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Labour’s two tier welfare plans

Written By: - Date published: 11:17 am, September 5th, 2020 - 74 comments
Categories: ACC, benefits, Economy, grant robertson, poverty, welfare - Tags: , ,

Could Labour’s first major policy announcement be a permanent unemployment insurance scheme similar to that advocated for by ACT?

Ouch. That’s the headline from a piece at interest.co.nz looking at Grant Robertson’s idea of a two tier welfare system.

The proposal is to have an ACC-like insurance scheme for newly unemployed people. It’s a time limited payment “which gives people security and keeps them connected to the labour market”.

The scheme could payout the same to everyone, or be related to the income they had been earning. Funding would come from government, employer and employee contributions.

He denied it was middle class welfare, in that people who lose higher paid jobs could get paid more than those who lose lower paid jobs or are longer-term welfare dependents, unable to work.

“There are two different debates here. I don’t think it’s useful to draw them together. One is about the adequacy of the welfare system, the other is about what we do in situations when people lose their jobs and how we keep them in the labour market,” Robertson said.

Yeah, thanks Grant. We get it. You are developing separate policy that will help the working and middle classes, while continuing your intentional neglect of the underclass. We fully understand where your priorities are at.

This is entirely consistent with Labour’s approach to social security. They see welfare as a necessary evil, not to be encouraged, and that all problems can be solved by work. Except those that can’t, but that’s ok, because Labour’s plan is to a) stop people falling in a hole, b) pull up the people from the hole that they can, and c) leave the rest in the hole but hidden behind a nice curtain of kindness rhetoric.

Too harsh? Labour have sat on their hands for three years with regards to welfare, almost completely ignoring the WEAG report. They didn’t even have a go at the low hanging fruit, this isn’t real politik it’s ideology.

Maybe welfare is a second term project, but here they are signalling that they want to attend to people who are doing ok and the sound of silence around the underclass is deafening.

Meanwhile, Carmel Sepuloni is talking about how to get people on a benefit to do voluntary work. Not so they can have better lives, but to get them ready for the jobs that Labour believe will heal all ills.

The ironic cruelty here is that the biggest barriers to beneficiaries doing voluntary work come from Work and Income punitive policies that Sepuloni oversees. Some of that is cultural (if you do voluntary work you’re not serious about looking for a job), some of it is bureaucratic (if an interview at WINZ to keep prodding you to look for work clashes with your voluntary job you will be penalised if you priorities the voluntary commitment).

Sepuloni appears to have done nothing about those barriers. Typically, while WEAG advised making volunteering more accessible because it helped beneficiaries be part of their community, Labour want volunteering to be part of their work-ready programme. A programme which has often worked against the wellbeing of beneficiaries and their community.

Thirty years on from Marilyn Waring’s Counting for Nothing and we are still stuck in ideology that paid work is the be all and end all. Yet unpaid work holds up our society. Were we to value that we might put wellbeing at the centre of the economy isn’t of it being a superficial overlay. Helping out at the marae or raising a child on a benefit might not be the big bucks export earner that so many extol, but we are lost without them. Why do we value them so poorly?

For Labour the point of volunteering is to prepare for jobs, but those are jobs that are rapidly disappearing, and many of which were poorly paid with poor employment conditions. Hard to see how the people moving in and out of low paid work are going to be helped by an insurance scheme they don’t earn enough to pay into, but hey, at least they can do unpaid work to keep their hand in.

I believe the kindness stuff is real. I think that Labour has good people in it and many of them value compassion and want the best for people. Unfortunately that’s not enough and it shows in the policies that Labour produce (or don’t produce).

It’s not that I object to Labour making plans around support for people who lose their job. Obviously we are in a major crisis with covid, and this has to be done. What I don’t understand is why Labour haven’t been addressing the equally serious crises around welfare in the past three years and still won’t go there.

And before anyone says ‘oh but the winter energy payment’,

There are real alternatives. From the Interest piece,

It’s questionable whether the Green Party would support such a regime, should it form a government with Labour after the election.

It wants the country’s welfare system boosted in line with recommendations made by the Government’s Welfare Expert Advisory Group.

