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Having us squabble over the welfare pie

Written By: - Date published: 10:40 am, December 18th, 2019 - 34 comments
Categories: benefits, child welfare, disability, poverty, welfare - Tags: , , , ,

Yet another report was released this month, by the Children’s Commissioner, showing the dire state of children’s poverty in NZ. Along with various commentary across the MSM on the situation and what should be done, was the idea of a child ‘pension’.

Unfortunately, economist Shamubeel Eaqub was quoted in a Stuff business article with this,

But Eaqub said politicians had to convince the voting public, who were reluctant to make sacrifices.

“If I had my way you’d take it away from the decrepit old folk and give it to the young ones. Make super means-tested and a benefit for children unconditional. Older people don’t need it, they have money.”

Decrepit? Elderly people are all well off?

One hopes this was taken out of context, but even so it’s an extraordinary statement from an influential economist apparently advocating for the wellbeing of a vulnerable group of NZ citizens but taking such an ageist and ableist approach. 

New Zealand’s child poverty rates are a disgrace – 26% of children live in low income households. Our elder poverty rate isn’t flash either, at 14%. There are 93,000 permanent or long term disabled people whose income is a benefit set below what is livable (more disabled live on an even lower rate). None of these groups should be having to vie with each other for the voting public’s beneficence.

Even allowing for Eaqub’s probable point that wealthy people shouldn’t be getting Super when children are going hungry, it’s highly irresponsible to drop such quotes into the MSM in a country that routinely practices beneficiary bashing, elder ageism, and often simply ignores the plight of disabled people living in poverty.

I’m also concerned at the casual mentioning of means testing Super (rather than say income testing), when we already have another high profile economist, Gareth Morgan, promoting an annual housing tax that would require low income home owners to either take out a mortgage to pay the  tax each year, or sell up and move into a cheaper house, with all the social disruption to community that causes.

We should be mindful that Work and Income have an appalling culture of making non-Super beneficiaries hoop jump in unconscionable ways and denying them entitlements, I hate to think how elderly people would fare in such a system.

Which isn’t to say a discussion about universal Super is an inherently bad idea, but that pitting one group against another to do it is a really bad frame to have the conversation.

Squabbling over the welfare pie is part of ‘deserving poor’ narrative. A familiar narrative in right wing positions, it has been more deeply entrenched in the past decade by the left’s focus on child poverty. Hence we talk about families living in poverty but rarely hear about those not living in a family structure, and we have a Prime Minister who wants to end child poverty but can’t bring herself to talk about the poverty of the disabled. We should of course have policies designed to address the urgent needs of children and parents living in poverty. Likewise, disabled people need their own set of policies, and so do the elderly.

Worse is the mix here of deserving poor with ageism. When we hear supposedly progressive economists talking about elderly people as decrepit, or rendering the elderly poor invisible, it’s time to revisit our moral compass. Needless to say, all the Ok Boomer shit needs to stop, because whatever people think they are doing with that, ‘Boomer’ is fast being turned into a stick to beat old people with, and every time someone says it’s about attitude not age they’re doing the same disappearing of the elderly poor as Eaqub.

We now have a degree of support from progressives for policies that are a dangerous mix of this selective compassion and neoliberalism. Not surprisingly Eaqub wants The Opportunities Party in parliament. TOP’s history of policy development around welfare is dodgy (see Morgan’s pre-TOP attitudes towards welfare recipients).

In the 2017 election one of TOP’s showcased policies was a UBI for 18 – 23 year olds. Sounds good right? Until we understand that it’s not universal and the people that would be excluded included disabled youth on welfare. If you were earning income (eg a teacher’s salary) you would get an extra $200/wk, untaxed and unabated, but if you were on a benefit and unable to work you would get nothing.

Policy development with inbuilt collateral damage isn’t fair and the left should be highly critical where that is happening. If all this raises the issue of universality vs fair targeting, and how NZ might afford it, I don’t know if we are at a point of having to accept we can’t afford to be just, or if we are simply acquiescing to the resistance of NZ to give a shit and distribute wealth more fairly.

If we are to have a conversation about removing the universality of Superannuation, then we must first centre the realities and voices of the people already most badly affected.  Not the people tossing around bigoted rhetoric or proposing discriminatory policy.

34 comments on “Having us squabble over the welfare pie ”

  1. dv 1

    UBI, with tax as claw back on the higher incomes.

    • weka 1.1

      UBIs, as commonly discussed in NZ, help the precariat work force. They don't help people who cannot work or shouldn't be expected to work. UBI with welfare bolted on (an expression from Chloe Ann-King) *might work, but I'd need to see some serious work from the left about how it would be tory-proofed.

      The UBI scheme promoted by Gareth Morgan is highly discriminatory.

