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NRT: Treasury, National, and child poverty

Written By: - Date published: 2:18 pm, February 28th, 2014 - 10 comments
Categories: Economy, national, poverty, same old national, treasury, welfare - Tags:

no-right-turn-256The original of this post is here at No Right Turn

Today’s Treasury fuckup: they underestimated the number of children living in poverty by 20,000:

A breakdown in communication between Statistics New Zealand and Treasury saw the number of children living in poverty underestimated by tens of thousands.

It also led to the gap between rich and poor being slightly underestimated.

Treasury admitted substantial errors were made in its calculations of disposable income levels in Kiwi families for recent years, but says the results had no effect on the “real world”.

“[T]here are no ‘real world’ impacts on New Zealanders from the miscalculations,” Treasury chief economist Girol Karacaoglu said in a statement.

Treasury has one job: adding stuff up. And its clear that they can’t do it properly. They can’t accurately forecast GDP (they systematically underestimate under it left-wing governments, and systematically overestimate under right-wing ones – almost as if they had an underlying assumption that the economic sky will fall in under the “wrong” government), and now it turns out that they can’t even track income distribution properly. And we’re paying them $78 million a year to do this. For that sort of money, accuracy is the least we can expect.

As for the idea that this had no impact at all, think about that for a minute. Sensible governments pay attention to the empirical evidence and use it to shape their policies and judge their performance. The only way such a massive error could have no impact is if National isn’t doing that on child poverty – that is, if it doesn’t care about it at all. We already knew that, but its useful to have it confirmed by another source.

In many ways what is even more irritating about this screwup is that it isn’t likely to be the children living below the poverty line that has an impact. It is the large numbers of elderly that Treasury has now discovered getting worse off and falling into poverty.  After all they have a vote. Whereas children don’t so the future accumulated costs of their poverty aren’t something that this government will concern itself about.

10 comments on “NRT: Treasury, National, and child poverty”

  1. Tracey 1

    the government doesnt believe poverty can or should be measured so treasury’s error is of no matter.

  2. The Real Matthew 2

    As long as Poverty is measured as an arbitrary percentage of the median wage the statistic is meaningless.

    If John Key left to live in Monaco tomorrow he’d be in poverty over there according to the left wing poverty ideology!

    • karol 2.1

      Measuring child poverty is complex and can differ from one country to another. However, the general rule of thumb stat (income udner 60% of the meidan household income), does show some differences in a given population over time. It does also provide a guide as to the extent of households expericning hardship. There’s some background in this stats NZ paper.

      Within that, more in depth reports, as this one from the Child Poverty report in NZ, differntiates between those children living in hardship, and those experiencing persistent poverty. These show the extent of negative impacts of poverty on the lives of children.

      • The Real Matthew 2.1.1

        You are quite correct Karol to say that measuring poverty is complex which is why taking an arbitrary 60% of median household income doesn’t work. It’s an inequality measure, not a poverty measure. As I suggested in my opening salvo, by that rationale a millionaire in Monaco would be in poverty which I think we can all reason is absurd.

        I believe a superior measure would be a Basket of Goods style measure taking into the account of the essentials.

        It would also be difficult as the same Basket of Goods can cost differing amounts across the same city let alone the same country but such a measure would be superior to an arbitrary percentage measure.

    • Tracey 2.2

      Rubbish.

      The right, while crowing about a rockstar economy, think if you are not scavanging on top of a dump for food, you should shut up and thank your betters.

  3. aerobubble 3

    Labour new chief of staff is a unionist. Workers wages hasn’t been keeping up, forcing families to borrow from loan sharks, etc. So is it any wonder that the sheer hate Key levels at the hiring of a unionist has been accumulating. Of course companies, who aren’t going to enter into good faith agreements with their workers, want to pariah the unionists. Unionists are no different than politicians, or councilors, or any other collective board representative. But Key hates the idea of them.

    And why? Well its simple, a welfare baby himself he unconsciously thinks welfare kept his daddy away from him. This would explain his weird rush down the parliament steps pulling his hair out scream that welfare is evil it took his daddy away, allegedly.

    We have poverty because we’ve had three decades of bad faith agreements by companies towards their employees.

  4. Stephanie Rodgers 4

    There’s something very grim about the statement “[T]here are no ‘real world’ impacts on New Zealanders from the miscalculations”.

    It’s grim because what Karacaoglu presumably means is “the people who we forgot to count as living in poverty were already living in poverty”. Their lives have already been “impacted” by poverty, so from Treasury’s point of view it doesn’t matter if it forgets them or not.

    • mickysavage 4.1

      Precisely Steph. It is also like saying that climate change was not made worse by the mistake. The statement is a cheap shot diversion.

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