One member of every couple works just to pay the tax bill.

There was a time not that long ago when only one member of a family needed to go out to work. 

But that was several moons and many tax increases ago.

Now, one member of every couple goes out to work just to pay the tax bill.

Yet we still have the Sole Parent Support (SPS) benefit, known for decades as the DPB, aka the Domestic Purposes Benefit -- introduced in November 1973 for "sole parents, carers of the sick, and people living alone." 

In 1971, there were about 19,000 sole parent households with children under 15[1]. By the middle of 1974, 12,000 of them were receiving the DPB. There were 110,000 when it was replaced in 2013 with a suite of new benefits. (Politicians love to change a name instead of the reality; and a name-change always makes a thing easier to hide.) 

In today's world the DPB is, says Lindsay Mitchell, "an anachronism. It has lost context in modern society."

Why?

Because most mothers work. 

They take paid parental leave, which has a maximum entitlement of 6 months, and return to their jobs. Whether they want to would vary, but most would say they have to. Mortgages or rent need to be paid, power, groceries, childcare, etc....

22 percent of the mothers were supported by a benefit. For the vast majority, that would be Sole Parent Support. ... So the mothers returning to work - like it or not - will be paying taxes to enable other mothers to stay reliant for most of their newborn's childhood.

Fair?

...

Currently 234,000 children rely on welfare, with over two thirds on SPS.

If those children had a parent on a Jobseeker benefit, the expectation and effort to get their parent into employment would be far greater.

That's not just hot air. The reason Bennett got rid of the Sickness Benefit (in favour of Jobseeker/Health or Disability Condition) was to make sure 'expectation and effort' also went into getting temporarily unemployed unwell people back to work.

Societal expectations matter. And benefits should reflect them.

Get rid of the sole parent benefit. Lift aspirations for those mothers, and better outcomes for their children will follow.

Even better: get rid of all the costs from government that make it necessary for one partner to seek full-time employment just to pay the government's bills!

"It’s training to be an entrepreneur, and an employer—not an employee."

Q: Governments and central banks have inflated asset prices for decades—making housing, education, and healthcare unaffordable for many.

Is the 'system' designed to turn Millennials and Gen Z into lifelong renters and debt-serfs? Is there a way out?

Doug Casey: It’s a natural consequence of Statism.

First of all, taxes are high and have been increasing for decades. After taxes, you have less money left over to save. And if you do try to save, inflation eats away at the dollars that you put in banks or investments. Worse than that, welfare and government benefits make saving feel unnecessary for many people. They feel they don’t need as much because the cradle-to-grave welfare state will cover them. There’s a reason why Klaus Schwab famously said, 'You’ll own nothing and be happy.'

A lot of people believe it. This feeling is abetted by schooling, where everyone is inculcated with this collectivist meme. On top of that, the rich are viewed as parasites. And who wants to be a parasite?

This is all caused by State intervention in the economy. Schools almost always teach students that the State is their friend. It’s not; it’s their enemy. ....

Q: We’re seeing a collision between AI/automation and a credential-heavy job market. Which parts of today’s white-collar economy do you think are most fragile?

Doug Casey: .... The bright side is that while AI and robotics will destroy huge numbers of jobs—starting now—they’ll also level the playing field. A person of less than average intelligence can have AI do things for him that he might otherwise be unable to do. A further benefit is that the world doesn’t need paper pushers and cubicle dwellers who are sitting around doing marginally productive labor. Very much like the world no longer needed people working like drones in textile mills 200 years ago, at the start of the Industrial Revolution.

While AI is going to create some major problems in the short run, it’s going to be a very good thing after those bumps in the road. Just like the Industrial Revolution itself created problems while vastly improving the world. ....

Q: What should a 25-year-old do to build real, durable earning power in the next 5–10 years?

Doug Casey: Ayn Rand answered that question in a speech I heard 40 years ago. When asked, she said: 'The best way to help the poor is not to be one of them.'

I confronted this problem with my friend Matt Smith when we wrote 'The Preparation.' The book explains why young people should avoid college. In fact, it urges them to treat college like the poison that it now is, showing how college has become a serious detriment in almost every way. More importantly, we describe what young men should do instead during the four years between 18 and 22, a time which is critically important, but generally wasted.

