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Poverty of Details

Written By: - Date published: 9:42 am, December 9th, 2014 - 31 comments
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The plan to reduce beneficiaries by 25% is based on actual data, right?

Prior to the election Ms Bennett, then Minister for Social Development, now Associate Minister of Finance (note there isn’t much difference between the two portfolios in practice for kiwis unfortunate to have to rely on the safety net of welfare), announced National will reduce beneficiaries by 25%.

Ms Bennett stated that “research had shown there were “touchpoints” for people going from work back onto a benefit – at six months and again at 12-14 months.”

The article continued:

“She has set a new target of getting benefit numbers from 295,000 to 220,000 by 2017 – a 25 per cent drop. She is also looking for a 40 per cent drop in youth on benefits – getting 21,000 more young people off the benefit.”

In order to develop successful outcomes, such as those outlined above, it would help to understand the trends amongst those who are trying to seek work, obtain it then lose it and so on. Presumably the MSD would focus on collecting such data?

I made an Official Information Act request on  22 September 2014 stating the following

“Last week Ms Bennett announced plans to cut beneficiaries by 25%.

”  National is promising to reduce the number of people on benefits by 25 percent if  re-elected on Saturday.”

Social Development Minister Paula Bennett today announced a plan to get more people off the dole and into work by way of offering incentives for people who stay in work for a set period of time.”

Please advise:

how many people who were receiving a benefit between 2009 and June 2014 and who found work were subsequently released from work by an employer implementing to 90 day trial rule?

Please advise the data the ministry has for the same period showing:

Length of time unemployed remained in paid work after leaving unemployment benefit;

Reasons given for termination of that employment when it ended;

How many unemployed were terminated under the 90 day trial;

How many moved into contracted work rather than as employees

After exactly 20 working days I received a response. That means “as soon as reasonably practicable” to provide the information I requested was exactly 20 working days notwithstanding the PM and Ms Bennett made a policy announcement on it on 17 September 2014.

Some information was refused to me on the grounds it is held in file notes on individual files and would hinder their efficient running to provide it. That means the individual file note data is not collated in any useful form for use in assessing policy.

In otherwords the MSD don’t know how many people in New Zealand who were receiving benefits, are being dismissed under our 90 day trial initiative and then returning to benefits.

The Ministry told me that no one asked them to collect data on how long people stay in employment after leaving a benefit and then returned to a benefit.  But hang on, didn’t Ms Bennett say

“research had shown there were “touchpoints” for people going from work back onto a benefit – at six months and again at 12-14 months”

– it appears she didnt get it from her Ministry… or did she?

MSD don’t know why people have their employment terminated after moving from a benefit into employment and back onto a benefit.

But hang on

““research had shown there were “touchpoints” for people going from work back onto a benefit – at six months and again at 12-14 months”

If we don’t know why people are being terminated, how do we get them long term employment, and reduce numbers by 25%?

The MSD has developed policy to address this phenomenon BUT has no data to provide possible reasons why that employment terminated? Seems it will make it harder to bring about a winning solution?

So there you have it. A table and a bunch of we don’t know and don’t collect that info in a way that is easily extrapolated. 20 working days. Ms Bennett however just KNOWS how to reduce people on benefits by 25% notwithstanding the dearth of some data relevant to New Zealand and it wont be by cutting their benefits…

And remember, it’s a “pledge


I then had to make another request (my fault for not specifically including it the first time)

Please provide as a matter of urgency pursuant to the OIA  the “research” MS Bennett was relying on when she stated

““research had shown there were “touchpoints” for people going from work back onto a benefit – at six months and again at 12-14 months.””  http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11326254

As this document will be readily accessible, as she has already referred to it, I expect to receive it as soon as reasonably practicable, and not on the 20th working day.

It took them a further two weeks to realise that they needed to

transfer your request to the Minister of Social Development for response.

It turns out it was a 2013 report, publicly available.