The Green Party also wants to ensure that everyone who isn’t in paid full-time work, including students and part-timers, receives a ‘Guaranteed Minimum Income’ payment of at least $325 a week after tax. Single, childless people on Jobseeker Support currently receive $251.

The Greens’ GMI is part of a whole package designed to address all the interlocking issues that make up the massive poverty elephant in the New Zealand living room: housing, welfare rates, WINZ culture, barriers to work, racism, sexism.

Now that we’re in a covid world, I fully expect many of the middle classes, even those on the left, to support Labour’s vision of solutions rather than the Greens. Of course they will want to protect their own. But if mainstream NZ votes on that self interest we can no longer pretend we are willing to do much about poverty other than say we want it to end.

If 2017 was the election of a major cultural shift around values, where New Zealand said we want kindness now, then 2020 is the election of putting our money were our mouth is. The left is looking set to win the election, so the choice now is about what kind of left government do we want?

front page photo via Medium.

74 comments on “Labour’s two tier welfare plans ”

  1. Sabine 1

    that two tier system was started with the Covid unemployment benefits. Everything else is just par for the course.

    btw, what happened to Bill?

  2. Graeme 2

    Looking at it from the point of view of the employed it looks more like nationalising, and making universal and more secure, the redundancy provisions enjoyed by some people with strong union representation.

    Hopefully the scheme will also extend to the self-employed who find income protection insurance pretty expensive, and very restricted in coverage.

    • weka 2.1

      I'm sure there will be many that like the plan. Wouldn't nationalising be if they took over the private schemes?

      My main issue here is that Labour understand the necessity to do something given covid, but only for some people. Too bad the others.

      • Graeme 2.1.1

        If it's done as well as ACC was it will effectively collapse the private redundancy and income protection schemes because they won't be able to compete on price and coverage.

        If you are insured you won't have any coverage if your income loss can be linked in any way to the pandemic, and that will be everyone as the economic downturn has been caused by the pandemic. Since most, if not all, redundancy schemes are funded by insurance there could be some sorry tales coming up if there's a major tits up with lots of redundancies.

        Redundancy payments are very two tier as well, some industries and employers, really good, others, nothing.

        • weka 2.1.1.1

          the pandemic isn't covered by private insurers? Why not?

          • Graeme 2.1.1.1.1

            Standard exclusion on any commercial policy for pandemic. It's included in the definition of 'emergency' in the current ADLS commercial lease which caused all the kerfuffle with leases through lockdown because landlords couldn't claim the loss through insurance.

        • Draco T Bastard 2.1.1.2

          If it's done as well as ACC was it will effectively collapse the private redundancy and income protection schemes because they won't be able to compete on price and coverage.

          Yes, this is true, the private sector simply cannot compete with the efficiency of a government department run well.

          Probably explains why the governments of the last four decades have gutted and fucked over government departments.

    • Pat 2.2

      Nationalising my arse…its a privatised scheme to provide an income stream to the insurance industry…there is no advantage to anyone except those who will clip the ticket and the politicians who will be able to disown control

      • Graeme 2.2.1

        And how's this privatisation? Would you prefer accident insurance to be private too?

        • Pat 2.2.1.1

          "And how's this privatisation?"

          A couple of points…first off the scheme has been floated without detail so we cannot say whether it is or not, but in the absence of detail I will assume the worst until such time as they front up. And I further note ACC has been 'reformed' numerous times and prepared for sale by previous administrations and as stated earlier it is not time limited (yet). The fact that the self employed may find income insurance expensive and restricted is neither here nor there, those policies are discretionary and not a requirement of doing business but more importantly the self employed are entitled to the unemployment benefit should the circumstance arise the same as everyone else. its not as if they dont have 'cover' now. Redundancy discrepancies are also moot, the fact some employers offer (and honour) redundancy clauses in contracts is disconnected from unemployment benefits, and I suspect most employers prefer it that way.

          This is simply one more step away from Government responsibilities….the bathtub awaits.

          • Graeme 2.2.1.1.1

            This is simply one more step away from Government responsibilities….the bathtub awaits.

