invest in property while our government pretends they doesn’t want Kiwis to become tenants in their own country? Then reform the RMA so that polluters and the rich can run roughshod over everyone else while destroying our heritage from culling ancient Kauri trees to bottling our water to polluting our waterways and in real terms being climate change polluters with an estimate 96% increase from 1990 levels! (Ofcourse reforming the RMA is to create the ‘affordable houses’ for the jobless migrants coming in, sarc)


    Migrants should be told the truth, NZ is a neoliberal wonderland, that exploits it’s people, only cares about what overseas people think as some sort of marketing, logo campaign and encourages immigration so that it appears we are still coping as a economy while borrowing massive debts so they have more excuses to privatise and asset strip our country for their mates.

    • greywarshark 7.1

      Chefs. It is a job done by a person. That is good. We need more people in work.
      It is a job that makes things from ingredients and sells them. That is business, that is value added, that results in money exchanged into the economy. That is making food, an essential in our lives.

      And particularly there are tourists who are the base of our second or third industry. They need food. They gather and chat in cafes and bars and restaurants. We depend on them as one of our few money earners in the country. (I think that lprent said that technology services is about second.) So we need more chefs, and with chefs go kitchenhands and waiters, so they are real ‘job creators’.

      George Orwell wrote down and out in Paris and London, and it wasn’t a tale of good living when he was a kitchenhand. But it was a living. And he gave a tip on how to get away from a boarding house when you’ve lost your job and can’t pay back rent. You lower your bag on a long rope out of the window to a mate, and then you can walk out as normal. The crooks at the top call it theft and criminal, the people at the bottom call it survival. Those at the top structure the economy so that it favours them and devil takes the hindmost, (the people who are not in their milieu or able to scramble up there).

      So lets have more chefs, more food carts, more eating out at affordable prices as well as catering for the comfortable pussies, which makes more food preparation on the premises with locals doing the jobs.

  8. The Chairman 8

    A Warrant of Fitness for rental housing (when rental demand is growing and supply is lacking) will lead to the related Warrant of Fitness costs being passed on.

    The consequence of such will leave tenants with less to heat their newly warranted homes, questioning the notion of expected health benefits.

    • McFlock 8.1

      although if demand is growing and supply is lacking, the costs will go up anyway.

      But yes, we need more homes in the market, too – Labour had a plan for that, ISTR.

      • The Chairman 8.1.1

        “Although if demand is growing and supply is lacking, the costs will go up anyway.”

        Indeed, compounding the problem.

        Therefore, we shouldn’t make the mistake of putting the cart before the horse.

        The supply issue needs to be addressed first. Doing so will also assist in providing more quality homes.

        • McFlock

          How much would a rental WoF coast? If the cost is relatively trivial per home, it will have a trivial effect on rental price, even if supply cost dictates price.

          • Rosemary McDonald

            Or…the rent could be frozen.

            And, it would be illegal to increase the rent solely because $$$ had been spent by the landlord in order to get the house up to a standard fit for human habitation.

            Please…there are ways to do this without negative impacts on those least able to sustain further blows.

            It should be illegal to rent out an unhealthy house. Illegal.

            • One Anonymous Bloke

              Or the government could simply do its job and maintain social housing at an appropriate level, which might “accidentally” teach National Party slumlords a lesson in market forces 😀

              • savenz

                Unless someone has a plan to build 60,000 houses per year to house the new entrants to NZ who have not paid any taxes here yet, maybe stop immigration or limit it to a criteria that actually works for the people of NZ, and since there are not enough jobs for locals or immigrants and immigration is being used to keep wages down, maybe ponder that idea.

                It seems crazy to me, the idea that it is ok to allow 60,000 migrants in when there is not enough jobs or houses or social spend on the existing locals and then somehow a warrant of fitness is supposed on existing rentals solves the problem or rent freeze???

                You can freeze rents as long as you like (but some of the migrants don’t bother renting the houses at all so not sure that will help, more like cause a more massive shortage of rentals) or have a WOF, apparently 90% of those failed the test so that means that 90% of existing rentals will be removed off the market? Those tenants already being evicted for failure to pay rent will not be able to find a place ever.

                No matter what, these ideas will cause a more massive rental shortage.

                In addition, a major problem for damp cold homes is that tenants can’t afford the power to run the heat pumps because their wages are so low and power is so high!

                Around the world, to rent a detached house with garage and garden in a major city costs more than NZ. It is NZ wages that are the problem in most cases for employed tenants and for those unemployed the lack of state houses!

                In addition houses in NZ are often larger (and in Auckland the building consents are for larger and larger houses, they are not building places that can be rented because they cost $800k plus and tenants can only afford about $600 a week or less on their wages, so the maths does not work at all). In short the current houses being built are for wealthier owner occupiers in most instances, not rentals at all.

                In Europe and other places people live in well designed apartments which are much smaller and also easier to heat. Often families have a bach or summer house which they retreat to in the weekends and holidays. There are also much tighter RMA laws and so people are not able to build houses or apartments that block out sun and light to neighbours as in NZ.

                Remember the apartment buildings in Auckland that were built directly in the path of other blocks so that they basically were looking into a wall. That just would never happen in civilised cities, but in Auckland the planners will grant anything and then shrug their shoulders. Aucklander’s have to live in these for 50 years or more!

                In Sweden, where it is practically impossible to rent a place, as rent freezes mean tenants can’t afford to move and those entering the city are unable to find a place to live as there are not enough rentals.