The research was undertaken by Actuaries whose purpose was to (amongst other things)

An actuarial approach has been taken to measure the forward liability associated with the welfare system.
The liability acts as a proxy for assessing people’s risk of long-term benefit dependency and provides a tool to assist management in
working with those people

It still took 20 working days to email me the link. I have complained to the Ombudsmen Office but they are back in their quagmire, abated only briefly during the election campaign. The word “touchpoint” never appears so I am not sure why it appeared in inverted commas. It is worth wading through the report if the state of welfare and how it is assessed is of interest.

31 comments on “Poverty of Details”

  1. mickysavage 1

    Welcome tracey!

    • tracey 1.1

      Thanks Mickey. Just dipping my toes in the water.

      • karol 1.1.1

        Welcome, tracey! Excellent work on the OIAs. Great start to authoring.

        I added an image for the front page – the most relevant I could find in TS’s gallery. Often I look for a suitable image to add using google images.

  2. just saying 2

    Great work Tracey,
    Good to see you on the team of Standard writers.

    The actuarial approach sees beneficiaries as liabilities that need to be removed by any means to increase the profit of the company (ie the government).

    The money gained from starving ordinary people can then be used to increase the wealth of People Who Matter – people who have earned this exalted status by being already wealthy and by defintion, not in need of any help.

    • tracey 2.1

      Thanks JS

      The thing about Actuaries is they are a product, primarily, of the Insurance industry. That gives alot of insight to their purpose, imo. Note the name of Chapter 3?

      “Nature of the Business”

      It is also interesting that Bennett called it research given there is no methodology chapter.

      • batweka 2.1.1

        I don’t quite get the actuarial bit. Is this part of the move to privatisation? Not that treating benes as stock units isn’t bad enough.

        • tracey

          Actuaries are commonly used, in the insurance industry especially, but also ACC will have them and so, it appears, does the MSD. I don’t think it is necessarily a sign of a move to privatisation but very much an indication that this Government is driven very much by the dollar rather than necessarily looking for the best solution, then targeting the people most expensive to the system

          I presume actuaries worked in MSD under Labour Governments but don’t know.

          There is a very famous case in the States known as Ford Pinto

          ” The controversy surrounding the Ford Pinto concerned the placement of the automobile’s fuel tank. It was located behind the rear axle, instead of above it. This was initially done in an effort to create more trunk space. The problem with this design, which later became evident, was that it made the Pinto more vulnerable to a rear-end collision. This vulnerability was enhanced by other features of the car. The gas tank and the rear axle were separated by only nine inches. There were also bolts that were positioned in a manner that threatened the gas tank. Finally, the fuel filler pipe design resulted in a higher probability that it would to disconnect from the tank in the event of an accident than usual, causing gas spillage that could lead to dangerous fires. Because of these numerous design flaws, the Pinto became the center of public debate.

          These design problems were first brought to the public’s attention in an August 1977 article in Mother Jones magazine. This article condemned the Ford Motor Company and the author was later given a Pulitzer Prize.10 This article originated the public debate over the risk/benefit analysis used by the Ford Motor Company in their determination as to whether or, not the design of the Pinto fuel tank be altered to reduce the risk of fire as the result of a collision.

          The crux of the public debate about The Ford Motor Company was the decision not to make improvements to the gas tank of the Pinto after completion of the risk/benefit analysis. Internal Ford documents revealed Ford had developed the technology to make improvements to the design of the Pinto that would dramatically decrease the chance of a Pinto “igniting” after a rear-end collision.11This technology would have greatly reduced the chances of burn injuries and deaths after a collision. Ford estimated the cost to make this production adjustment to the Pinto would have been $11 per vehicle.12 Most people found it reprehensible that Ford determined that the $11 cost per automobile was too high and opted not to make the production change to the Pinto model.”


          Basically the cost of the part was $11 per vehicle. A total recall would cost $137m but they assessed the number of people likely to die from the tank exploding was “$200,000 per death, $67,000 per injury, and $700 per vehicle equating to the total “societal benefit” is $49.5 million. Since the benefit of $49.5 million was much less than the cost of $137 million, Ford felt justified in its decision not to alter the product design.”