            Sorry, I see this as the exact opposite. I see this as the government stepping in to provide where the private sector is going to fail, and fail big time. Government has the ability to handle much more risk than private, and do it more efficiently by socialising that risk over the whole population. Just like ACC does with accidents.

            Just as ACC allows us to enjoy many high risk recreational activities, tramping skiing fishing hunting are examples, without it costing us an arm or leg in premiums or risk of getting sued if there's an accident, having a comprehensive state income insurance scheme will allow employees and employers to handle a bit more financial risk as our economy transforms because of this pandemic, changes in work, climate change and all the other upheavals we seem headed toward.

            I'll concede that details are pretty light but from what's been given, comprehensive, shared state employer employee funding and sheer scale it's looking pretty similar to the ACC model.

            • Pat 2.2.1.1.1.1

              "Just as ACC allows us to enjoy many high risk recreational activities, tramping skiing fishing hunting are examples, without it costing us an arm or leg in premiums or risk of getting sued if there's an accident, having a comprehensive state income insurance scheme will allow employees and employers to handle a bit more financial risk as our economy transforms because of this pandemic, changes in work, climate change and all the other upheavals we seem headed toward"

              As I commented to KJT yesterday….its a win win for business/politicians, all at the expense of the workers/unemployed.

              And my original question remains unaddressed….what are the unemployed expected to do after the (max) 6 months?

              • Aurelius

                Once insurance runs out, you would still be able to apply for the regular unemployment benefit.

                My feelings on unemployment insurance are mixed. On the one hand, the rate suggested by Robertson and the Council of Trade Unions (80% of your average salary for the past six months) is extremely generous and would put New Zealand in the same level of generosity as Scandinavia. As Jonathan Boston wrote in Transforming the Welfare State, welfare is far more accepted when it is insurance-based, because of the illusion that it is your own money (ACC and Kiwisaver are examples). In this system, short-term unemployed would have far better lives and beneficary-bashing would be eliminated. Welfare cuts would be far more difficult to either execute or justify.

                On the other hand, if you barely surviving to begin with, 80% still might not be enough, and in an especially poor economy, you may not be able to find a decent job within six months of redundancy, and end up at the mercy of WINZ anyway. For this reason, I think that while the insurance option should be explored, it should be paired with the Green Party's Guaranteed Miminum Income for those whose insurance expires.

    • Draco T Bastard 2.3

      Hopefully the scheme will also extend to the self-employed who find income protection insurance pretty expensive, and very restricted in coverage.

      Perhaps, if they weren't cooking the books so much, they'd get the coverage that they need.

      • Graeme 2.3.1

        Well in our case we would have a huge loading because my partner has had MH issues requiring admission, and we have variable / cyclic turnover and profit. So cover is fucking expensive and based on the bottom of the cycle. And we'd get nothing right now because of pandemic exclusions.

        I know someone who had income and business insurance for communicable disease (childcare industry, so identifiable risk), had been buying it for years only to have the company cancel the policy on 20 March. She wasn't very happy.

        ACC Cover Plus is the best, and a pretty good, option for accident, but doesn't give an help for medical or redundancy / tits up because your industry's gone ta ta for the foreseeable. Standard ACC doesn't do much for self employed because of how tax laws work.

        • Draco T Bastard 2.3.1.1

          I know someone who had income and business insurance for communicable disease (childcare industry, so identifiable risk), had been buying it for years only to have the company cancel the policy on 20 March. She wasn't very happy.

          So, the company realised that they couldn't afford to payout on the policy without going bankrupt and that it was no longer going to be profitable to offer such a policy (because they realised that they'd have to pay out rather than getting what amounted to free money) and so cancelled it.

          That is capitalism, why are you surprised?

          Thing is, I know small business people who boasted of paying very little in tax and ACC and then who had the gall of complaining that they were only getting 80% of their reported income from ACC. Their actual income was, of course, much higher but they weren't paying the proper amount of taxes on it.

          • Graeme 2.3.1.1.1

            That's all reasons why this isn't 'two tier welfare' but vital protections of workers' welfare.

            Under / no insurance is rife in business, and not just small. Same people who minimise their ACC premiums will have minimised other insurance as well. All good until something goes wrong when it rapidly turns pear shaped for all involved. Add into that the standard commercial exclusion for pandemics and the pandemic related redundancies are likely to get very messy when employers discover they don't have insurance cover for the redundancy payments because the insurance co. is arguing is't due to pandemic.