We demonstrate—exactly—how a young man can qualify himself with the equivalent of a BA, a BS, and elements of an MBA. That’s in addition to learning practical things in a hands-on way. We divide the four years into 16 quarters. The student will learn everything from flying a plane to sailing a boat around Cape Horn to operating heavy equipment. He’ll qualify in welding and metalwork in Canada. Cooking at a professional level in Italy. He’ll be farming in one quarter and building a house in the next. He’ll learn martial arts skills in Thailand, as well as shooting and scuba. You get the idea. It’s a productive and busy four years.

The critical thing, since we don’t know how the world is going to evolve because of AI, is to become a Renaissance man, enabling students to do anything and go anywhere. To avoid trying to climb a greasy corporate ladder, but build a web where you can reach out in any direction. That’s necessary in the world of AI. It’s training to be an entrepreneur, and an employer—not an employee."

~ from an interview with investor 'Doug Casey on Why Millennials and Gen Z are Trapped by Debt, Inflation, and Broken Promises

"Those saying we need more welfare in order to produce more children are pushing a remedy fraught with risk, cost and irresponsibility."

"Their study was based on a population of children aged 0-14 years 'informed by a cohort analysis of individuals ... who can be observed through to age 21 .'... One of four risk factors for poor outcomes later in life [is b]eing 'mostly supported by welfare benefits since birth'...

"[In other words,] children raised on welfare [tend to] become adults who are less educated, have poorer mental health, are more likely to become single parents, to rely on welfare and fall foul of the law.

"If being born onto welfare and staying there long-term is a risky business for children, why would any government want to encourage this? In other walks of life we are bombarded with health and safety regulation. And in an environment where 'sustainability' is a constant clamour, how does growing costly dependency stack up?

"Those who advocate limitless number and duration of child benefit payments — the situation that currently exists in New Zealand and the UK is returning to — are ignoring the evidence.

"Those saying we need more welfare in order to produce more children are pushing a remedy fraught with risk, cost and irresponsibility."

~ Lindsay Mitchell from her post 'Boosting birth rates with benefit payments is a very bad idea'

"More than two decades on, the speech reads less like a product of its time and more like a warning that New Zealand chose to ignore."

 

"Today [now yesterday] is the last Tuesday of January. It is a date that should matter more in New Zealand’s political memory than it does.

"On the last Tuesday of January in 2004, Dr. Don Brash stood at the Orewa Rotary Club and delivered what remains one of the most important political speeches given in this country in modern times. It was calm, forensic, unapologetic and, most importantly, correct.

"More than two decades on, the speech reads less like a product of its time and more like a warning that New Zealand chose to ignore.

"Brash opened by setting out five priorities that would be familiar to anyone paying attention today. Declining relative incomes compared with Australia. An education system failing the least privileged. Welfare dependency eroding personal responsibility. A justice system more concerned with offenders than victims. And finally, the issue he focused on that night, the dangerous drift toward racial separatism and the entrenchment of what he rightly called the treaty grievance industry.

"That phrase alone was enough to end his political career.* Not because it was wrong, but because it was accurate."

~ Matua Kahurangi from his post 'The last Tuesday of January and the speech New Zealand still refuses to confront'

* To be fair,  his political career didn't end immediately; but it had been put on notice. Even a near-reversal in National's worst-ever election loss under Bill English wasn't enough to save it.

The Seen & the Unseen — Dicey edition

 

"The beneficial effect of State intervention, especially in the form of legislation, is direct, immediate, and, so to speak, visible, whilst its evil effects are gradual and indirect, and lie out of sight. ... Hence the majority of mankind must almost of necessity look with undue favour upon governmental intervention. 

"This natural bias can be counteracted only by the existence, in a given society, ... of a presumption or prejudice in favour of individual liberty, that is, of laissez-faire. The mere decline, therefore, of faith in self-help — and that such a decline has taken place is certain —is of itself sufficient to account for the growth of legislation tending towards socialism."

~ AV Dicey from his lecture 'The Growth of Collectivism,' collected in his 1905 book 'Lectures on the Relation between Law and Public Opinion in England during the Nineteenth Century'

"The state cannot solve 'poverty.' "

 

"After nearly ninety years of social security it would be reasonable to conclude that the state cannot solve 'poverty.' Indeed, the more the state does, the more the state is expected to do."

~ Lindsay Mitchell from her post 'The other side of the story' 

Democracy wangled: why public programmes are designed to benefit the middle classes, financed by taxes paid by the rich & poor

A simple principles explains how democracy really works to benefit one group at the expense of several others — and why a Capital Gains Tax would be harder that it looks. The principle is something called Director's Law.