          I am not an Actuary and perhaps their job is much less “calculating” than I imagine…

          This is all part of Ms Bennett’s “investment approach”, namely that you look at what it costs for the average cost of someone being on welfare and you take your money and apply it to measures to get the most costly people off their benefits.

          For this approach she got “promoted” to Associate Finance under Bill English (sorry for the image) to advance it across the public services. So, i don’t think it is privatisation per se, but further reduction of PS. If that results in fewer employees and more contractors then perhaps that is privatisation?


      • Anne 2.1.2

        Yes Tracey. Pleased you’re dipping your toes in the water. You have such a wide range of knowledge on so many subjects.

    • Draco T Bastard 2.2

      people who have earned this exalted status by being already wealthy and by defintion, not in need of any help.

      But still get more government help than the beneficiaries anyway.

    • I found this to be relevant in the report:

      1. Executive Summary
      Purpose of this Report
      1.3 This report:
      – Reviews and comments on the valuation of the forward liability
      – Reviews overall performance of the welfare system and the effectiveness of investments made to reduce benefit dependency
      – Identifies areas for attention to assist in managing long-term benefit dependency, and Discusses material risks that could impact on successfully managing the forward liability and/or in meeting Better Public Service (BPS) or Key Performance Indicator (KPI) targets.
      1.5 There are no actuarial professional standards which strictly apply to the valuation of unfunded social welfare liabilities. Where relevant, this report and the valuation calculations have been carried out consistent with the principles of professional standards of the New Zealand Society
      of Actuaries.
      1.6 As far as we are aware, this is the first such report prepared in respect of an unfunded
      Welfare benefit system anywhere in the world. As such, the report is in some places developmental.
      Further data capture and analytic processes are required to allow the full benefit of this discipline to be realised.

      Two things strike me here.
      The first , “welfare dependancy”, is political language and seems out of place in an actuary report. If you read through the report it is full of such language

      Investment Performance
      1.27 To achieve the goal of reducing long-term welfare dependency, the Government has implemented an Investment Approach to welfare.

      My experience with actuaries is limited to family members and actuarial blogs. But it struck me as odd given that actuaries in their professional capacity look to assess risk expressed as dollars / lives etc within specific parameters.
      As a result, they have a tendency toward exact language; “welfare dependency”, “investment approach” etc, is explicitly inexact and emotionally loaded language (designed to frame long term unemployment as a disease like addiction)

      The second, in 1.5 and 1.6 of the exec summary looks like the report authors disclaimer: “we’re doing this report because it’s on our job card, but this really isn’t our thing”.

      • tracey 2.3.1

        I agree with your assessment of 1.5 and 1.6.

        It’s like they are saying we were asked to put a square peg in a round hole. This is part of the governments ideology, namely, that everything can be boiled down to a financial calculation. That the Acturaies seem dubious of that is telling.

  3. adam 3

    Thanks Tracey

    Reading your support materials – the benefit system performance report – gets more ideological with each passing year. *sigh*

    It is truly depressing – as I’ve read sections of this report before, especially in relation to disability issues – and again, as always, bugger all is done to address disabled unemployment.

    A couple of points which really did get me peeved were;

    – the response to you question on termination – I though that would be forever in the public interest. I thought hard working taxpayers would like to know why people are being forced out of work? Or is this a case – as Pilger would say, the silence is deafening?

    – Your question on contract work – This I find staggering – contract work is were I have seen the most exploitation of working people in the current economic environment. Contract work is unstable and is the door which many a bad employer operates through. Again, staggered by the response of you OIA request.

    • tracey 3.1

      Ms Bennett says those who cannot work will be supported to “live”. I have said before that for those unable to live to be relegated to subsistence for their lifetime is an abject failure of our society. Humans need to thrive, otherwise it is a kind of euthanasia by default.