            Much better to have a comprehensive universal state system that's there when it's needed.

            • Draco T Bastard 2.3.1.1.1.1

              Much better to have a comprehensive universal state system that's there when it's needed.

              Yes, we could call it the unemployment benefit and make it available to everyone.

              And we could even do it without creating a two tier citizenship as this policy from Labour seems set to do.

              • Graeme

                So we get rid of redundancy payments and just stick people on the dole?

                • Draco T Bastard

                  Did I say anything about redundancy payments?

                  We're talking about Labour's policy that will make NZ a two tier citizenship society.

  3. Jum 3

    Meanwhile, nats and act and nzfirst must be laughing their way through this one. Who needs enemies when you've got 'friends'?

    Divide and conquer has always been a very focussed strategy always employed by one side to reduce the other. When will Labour and the Greens ever learn?

  4. Kay 4

    Don't hold back Weka! smileyprobably not harsh enough…

  5. bwaghorn 5

    The clues in the name , The LABOUR party .

    Although they ain't that good at looking after labourers either the.

  6. Chris T 6

    Kind of fluff isn't it?

    Putting aside it shows Robertson might as well be in National, the Greens would never vote for it.

    • Rapunzel 6.1

      However he's not & that's because there's "more than one way to skin a cat" sometimes you need to take the long way round to get it done but at least it will have a chance of happening

      • Chris T 6.1.1

        I don't agree with it happening, as much as Robertson and ACT suggest it might.

        I actually can’t believe Labour supporters would seriously justify a 2 tier benefit system depending on hierarchy of status

        • Rapunzel 6.1.1.1

          The closest to "purest" from National or Act are the usual vague "promises" that aren't what they seem like Collins "baby bonus" which will suit the hardliners. What was necessary now to shore up the listing ship in the face of the virus is not a long term two-tier system that will remain in place. Post election, with more everyday NZers having become "beneficiaries" it will be far easier to implement a fairer system long term perhaps I should have said "a means to an ends" than "skin a cat" and again "at least it will have a chance of happening"

  7. Corey Humm 7

    This makes me sick. So clearly labours not releasing it's policies because it's gonna be next level neoliberal.

    The winter energy payment and rent freeze ends two weeks before the election, the most vulnerable people in NZ many who vote labour are gonna lose $40 and $60 and have a rent increase right before an election and many of my unemployed friends will stay home instead of voting green, they simply don't understand the electoral system and how it works my friends and many people I come across like them anyway.

    The family package does nothing for solo beneficiaries. Nothing.

    The two tier welfare system is a disgrace and anyone who thinks their covid benifit will last long after the election when labour doesn't have to worry about the newly unemployeds votes is lying to themselves, you'll be chucked in a regular benifit.

    The idea of an employment insurance being touted by the labour party is the biggest example of we know welfare is unlivable but bugger them they'll vote Labour and if they don't they'll vote green (no they'll stay home) ugh labour is a disgrace if this is where they are going

    Why can't disabled and mentally unwell people get covid benifit rates atleast? Labour and nz in generals attitude to mental health "we care about mental health our suicide rates are horrible" but privately "get off the couch stop crying and get a job you bum"

    Labour absolutely in no uncertain terms cannot achieve a sole majority and the greens including Marama now, need to be in cabinet to stop this crap. I have been furious with the greens and alienated by them for a while but hell no. If this is the direction labour intends to go, two ticks green and I'll never vote for a labour electorate candidate again. Ever and I live in a swing seat. Bugger this bugger labour.

    Release your policies labour so we can see where you plan on taking this country. No more hiding behind kindness. I talk a lot of crap about labour but I am labour to my bones… Not after this and never again IF this is where they are going they need to change their name to the liberal party, immediately.

    • weka 7.1

      "Why can't disabled and mentally unwell people get covid benifit rates atleast?"

      This is why I believe it's ideological. If it weren't there would have been changes made in this area at least.