 "Director's Law states that the bulk of public programmes are designed primarily to benefit the middle classes, but are financed by taxes paid primarily by the upper and lower classes. The empirically derived law was first proposed by economist Aaron Director.”

Director’s Law is so-called after the delightfully named Chicago economist Aaron Director. Director’s Law states that 

“Government has coercive power, which allows it to engage in acts (above all, the taking of resources) which could not be performed by voluntary agreement of the members of a society. Any portion of the society which can secure control of the state's machinery will employ the machinery to improve its own position. Under a set of conditions to be discussed below, this dominant group will be the middle income classes.”

Milton Friedman calls it the Robin Hood Myth: “the myth that government has benefited the poor at the expense of the rich.” They key essentially is to fuck the poor and the fairly rich (we’ve never enjoyed a “very rich” here) in order to benefit the middle class. 

As Michael Cullen was to confirm for us when he designed the middle-class subsidy scheme Welfare for Working Families, this is still the logic of local democracy.

“On The Logical level you have a political system under which laws are passed by 51% of the people voting One Way against 49% of the people. Now the way to get a law passed therefore is to form a coalition covering 51% of the people. 

    “You might think that you would take the bottom 51% versus the top 49% but the more you think about it the more you realise that's not a very effective way to form a coalition. Why? Because those people who are at the bottom tend to be much less skilful in political activity for the very reasons that leave them at the bottom in the economic scale. …

   “The most effective people in political activity those of us in the middle classes. Where are the people who are literate; where are the people who write for the newspapers; where are the people who mount the hustings; where are the people who provide the candidates.    

    “Well you might say why doesn't the Coalition come from the top 51% all the way down. The answer is that those people at the top [are]a place we can get a lot of money from! And it's worth sacrificing a few votes to get a large fraction of a tax base. 

    “And therefore the logically most reasonable Coalition is sort of 51% of the people running from the lower-middle class through the upper-middle class, and leaving out both the very rich at the top and the very poor at the bottom.”

So why does that make implementing a Capital Gains Tax harder that it looks? It's very simple. Because as every astute politician knows, those people on whom it would fall are right inside your 51% of voters...

"Te Pāti Māori’s leaders are too busy preaching about Gaza to notice the blood on their own doorstep."

"While Māori children are being beaten, abused and killed right here in New Zealand, Te Pāti Māori’s leaders are too busy preaching about Gaza to notice the blood on their own doorstep. ...
    "It’s easy for [them] to shout about oppression halfway around the world, but where is [their] voice when Māori kids are dying up in Northland while under the care of Ngati Hine? Where is her anger when Māori families are trapped in gang-run communities plagued by drugs, violence and generational trauma? ...
    "Rawiri Waititi and Debbie Ngarewa-Packer are demanding the New Zealand Government expel the Israeli ambassador unless Israel halts its military campaign and opens up Gaza to humanitarian aid. That’s their priority. Not the Māori kids being buried, not the Māori women being beaten, not the Māori offenders clogging up the justice system with violent crimes. Their outrage is selective and political, not moral."

~ Matua Kahurangi from his post 'Te Pāti Māori more concerned with Gaza than Māori children being murdered at home'

"This is what Ardern's famous form of kindness and compassion actually looks like."

"[C]hildren who get murdered ... were definitely short of ... love and care. That is what lies at the heart of New Zealand's high rate of child abuse and neglect. Not material poverty. Not a lack of money.

"It's a fact ex-Prime Minister Jacinda Ardern either wilfully or naively chose to ignore. Her solution to the plight of too many suffering children was [instead] greater wealth redistribution. Inventing new payments for families with babies, lifting benefit rates and installing families in motels were three major policies designed to alleviate poverty. But the mayhem goes on. ... 'Violence against children is increasing. The number of children admitted to hospital with injuries because of assault, abuse or neglect increased sharply in 2024 to the highest number in at least a decade. Violent offending against children also continued to increase ....'"

"Throwing money at people who become parents willy-nilly, who lack any financial or emotional wherewithal, who can't look after themselves let alone a demanding, time-intensive baby, is nothing more than a salve to the conscience of people who have misdiagnosed the problem. Led by the likes of Jacinda Ardern.

"This is what Ardern's famous form of kindness and compassion actually looks like. ...