  4. George Hendry 4

    Great work, Tracey.

    Democracy at its finest – no soaring rabblerousing speeches, just someone with skill and devotion working steadily away, overcoming obstacles in the public interest.

    ‘I slow down when I drive past a real NZer making it better for the rest of us.’

  5. BassGuy 5

    I’m very surprised that they don’t have any information available about the reason for termination, as the last time I signed up with WINZ the form asked the question “Why did you leave your last job?”

    I doubt that they take the primary personal details from those forms and then ignore the rest so it seems to me that some information in this area should be available, even when the client doesn’t specifically state “Dismissed under the 90 day trial.”

    • tracey 5.1

      They stated they make “notes” on individual files and would have to go through all of them to give me the information. Staggering that they waste time collecting data to not use it. Especially data which could support the Minister’s solutions to “touchpoint” claims.

      • BassGuy 5.1.1

        It does seem odd, particularly that the information in question is used to determine the applicants’ benefit eligibility.

  6. Tom Gould 6

    In most countries like ours, there would be a functioning news media that would follow up the claim about “touch points” and need to see the research backing up the claim, particularly around an election. But not in New Zealand, where the claims of any Tory Minister makes an instant headline, and the claims of any Labour spokesperson requires convincing substantiation and verification to even get a mention.

  7. seeker 7

    Brilliant idea, brilliant work, brilliant post – just all round inspiring brilliance Tracey. Thankyou.
    Hope Simon Collins picks this up and Carmel Sepolini.

  8. Brian 8

    Unemployment is a consequence of taxation.Under National it is a deliberate policy to kept wages down and to use the unemployed as a weapon to combat inflation and as a political weapon against the unemployed.This policy is far more expensive than the pittance that might be saved initially but cost society more in long term damage through broken families, abuses of various kinds, child poverty,etc.unemployment could be easily solved through a govt. guaranteed job for all willing and able to work at a living wage.Unemployment happens when the govt. fails to spend enough money into the economy to cover the tax liabilities it imposes ,and any saving desires of the non govt. sector. Said another way, unemployment is the evidence of over taxation.Key and this govt. have been aggressively promoting policy that creates and sustains unemployment,and all the pathologies that accompany unemployment.

    • Draco T Bastard 8.1

      You seem to be confused.

      Unemployment happens when the govt. fails to spend enough money into the economy to cover the tax liabilities it imposes ,and any saving desires of the non govt. sector. Said another way, unemployment is the evidence of over taxation.

      The first sentence is actually correct and then you contradict it with the second sentence.

      Said another way, unemployment is the evidence of over taxation.

      No it’s not. It’s a result of policies designed to ensure 6%+ unemployment such as the 90 day Fire at Will Bill and low taxes on the rich which you actually said:

      Key and this govt. have been aggressively promoting policy that creates and sustains unemployment,and all the pathologies that accompany unemployment.

      BTW, Periods of high taxation and the greater equality it brings about usually correlate with high employment. Basically, in such circumstances, we don’t have a few people who are far too rich siphoning all the money out of the economy.

      • Brian 8.1.1

        What I said about unemployment and taxation is correct.It depends on ones politics.I agree that the rich should be paying higher taxes.The tax was changed by the lange govt. to advantage the rich. I would do away with the gst for starters. A land tax would also be a good start in tackling the concentration of property ownership. A comprehensive capital gains tax would also be desirable. When the govt.deficit spends it does not need to issue debt,which is a hang over from the Bretton Woods system which collapsed in 1971.The quickest way to solve the unemployment problem would be to offer a job to anyone willing and able to work at a living wage with other benefits such as child care etc.The govt.could also provide free education for all for live.Also we need to transition from the predatory capitalism of today to where workers control enterprises in a more democratic manner.Another thing about taxes.The govt. has to spend first before it taxes !

        • Draco T Bastard

          What I said about unemployment and taxation is correct.It depends on ones politics.

          No it wasn’t and no it doesn’t.