    • weka 7.2

      I share your frustration. I still hold some hope that a L/G govt without NZF and with more Green MPs could do some good things with welfare. But the Greens need enough negotiating power post-election.

    • rod 7.3

      Pray tell us who are going to vote for then C H ? Jude ?

    • Anne 7.4

      Release your policies labour so we can see where you plan on taking this country. No more hiding behind kindness. I talk a lot of crap about labour but I am labour to my bones… Not after this and never again IF this is where they are going they need to change their name to the liberal party, immediately. (My bold)

      Well you said it Corey H (my bold) so how about you get with these abnormal times.

      We're in the middle of a pandemic which has the potential to decimate the human race and destroy the economic well-being of the world. Who is going to be the worst hit if that happens? The so-called under-class. So, it is in their interest for the Labour-led government to concentrate their efforts on avoiding the worst of the effects. That might mean a few nice to have policies have to go on the back burner for a wee while longer. Maybe not – we will soon know.

      I think some of you are getting ahead of yourselves. The official campaign begins on Sunday 13th of September – a week away. Be prepared for the unveiling of their policy planks around that time. No political party releases the details too early to avoid their opponents stealing them. National has a history of doing so.

      Only then will we be able to pass informed judgement on whether their polices are neoliberal ideology inspired or – far more likely – taking into account what can and what can't be achieved in the current very shaky times we live in.

      • weka 7.4.1

        "That might mean a few nice to have policies have to go on the back burner for a wee while longer."

        Did you just describe policies that help beneficiaries not live in poverty as 'nice to haves'?

        • Anne 7.4.1.1

          No weka. Policies to help beneficiaries was not on my mind.

          I've been there. I know what it is like. I've been on the receiving end of it – not the least from Winz itself back in the 1990s. Being treated like a loser as a result of circumstances over which I had no control.

          They even put me under surveillance at one point, but unfortunately for them they targeted a wrong person – someone able to write them a ‘very sharp and educational letter’. They ran for cover!

          • weka 7.4.1.1.1

            I think that paragraph was unfortunately phrased, because it read like Labour should focus on the pandemic rather than welfare policy.

      • Sabine 7.4.2

        Consider please that the only reason we are not in early election now is because it got pushed out. the original date was 8 th September if i am not mistaken.

        So by now Labour could/should have already unveiled some policies. Last i spoke to the contender here in middle nz she too was not 'going to speak about policies'.

        The question really is why would anyone consider voting for someone who does not want to talk about the future. And yes, i hope that the green school gets dumped in favor of a few pennies for the poor. And for that matter any other project like that – should not be funded currently by government.

    • Morepork 7.5

      " Labour absolutely in no uncertain terms cannot achieve a sole majority "

      I wouldn't be so sure. If NZF and the Greeens vote dips below 5%, the Labour could well have a majority over the centre right parties.

      • Draco T Bastard 7.5.1

        If Labour keep launching policy like this then we can expect to see their vote declining and the Greens going up.

        • Morepork 7.5.1.1

          You could be right. I was reflecting on the backlash to the private school funding. This may well push any wayward green voters back into their corner.

  8. sumsuch 8

    I feel the loss of the Alliance. Can you imagine their howls and growls about this. Versus the Greens.

    • Draco T Bastard 8.1

      The Alliance still exists – somewhere.

      Can't hear them.

      • Dennis Frank 8.1.1

        Schrodinger's cat situation:

        The party was formally deregistered with the Electoral Commission at its own request on 26 May 2015. Without registration, the party cannot contest the party vote. As of May 2020, the party's website remains online with an active blog. The website describes a conference planned for August 2016 but it is unclear if this went ahead.

        https://en.wikipedia.org/wiki/Alliance_(New_Zealand_political_party)

        • Draco T Bastard 8.1.1.1

          Earlier this century I was a member but it became obvious that the party was in decline and that it wasn't coming back and so I left. There appears to still be some die-hards there.

          It is a pity that the time that the Alliance was the most successful was also the time that it was least effective. With 27% of the vote and only two seats in parliament.

  9. Nic the NZer 9

    The underlying issue is that since the 1984 election the government has abandoned its commitment to create full employment. The fairly regular result of this policy is for there to be insufficient jobs to employ everybody who wants to work.

