It has taken me a couple of days to absorb the implications of this story. On Thursday this week Stuff reported that “Treasury and Statistics New Zealand today admitted a major error in its calculations of household disposable income, which overestimated incomes among poorer households. This meant the number of children living in poverty was underestimated by 20,000, while the level of income inequality was also underestimated. English confirmed today that he had been told of the mistake before Christmas.” It seems that the OECD had to point out the mistake to the Government.
Apparently a treasury spreadsheet double counted accommodation supplements paid and gave a false impression of the level of poverty in New Zealand. This situation started in 2009 which coincidentally was the first year of this National Government. Of course nothing should be read into this.
The number of children officially in poverty increased from 260,000 to 280,000 and this is said to be only a modest increase. There are also more adults living in poverty than previously thought including 32,500 senior citizens but there is apparently nothing to worry about.
Get that? 20,000 more children and 32,500 more elderly living in poverty in Aotearoa is nothing to worry about?
English is reported as saying that everything is ok because no one has missed out on support or benefits and the errors would not have changed policy advice. Poverty being worse than previously thought is obviously not going to persuade National to do anything about it. English could have added that the mistake will not stop the Government’s building of Roads of National Significance or its approach to climate change, such is the relevance of the mistake to the granting of benefits.
But English knew about this problem in December 2013. Why did it take him so long to admit it?
No doubt Labour’s research unit will be peering over National’s comments on poverty made since December 2013. Formerly proud to be a westie Paula Bennett has made a few and given what we now know there is something not quite right about them.
For instance on February 12, 2014 she was asked these questions:
Metiria Turei: Does the Minister see, then, any connection between the Salvation Army’s D ranking of her failure over child poverty with her express refusal to engage with the Children’s Commissioner’s child poverty monitor project?
Rt Hon John Key: You mean D as in Dotcom?
Hon PAULA BENNETT: I have heard it said that it might be D for Dotcom, but what I would say is that the Ministry of Social Development household income report comes out. It does an accurate analysis of a number of measures. We report it transparently and publicly. It is certainly what we, on this side of the House, take notice of. As I say, it is very transparent. The member can get a copy of it any time. It is that advice that I take.
The latest MSD household income report was coincidentally released at the same time that English made his concession about the mistake. And the two events seem to be related because at that time MSD released this document detailing the effect that the mistake had made and the corrections it had made to previous reports.
But you have to wonder at the transparency of Bennett’s statement and given that the mistakes were known although MSD may have given an accurate analysis of a number of measures it was not accurate as to all of the measures it reported on. Specifically the reports on poverty.
And National call David Cunliffe tricky …
This next question may get Bennett into trouble.
Metiria Turei: Thank you, Mr Speaker. How, then, does the Minister explain that for all her rhetoric, chest-thumping, and political bluster, the reality remains that one in every five children in this country remains living in poverty after 5 long years of her Government?
Hon PAULA BENNETT: What we have seen by every measure is that it has flat-lined. …
This cannot be correct. Unemployment is up and the 2009 tax changes made things worse for the poor. And she must have known about the problems with the statistics by this time. It is inconceivable that she did not.
What I would like to see is a TV3 headline proclaiming that National has been dishonest on child poverty. The evidence looks pretty good, botched statistics known at the highest levels and a two month hiatus before acknowledging this. And a Minister refusing to accept that child poverty has worsened under National’s reign.