          When the govt.deficit spends it does not need to issue debt,which is a hang over from the Bretton Woods system which collapsed in 1971.

          This is correct. In fact, from this premise we can determine that the government is the source of all money and that the purpose of taxes is to destroy that created money so that there isn’t too much money in circulation driving up inflation (Not that I think that is a major driver of inflation).

          We then need to determine what the government needs to be spending that money upon. I tend to think in terms of natural monopolies, ubiquitous services and general welfare (Health, education, etc).

          This money spent into the economy essentially supports everyone at a reasonable living standard. The private sector then does minor stuff that is, essentially, luxuries but is limited to what the people are willing to spend from their government income.

          From there we then need to determine the best mix of taxes to maintain an adequate supply of money in the economy that:

          1. prevents recession
          2. keeps inflation down and
          3. supports adequate R&D to develop the economy

          Two other aspects that I also think need to be looked at are:

          1. A minimum and maximum income
          2. The elimination of interest

  9. And yet in GB

    “An income squeeze, benefit delays and excessive utility bills are blamed by a cross-party group of MPs for a huge rise in the use of food banks.
    The inquiry, by Conservative and Labour MPs and Church leaders, says many families are one unexpected bill away from financial crisis.
    They urge quicker benefit payments, the extension of free school meals and a living wage to reduce hunger.”


  10. The Chairman 10

    Good work, Tracey. Hope the Party put it to use.

  11. left for deadshark 11

    Just had a look now Tracey,good start. 😉

  12. tracey 12

    Have just finished reading a brief but interesting article about poverty which includes a workshop with members of the Judiciary.

    “Growth in poverty throughout the Organisation for Economic Co-operation and
    Development [OECD] hurts people. The Auckland City Mission Family100 project
    explores the everyday lives, frustrations and dilemmas faced by 100 families living in
    poverty in Auckland. This article reflects on poverty in New Zealand, associated welfare
    ‘reforms’, the consequences of recent change in exacerbating hardship, and our own
    efforts to advocate for the rights of beneficiaries. Specific attention is given to a
    workshop run by the research team with the judiciary, and what such activities
    foreground in terms of the relational nature of research, reciprocity and advocacy. ”

    The Australian Community Psychologist Volume 25 No 1 June 2013



    ““It’s important for the kids to be fed no matter what. My bottom line is if I can’t get help then I take the situation into my own hands . The stuff that I steal shows t
    hat I’m doing it. I’m not in there stealing fancy cheeses and wine and stuff like that. I’ve been into a fruit shop and stolen a bag of mandarins so that my kids will have some fruit in their lunch boxes… Stealing doesn’t come easy to me. You have to work up the courage. I deal with the guilt of it. I do know what’s right and
    wrong, but when push comes to shove, my kids come first. I steal because I have to. It doesn’t give me a rush or make me feel good, like a lot of thieves . It worries me if I go inside. That’s not going to be good for my kids, either. But when I weigh things up, I don’t have anyone to ask for help. I have to steal probably at least once a fortnight, but it could be three times a week at some points.” ”

    “Family 100…
    When we discussed the issue with families
    they almost universally responded that they appreciated receiving the food parcels, but were not participating for the parcels. They were very willing to participate without the food parcels in order to ‘have their say’. ”

    People WANT to be heard.

    An Actuarial based solution is unlikely to work cross departments, welfare, health, justice… Poverty isn’t bad budgeting it is not having the money to provide very basic things. To those who say throwing money at people isn’t the answer i say, it is one of the answers, in a cross department initiative genuinely desiring to tackle real problems.

    While some politicians are still debating whether poverty even exists in NZ we are a very long way from a solution.

    Meanwhile the latest OECD report has this to report

    “Inequality has a detrimental effect on economic growth, a new OECD report has found.

    The changes in inequality in the two decades following 1995 resulted in both New Zealand and Mexico losing an estimated ten percentage points in growth between 1990 and 2010, according to the thinktank. “

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