    As the voluntary work changes imply people who are in work do find it easier to get other (more rewarding) work. The cost of the country maintaining a pool of unemployed (for economic policy purposes) is not only the direct loss of their contribution but also the lack of career development which impacts later (on their productivity) even after they do find work.

    The is something very vulgar about the constant work ready testing regime applied to beneficiaries which doesn't even acknowledge the simultaneous govt policy of unemployment being at least x%. Its certainly obvious to all that not everyone is going to be able to find work regardless of how hard they are incentivised to try.

    • weka 9.1

      do you know what Robertson means by "the other is about what we do in situations when people lose their jobs and how we keep them in the labour market"

      How does giving more money to a selection of wealthier recently unemployed people mean they are more likely to get another job? Is it as simple as having the resources to look for work and have nice clothes for interviews? Although most people aren't going ot lose their nice clothes in the first 6 months. So what is it?

      The volunteering thing makes sense in the abstract (looks good on the CV), but if there aren't enough jobs all this means is that the people with the better CVs get the limited jobs, not that more people get jobs.

      I think full time work for everyone is gone now and we should be looking at other models. We didn't have all adults in full time *paid work until relatively recently in history and then we lost it again quite quickly, so I'm not convinced it's a sustainable way to run things.

      • Gabby 9.1.1

        It looks as if Grant believes the middle class unemployed are entitled to be comfy and the poor can pay for that. Unless he sees the recently unemployed getting no more back than they have paid in?

      • Brigid 9.1.2

        I wondered about Robertson's 'keep them in the labour market' claim too.

        It suggests that those already unemployed are by definition not worthy of being kept 'the labour market'. What ever the fuck that means.

        It's just bullshit talk to justify bullshit.

        [Fixed typo in user name]

        • Draco T Bastard 9.1.2.1

          It's just bullshit talk to justify bullshit.

          Yep.

          It's not designed to fix the problem that is a system that has high unemployment as normal. He's trying to keep the failed neo-liberal paradigm in place and so things are going to keep getting worse under Labour.

      • Draco T Bastard 9.1.3

        I think full time work for everyone is gone now and we should be looking at other models.

        Could just reclassify full time from 40 hours (Well, 30 actually) down to, say, 24, and ensure that pay rates adjust to cover the decrease. Minimum wage increases from $22 (IIRC, present liveable) to $29 @ and $36 @ 24.

        Of course, that's not going to help those who have been working 50+ hours.

    • Draco T Bastard 9.2

      As the voluntary work changes imply people who are in work do find it easier to get other (more rewarding) work.

      I checked out doing volunteer while unemployed work a decade or so back. Did the sums and realised that I couldn't actually afford to do it. The cost of the bus fares was too much especially if I wanted to ensure that I had enough to go to an interview as well.

      I doubt if anything has changed since.

      Its certainly obvious to all that not everyone is going to be able to find work regardless of how hard they are incentivised to try.

      When the government runs high unemployment policies, which they've been doing since the 1980s, then its inevitable that there will be long term unemployed which is fully not the result of the desires of the unemployed. High unemployment, and thus also long term unemployed, is a direct result of government policies.

      Thing is, even many on the Left seem to have accepted high unemployment as normal, seemingly forgetting that one of the reasons why we had Penal Rates was to encourage full employment. The other, of course, was to encourage development of machinery to do the work but that's been forgotten as well as the lack of Penal Rates has turned us into a low wage nation that imports even lower waged workers to do stuff that should be done by machine.

  10. KJT 10

    @Graeme.

    I agree.

    However it should be noted that the reason why so many self employed get minimal ACC payments, is because they are not paying the levies on the income, they hide from the tax man.

    Incidently the reason why National wants to subsidise businesses on a per business basis, rather than on the number of employees/sole traders, paying tax. Too many of their tax dodging mates are missing out.

    As a PAYE earner more recently I've been fine at the prompt and comprehensive help from ACC with injuries.

    However the avoidance of ACC paying cover, applied to people I know with mental health or gradual process injuries from work, has been disgusting.

    This of course is a result of the profit making imperative that has taken over ACC culture, to fatten it for future privatisation.