  2. Rosemary McDonald 2

    Oh dear. Weka, mate, I have held off from sharing this here but as from a month or so ago MSD docked our Super as it transpires that a previous concession of a year's grace upon the sale of the family home before abatements are made with respect to interest supposedly being earned on funds prior to repurchase has gone. Those with a non qualifying partner (such as myself providing full time unpaid advanced level care) to the qualifying partner are means/ asset tested. The attendant fact that it will take us much longer, and very possibly cost more, than the able bodied to house ourselves cuts no ice. A phone call, made when I was very calm and resigned, to find out if there was any flexibility in the system for those in our circumstances led to the call taker hanging up because it was 'too much of an emotional issue' for them. Swear on my life I was completely calm and rational.

    The end of the call left us demoralized and dispirited.

    Yes we have $$$$ in the bank, but our only home is our Bus currently parked on the side of the road.

    And every day we draw on our sacred house money to make up the shortfall due to the abatement for $$$ we're not actually earning in interest puts our home aspirations further away.

    So. Shamubeel. There are mechanisms available for MSD to penalize Superannuitants living of the fat of the land….

    Merry fucking Christmas.

    • weka 2.1

      Didn't quite follow that sorry (I think because rules for Super are different than for non-Super benefits?). Super is being abated because of the (interest) income test? Or the asset test?

      For non-Super benes at least, afaik the year time period is still policy not law, and is discretionary. You can argue special circumstances due to disability that you need longer (am thinking in your situation this is because of finding disability appropriate housing, higher needs regards location, as well as the extra time in completing such a task because of your situation as a couple re disability and care).

      Whether that is worth it is another matter if WINZ are being bastards about it. Usual advice of doing everything in writing from this point on, even just to keep review option open.

      • Rosemary McDonald 2.1.1

        Don't blame you for not getting it…we don't.

        We are supposed to invest our house sale money and the interest earned is income and abatements are made as is appropriate.

        We have our house sale money on call so we can, should the opportunity arise, readily access it to secure an appropriately accessible property.

        We are being treated as if we are earning interest on this amount even though we aren't.

        Told it is 'our choice' that we are not earning interest.

        Very difficult if not impossible to discuss it with MSD if call taker has hung up on you because they find your situation too fraught for them to cope with.

        I'd find the irony side -splittingly hilarious if it wasn't so deeply depressing.

        Seems we're constantly being forced into the margins.

        I've always had some respect for Shamubeel…but he needs to pull his whatever from out of his aft crevasse …

        • weka 2.1.1.1

          ah yes, I have come across this too. Godforbid that beneficiaries made decisions based on their own wellbeing rather than the penny-pinching agenda of the state.

          I may need to look at Eaqub's work more indepth. The whole generation rent stuff originally seemed to have the same disapppearing issue, in that it ignored all the people across all generations who had always had to rent. I have this developing theory around the liberal left in NZ and how it favours stars such as Eaqub without doing deeper analysis. My curiosity is how progressives rationalise this in their own minds and value system.

          • Rosemary McDonald 2.1.1.1.1

            If the Current Incumbents had kept their pre-election promises and allowed payment of spouses who are providing the assessed care of an MOH very high needs disabled person then there would be no problem.

            Peter could happily claim his full whack of Super and I'd be earning a wage. Whatever we were lucky enough to have in the bank would be none of their goddamn beeswax.

            What gets me is that they're all supposed to be lovey-dovey kindness with the Nation's Wellbeing foremost at heart.

            Bullshit to that when there is seemingly no discussion allowed because it will upset the MSD staff.

            Double bullshit when this Mob continue to ignore the advice of the WEAG and refuse to raise benefits to even slightly above punitive levels.

            We have been there on the SLP and having to borrow to bring the ends together…we are more than conscious of the fact that having $$$ in the bank makes us privileged in comparison.

            It is clear to us that the attitude of those working for MSD has not changed….the Lovingkindness is certainly not trickling down.

            My heart goes out to those stilL on the SLP.

  3. pat 3

    Increase the tax take and redistribute

  4. greywarshark 4

    'One hopes this was taken out of context, but even so it’s an extraordinary statement from an influential economist apparently advocating for the wellbeing of a vulnerable group of NZ citizens but taking such an ageist and ableist approach. '

    The economist is taking a neolib view. People are secondary to the big business interests that have established their stranglehold on our world. As secondary people can be moved around to whatever strategic economic base is chosen. Old people have value for business in purchasing aids such as small motorised vehicles and also for housing, but in the end they fall apart and require intensive nursing which is costly.

    The young also require intensive nursing and care and have reached in numbers a cost-benefit ratio where the problems created by their unwellness and anti-social difficulties require remediation. So to maintain balance in welfare and not disturb the status quo, there needs to be reduction in the amount allocated for the growing numbers of elderly and make that available for the young.