                • McFlock

                  30,000 building consents a year at the moment.
                  And not every one will be for dwellings, but not every migrant will need a separate dwelling. Some will flat, others will live live together as families. Interesting dip from the GFC.

                  • savenz

                    @McFlock – and are their 60,000 new jobs being created by the government?

                    Shouldn’t their be a social responsibility to help those born in NZ or current residents first and have jobs for them to take first?

                    That is supposed to be how immigration policy works, i.e. migrants take jobs that Kiwis can’t fill – not as a government device to keep wages low and job insecurity high for people living in the country.

                    BTW – I’m not blaming migrants for this, I am blaming government policy!

                    • McFlock

                      Migrants are no more a resource burden than the children of the poor.

                      Many of them will gain points from providing skillsets that are in short supply, anyway.

                • miravox

                  “In Sweden, where it is practically impossible to rent a place”

                  You can add the increase in tenants purchasing their rental properties in the 1990s and beyond and a lack of new builds of affordable housing as arguably having more impact on Sweden’s housing supply than rent freezes. As it is, for varying reasons the ‘market’ hasn’t provided and it’s back to the State and “active housing policies” for Sweden. The mismatch in population needs and the houses developers want to build will also be addressed.

                  Our goal is 250,000 homes by 2020. The focus should be on sustainable homes that are available for people with ordinary incomes

            • The Chairman

              Numerous factors contribute to rent increases, thus freezing rents wouldn’t be practicable.

              You say there are ways to do this without negative impacts on those least able to sustain further blows, overlooking the fact that a number of landlords are also least able to sustain further blows.

              Not all landlords are fat cats.

              Tenants generally opt for poorer quality homes due to the lower rents. Making these homes illegal will rob tenants of that cheaper option.

          • The Chairman

            The initial outlay (bringing homes up to scratch) could be quite substantive.

            On top of that there is ongoing maintenance costs along with ongoing inspection costs.

            The estimated cost of a rental WOF inspection ranges from $350 to $700 annually.

            Considering the negative health impacts seem to stem from the inability of tenants to cover heating cost, even a trivial increase will have a major impact.

  9. Draco T Bastard 9

    4 mistakes showing Key is clueless on dealing with poverty

    The Prime Minister’s response to the increase in children living below the poverty line was incorrect and completely contradictory. On the one hand he dismissed the rise of child poverty as a result of parents not working, and in particular singled out drug dependency as a problem. Both of these statements are incorrect according to the Government’s own statistics. On the other hand he pointed to the case of Jonah Lomu’s kids as being a special case – for some reason those poor boys are deserving of help whereas the other 305,000 are not.

    Blunder #1: Poverty is due to people not working
    Blunder #2: The answer to poverty is work
    Blunder #3: People are on benefits because of drugs
    Blunder #4: Some people are deserving of help and others aren’t
    The situation facing Jonah Lomu’s boys is certainly sad.

    But why doesn’t the Prime Minister show the same empathy to the 305,000 other children growing up in poverty? They haven’t chosen the situation they are in. Indeed, neither have many of the parents that are living in poverty and trying to raise their kids.

  10. weka 10

    What? 421 words. Is this introduction, McFlock?

    (well done though, back to have a read later 🙂 )

    • McFlock 10.1

      This was me basically pretending that I was writing a list of bullet points for one slide in a powerpoint presentation.

      Evade, assess, execute… adapt and overcome… all that jazz 🙂

  11. savenz 11

    Stopping corporate tax dodging might help child poverty…

    Let us see what is happening in OZ

    “More than one-third of the largest public companies and multinational entities paid no tax in Australia in the most recent financial year on record, according to the first transparency report published by the Australian Taxation Office.

    Tax transparency: search the full list of 1,539 companies
    Read more
    Qantas Airways was the company with the highest total income that paid no tax, followed by a subsidiary of mining group Glencore (GHP 104 160 689 Pty Ltd), ExxonMobil Australia and Lend Lease. These companies reported a taxable income of zero, despite having incomes in billions of dollars during 2013-14.

    The ATO data release covers Australian public companies and foreign entities, public and private, with total annual incomes of $100m or more. This was the category of businesses the Coalition did not seek to shield in the recent political dispute over tax transparency for Australian private companies.

    Of the 1,539 individual entities listed in the ATO report, 579 (or 37.6%) paid no tax, and 920 (62.4%) paid some tax in 2013-14.”


  12. In Vino 12

    I’ve been away all day, just read it all. Thanks to all (except maybe that BM troll) – one of the most interesting threads in a long time.

    It annoys me that the right-wingers bash beneficiaries and in doing so divert attention from the fact of their low-wage economy. They still manage to push the idea that you can start on an ridiculously low wage (which they themselves would decline to work for), then, by virtuous, industrious self-application, rapidly work your way up to the level where you become an employer and can make that spurious claim of ‘creating wealth’. (What hypocritical cant!)

    We need to prove loudly that many of the poor are working bloody hard full-time and still unfairly rewarded, and unable to provide for the needs of their children.

    The low-wage economy is a low-performance one which cripples well-meaning parents, as well as diminishing overall demand for goods produced.

    We won’t see that in the MSM, will we?

  13. gsays 13

    great conversation.
    draco, i must admit hearing the backing signal when i read your cashless society comment.
    i cant put my finger on it (lack of control, you can have yr supply of $ stopped) but cashless gives me the heebees.

    mcflock, coffee and draco, y’all have clearly read/learnt more than me on this.
    re ubi it just feels kinda right, as least as an alternative.
    if not a stepping stone to a sharing or resource based economy.

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