    Certainly ACC should be extended to illness. At present Ill people are subject to a two tier system which leaves them, mostly, much worse off than those with ACC cover. That would be a popular policy with almost everyone. Except for the aformentioned tax dodgers, of course

    But. It should be under the initial model, not the way it works now.

  11. Barfly 11

    Nah I 'm sure it's just a cunning ploy by Robertson to help the Greens get over 5%. devil

  12. KJT 12

    @Nic. 9.

    Employers who benefit by the implicit subsidy of a set level of unemployment, should be contributing to paying unemployment benefits.

    Of course low paying employers are also subsidised by welfare topups their employees have to have so they can live. And the infrastructure the rest of us have to provide for their cheap labour.

    Maybe an ACC type employer levy that goes up the lower the wages paid, compared to company profits?

    Where is the "tax payers union" when we need them?

    • Draco T Bastard 12.1

      Helping the people you suggest should be paying more taxes because of their poor practices not pay any taxes.

  13. KJT 13

    The reason why ACC has been to a large extent "Tory proof" is that everyone, including the corporates who buy our Governments, benefit from it.

    National’s attempts to privatise it have been quietly, buried. You can be sure it was at the request of their bribers/sorry, funders, not because of public outcry.

    They know a privatised version, or a return to the US version will cost them much more.

  14. Nic the NZer 14

    @Weka, If I read that charitably the Robertson means people in that situation will keep looking for work in line with the job they lost for longer, before lowering their expectations.

    But this policy isn't going to work. Its ridiculus to ask the economy to save so much that it can cover the shift in govt spending when a recession occurs. Basically the GFC and Covid recessions occur because of a shift towards the citizens saving (e.g when your locked down but still getting income you are going to be saving more because discretionary spending falls almost automatically). To the extent this saving isn't replaced by additional govt spending (I'm ignoring shifts in foreign sector trade for a moment) then you get a recession (fall in GDP). In NZ this was not too great because the wage subsidy kept paying people who lost out due to the fall in discretionary spending. But the idea that the private sector has enough saved to buy its way out of the savings shift is clearly pretty silly. At best it will be like disaster insurance, easy insurance profits during good times and insurance bankruptcy when the payouts are most needed.

    Finally, think about full employment on an individual level. This means for that individual they are able to have enough work to keep themselves and their family satisfied. This exists even if the work week was shorter (say 25 hours), for some it will be part time. But there are only two reasons this would not be available,

    1) because there is literally nothing for them to do.

    2) because nobody is willing to pay them to do that.

    Until around 1984 the govt ensured that 2 was loosely in effect by hireing anybody at least somewhere. But I believe your saying returning to a political regime which resolves 2 no longer works. So it must be true that there really not enough to do? I simply don't agree.

    • Draco T Bastard 14.1

      But the idea that the private sector has enough saved to buy its way out of the savings shift is clearly pretty silly. At best it will be like disaster insurance, easy insurance profits during good times and insurance bankruptcy when the payouts are most needed.

      We have a prime example of how private insurance fails in the Christchurch earthquakes. The private insurers simply didn't have enough money to cover all the damage that came under the policies that they had offered and so the government had to step in and let them off the hook.

      This proved, quite conclusively, that private insurance is a scam with the sole purpose of getting high profits from doing as little as possible.

      So it must be true that there really not enough to do?

      There's enough to do but it doesn't involve the bludgers getting a high profit and so the government avoids it.

      We've tried the so-called service economy over the last few decades but all that's brought about is higher poverty and a decreasing rate of development in the economy.

      What we need now is an R&D economy where everyone is encouraged to get a degree or three with the government ensuring that they will be hired in R&D that will get our manufacturing back but in a form suitable for the 21st century. That manufacturing will be set to provide NZ with what it needs and very little will be for export as it will be expected that other nations will have their own manufacturing.

      As I say, in a free-market with productivity as high as ours is, there is no international trade.

      • Paulus 14.1.1

        Only one Insurance Company went bust through incompetence management AMI Insurance.

        A local Mutual.