    The government has sold its soul, in order to make gold out of straw, and can do little of value for the people though that was once its accepted role. Rumplestiltzkin has come back for his next payment, and the cost is further abandonment of control over destinies, which will be masked by wild promises to those who consider themselves favoured and entitled.

    So government lacks the ability to move intelligently, wisely and compassionately to pass laws that are requested and which carried out carefully, will answer observable problems. And we elders who wish can't choose the option of lawful managed demise, through euthanasia, but be forced to an abrupt, managed suicide or to live on with unnecessary expense of time and money and promises of clean beds and enduring care as long as our hearts keep ticking.

    We are made vulnerable from not being allowed to decide when we will die, not just because our bodies and minds have become frail as is the common concept. The care for the vast numbers of elderly can't be afforded under the budget allowed for this, except by underpaying the carers, and because there is a fixed welfare budget, denying the young the full care and services they need. So rob Peter to pay Paul, is the neolib economist's answer and if he wasn't regarded as neolib, his statements belie the perception.

  5. tc 5

    Another academic think tanker 'starting the conversation' his 'influencers' want on an MSM soapbox.

    out of context sums it up nicely Weka, out of touch/reality and ignoring the sector of society not paying it's way which if they did this wouldn't even be a 'conversation'.

    • weka 5.1

      I really wish the MSM didn't do this 'blind' reporting where we are given quotes but can't see where/when/how they came about.

      I don't think Eaqub is as bad as those quotes seem, but I hope that he isn't and I have no way of knowing at the moment.

      Either way, he doesn't strike me as someone who understands the value of centreing the people most affected. In contrast with someone like Jess Berenston-Shaw how makes an effort to not pull down others while addressing the needs of specific vulnerable people. It's a very different cultural approach.

  6. Aaron 6

    Don't take it from the elderly, take it from the super rich with a financial transactions tax! Mind you, if Shamubeel Eaqub actually suggested that it would probably be the end of being sought out by the media for comment 🙂

    • Roy Cartland 6.1

      Totally agree – the 'us' and 'them' is the rest of us vs the rich. Every other category is irrelevant. (Well, except the SUPER rich of course.)

    • Blazer 6.2

      Dead right a financial transaction tax is anathema to the elite ruling class.

      Central banks have created so much money ,that real productivity and the imbalance between short and long term debt has become the catalyst for low and negative interest rates .

      The capital available flows into stocks,bonds and RE and not into the hands of the rank and file to spend into the economy.

      This magic show has lasted 12 years now ,and looking at Japan could run much longer.

      Collapse the artificial markets in derivatives , tax the wealthy and reform the banking cartel system seem the only solutions.

  7. A 7

    I think msm should be interviewing Weka!

    Nailed it on multiple points including UBI…grrrrr…

    People just don't understand how our system works against people and ultimately itself creating welfare winners/losers. One particularly nasty side effect of media coverage is that beneficiaries (incl those working with subsidies) who can make their budgets work and even save for retirement going into judgement against those who cannot. After all if THEY themselves have enough clearly anyone who doesn't is a druggie/gambler/dumbass who needs to learn cooking skills, gardening and basic math. This is so very wrong…the system design ensures severe pockets of deficiency and enforced dependency and shame. The division of broad groups such as "pensioners" etc won't identify were the division of privilege vs poverty lie as it comes down to individual circumstances.

    We need as many people as possible to understand this ^^ point before spouting policy concepts based on an afternoon's reading. Hopefully then we can ensure system changes don't cause more harm.

  8. Sacha 8

    Decrepit? Our oldest generation now are not boomers but their parents, if that label is going to be used (which I agree is wrong and sloppy besides).

    Eaqub and other policy analysts have previously talked clearly in generalisations about economic trends across whole generations, not specific subgroups or people. Of course it won't apply to everybody. For instance,

    https://www.stuff.co.nz/business/property/117270716/home-ownership-at-lowest-level-in-70-years-economist-says-baby-boomers-to-blame

    Eaqub said the Baby Boomer generation had been perfectly positioned to ride a wave of favourable economic conditions.

    He said the "entire economic experiment of the last 30 years" had led to a big transfer of wealth to Boomers, or those born in the post-World War II period.

    "There was a big surge of inflation in the 1960s and 1970s that robbed older folk of their assets and transferred wealth to Baby Boomers. They then rode the wave, asset prices are now at levels that we haven't seen in any generation in the past.

    "The ownership of assets is concentrated among older people and it's getting harder and harder for younger people to get in."

    I first saw this pattern spelled out ages ago by an NZ academic in the immediate aftermath of our first Act govt in 1984 – which looks like it's back as an ebook: https://www.bwb.co.nz/books/selfish-generations

    Policy-led advantages have followed that generation throughout its life – schooling, employment, income tax rates, housing, and now superannuation.

    What other label should we use as shorthand if not Boomer?

  9. pat 9

    Think the framing is unnecessarily narrow….we are not squabbling over the welfare pie, we are squabbling over the pie.full stop (or at least we should be).

    What is the one simple thing we could do that would address the myriad of groups and issues that are evident in our society?….reduce inequality.

    What is the best (and proven) method of reducing inequality?…..redistribution through taxation.

    Why do people (of all political persuasions) dislike tax?….because they dont perceive a personal benefit for the outlay.

    Theres an obvious solution, but one that takes some planning and work but most importantly the will and recognition of the requirement……and salesmanship

  10. belladonna 10

    Labour need to be doing something about rest homes for the elderly, they are beyond disgusting. Take your assets, feed you crap, are mentally abusive, tax them why dont you.

    Dont think many elderly will be voting Labour next election, open your eyes Labour.

    • weka 10.1

      I agree. I'm hoping I die before I get to that stage.

    • John Clover 10.2

      A reason why I am keen to stay and die in my own house rather than go to a rest home smiley So many bad story's about rest homes and so called care.

  11. Nic the NZer 11

    Unfortunately Eaqub is still a mainstream economist. This makes him convinced that tax and spend can ultimately only redistribute wealth. But the govt can today fund poverty relief programs without defunding any other programs or even collecting more tax (these two goals are not in competition for scarce resources except in Equabs mind).

    I still think a job guarantee program (in addition to better funding existing welfare) would do a lot for poverty relief via the following mechanisms,

    * providing secure income to those who want to earn it.

    * improving career prospects (due to more consistent in work history) for people who struggle to find secure work.

    * improving self image for the participants.

    * improving later work prospects of children of participants.

    • pat 11.1

      Getting the NZ left (especially the established elite) to accept progressive taxation/redistribution is far more doable than convincing them (and the electorate) of the validity of MMT, especially in the face of international opposition.

      Western europe operates within the current paradigm on considerably higher tax to GDP rates

      • Nic the NZer 11.1.1

        No, its just the constant framing which confuses people. This and the people like you who understand the MMT description of the economy is cogent but prefer the mainstream simplification of assuming the economy is effectively in equilibrium because then you don't need to justify that bonkers belief system.

        Once people understand that to the government, government money is just like tickets, then its pretty simple to understand.

        • pat 11.1.1.1

          you know my reservations around MMT and I suggest to you I'm far more generous than most, you are not going to convince the elite its an option, certainly not until /if a major economy or a substantial proportion of our trading partners accept and adopt it

          • Nic the NZer 11.1.1.1.1

            I may have over-estimated your fluency in MMT then. Its not something which can be adopted, its just a more coherent description of how the economy functions by incorporating the way governments spend.

            Apparently this was never clear enough in our discussions about effects on the forex markets, but simply put, when the government deficit spends today by borrowing or taxation this is accounting equivalent to what happens if the govt does the same spending without borrowing or taxation.

            • pat 11.1.1.1.1.1

              yes stick to your accountancy and continue to ignore market reaction…I am not going to rehash old arguments as it is a pointless exercise…you promote MMT and I do not….leaving that aside do you honestly think its more likely to be accepted by the elite than progressive taxation/redistribution?

              • Nic the NZer

                If the elites understand it or not seems to be as relevant to its economic effects as understanding gravity is to its physical effects. The same things happen if you undertstand them better or worse though making predictions becomes easier/harder if you apply/don't the better understanding.

                You should also understand accounting equivalent means the equivalent transactions occur in the same markets. Why your mental model (for how the market reacts) then draws different conclusions about what happens just appears bizarre, but i guess your as welcome to hold your own personal economic belief system as anybody else is.

  12. peterlepaysan 12

    I am inherently sceptical, especially about economists.

    Eaqub was being deliberately provocative. Choice of words was unfortunate.

    As a 77 year old peasant on 2.4 hectares shared with sheep, cattle ,horses.

    I also drive a rural school bus run 40 weeks a year.

    Where the hell does this theoretical dreamer touch reality?

  13. SHG 13

    Not all women are weaker than all men. Some women will be stronger than some men.

    Doesn’t make “men are stronger than women” a nonsensical statement.

    The elderly are richer than the young.

  14. peterlepaysan 14

    An unfortunate quoted comment.

    As a natural born sceptic I view economists with somewhat jaundiced eyes.

    I had the misfortune to study it as well.

    Income testing is excellent, definitely needs a debate. It will probably get mixed into the capital gains tax debate from Simon and her mates

    Telling the privileged rich list that they night have to lose a few dollars is unmentionable.

    I am sure the intellectual heavyweights at the tax payers union will have a lot to spray about

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