        [I fixed the typo in your e-mail address. Please stick to one user name here from now on, thanks – Incognito]

        • Draco T Bastard 14.1.1.1

          There were numerous points about the Christchurch payouts and not just that only one insurer went bust. Quite often, the insured weren't getting what they were insured for. People were having to go to extraordinary lengths to get what they were insured for which many simply couldn't afford which all means that the insurers didn't pay out what they were supposed to.

          Consider, almost a decade later according to this article, many still hadn't been paid out.

          I'm not seeing anywhere that the insurance industry worked well in Christchurch. Completely the opposite, in fact. I figure that there were two main reasons for the tardiness and low payouts:

          • The insurance companies, including the huge re-insurers simply didn't have the money
          • They, of course, simply didn't want to pay out

          And the government came in to help the insurers.

          There is, of course, one other major issue which, even if the insurance companies could and would have paid out immediately, they couldn't have done anything about and that which would have needed government support for:

          • The simple fact that there wasn't any workers available to re-build

          To get Christchurch back on its feet quickly required that the rest of the NZ economy had to be put on hold and that didn't happen.

          The pandemic has brought forth the need for that government support again and, again, we know that the private insurance business can't, and won't, pay. Thankfully, this time we have a government that's stepped up but they're still trying to do as little as possible rather than what's actually needed as this policy shows.

  15. SPC 15

    The NZF is campaigning with the message that they were a handbrake on Labour on welfare policy.

    They probably got agreement for the increase in baseline benefit by $25 by doubling of the power cost income supplement income (which those on super as well as beneficiaries get).

  16. SPC 16

    It's good politics, people will now be feeling less secure in their employment – so its an optimum time to bring in compulsory insurance to cover them in the between employment period..

    It's also good for budget management – as it means there is provision made for periods of higher unemployment.

    and how we keep them in the labour market

    Meh, it's about having the earnings to continue to pay the rent power bills etc.

  17. Foreign waka 17

    Looks to me that Labor wants to find a way to privatize some of the benefit payments (Unemployment/ACC) but tries to put leavers in to still look like that they support the unemployed. How, would be anyone's guess. Looks like a monetary exercise as we now have to pay back the billions spend. The day of reckoning has arrived.

    What is needed is a different approach to work per se and leaving the concept of that slave mentality behind. I am actually disappointed that when the chips are down, this government proves to be no better than any other.

    Can we see some costings when an UI is being implemented verses all these corporate welfare payments that seem to surface all the time?

    • Draco T Bastard 17.1

      What is needed is a different approach to work per se and leaving the concept of that slave mentality behind.

      This pandemic has proved that capitalism doesn't work (and so did the GFC and every other recession) and so we should be getting rid of it.

      I am actually disappointed that when the chips are down, this government proves to be no better than any other.

      That's because they're trying to avoid having to do what's necessary so as to keep capitalism in place.

  18. Jum 18

    Jum 3

    5 September 2020 at 4:02 pm

    Meanwhile, nats and act and nzfirst must be laughing their way through this one. Who needs enemies when you've got 'friends'?

    Divide and conquer has always been a very focussed strategy always employed by one side to reduce the other. When will Labour and the Greens ever learn?

    Reply

    Well, Weka, that's pretty much what I expected; a stupid joke at my expense.

    https://www.youtube.com/watch?v=8WxdaU9AsnU Why don't you watch 'The Newsroom' rant early in part one which contains a speech made by 'Will McAvoy' in which he explains about how NOT great america is. He mentions liberals which is our Labour Greens and why they lose. i.e. everyone I think is worth knowing on here is wasting their intelligence by just and I say a very worthy just, as it's LPrent's blog, they should ALSO be taking the battle to the printed word, reducing the influence herald has, or the perfectly good people (nats I'm sorry to say) that think hosking on newstalk zb is actually worth listening to. I know!

    My apologies and grateful thanks to those that are.

    But, if it makes others happy to pick apart what good has been done and in your naivety believing that Labour has the election in the bag, and isn't under threat, then you obviously don't know how insidious and evil greed really is in reaching self-interested voters' weaknesses.

  19. Jum 19

    PS I wish all left leaners the very best in the coming weeks. I won't be posting again, but everyone should know that this is simply the best blog.

    https://www.google.com/search?client=firefox-b-d&q=utube+simply+the+best

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