"So while we endure the massive media-hype around Ardern's biography, and most detractors focus on her horribly hypocritical claim to a compassion-driven Covid response, remember, her main reason for entering politics was to help children.

"Not only did she fail, but she may have made matters worse."

~ Lindsay Mitchell from her post 'Ardern: If she insists on being remembered, I will oblige'

Low cunning

"The struggle of well-fed pressure groups for larger shares in the national booty is not a battle which engages the highest faculties of the human heart or mind. It is the consequence of our material health as well as of our spiritual sickness that from the exaggerated structure of the state there emerges something less than the human voice."

~ Hubert Witheford, from his prose article 'Background to a Magazine,' Arachne No. 2, Feb. 1951 (p. 20)

A coward's budget [updated]

The New Zealand Government's gross debt — the amount taxpayers must service — will now increase by another $73b by 2029, reaching a massive $283b.  That's $94,000 for every New Zealand family (with nearly $6000 of that just to pay the government's interest!).

Things are desperate. It's the middle year of an election cycle. Time for something bold.

No?

No.

Its not about doing more with less, or vainly trying to to. It's about doing less with less. Less with our money.

Ms Willis has failed us on both counts.

Let me give you two examples. (Three Four if you count my polite suggestion yesterday to gradually raise superannuation age, and include Lindsay Mitchell's today to time-limit welfare assistance.")

Several years ago when Helen Clark's Labour Party was about to lose an election , then Finance Minister Michael Cullen placed a fair proportion of New Zealanders onto welfare. His Welfare for Working Families programme made sure that, until ended, more than half of the country will now be beneficiaries. On the mooch. More than half of the country pulling down more from other taxpayers than they can ever give back.

This National Party Finance Minister could have done nothing with the programme — allowing inflation to make the maximum threshold for the programme dissolve.

She could have ended it altogether — signalled in good time, of course, to let folk plan ahead — but ending it could have saved $2.5-3billion. 

Instead, she raised that threshold below which working families get welfare. Around 142,000 New Zealand families. Which means even more working New Zealanders will continue to be moochers off (further normalising the behaviour perpetuating the Welfare State).

Many years ago a National Party Finance Minister introduced an Accommodation Supplement to, supposedly, help out poorer renters. Of course, it did nothing of the sort: instead if helped out their landlords, who could simply raise their rents to meet this new "supplemental" monetary demand for their supply. The Supplement — a grant to landlords — currently costs around $5 billion.

This National Party Finance Minister could have announced a lowering of the Supplement, saving some of those billions.

She could have announced it would end altogether, saving them all (while lowering rents). Instead, another expensive, destructive market-distorting subsidy continues.

I highlight these two measures because, for all Nicola Willis's hand-wringing about being prudent, about being responsible, about needing to achieve a surplus — and with the economic system flatlining while government debt vaults up decade by decade, bold measures to get there are not just a nice-to-have but a have-to-have — this budget is neither prudent, nor careful nor responsible.

Not being bold is to be irresponsible.

It's to be a coward.

Opposition parties are trying to paint this as an austerity budget. National Party pollster David Farrar boasts that it isn't.

It bloody should have been.

More here from others:

The Taxpayers’ Union is slamming Budget 2025 as a waste of time and hype, asking ‘is that it?’

"Nicola Willis has failed,” says Taxpayers’ Union Spokesman Jordan Williams. “This Budget could easily have been delivered by Grant Robertson."

“Willis promised to tackle the last Government’s ‘addiction to spending’. Spending is going up as a proportion of the economy in this year’s Budget compared to the current year. Core Crown Expenses are forecast to be 32.9 percent in 2025/26 compared to 31.8 percent under Robertson in 2022/23.

“She promised to balance the books. The OBEGAL never gets into surplus according to Treasury forecasts. Willis has had to make up a new measure to exclude the ACC deficit to create an illusion of a laughably small surplus in 2029.”

“And she promised growth. But the headline measure – an accelerated depreciation regime – is basically no better than what the last Labour Government tried immediately after COVID.”

“According to the Budget documents, the Government's headline ‘growth’ policy adds just 1 percent to GDP over 20 years. It is laughable in its small size.”

“More spending, more debt, and nothing to materially shift the dial and grow the economy. It’s not a Growth Budget, it’s a fudge-it."

Further:

"Spending as a share of GDP is materially higher than in the last fiscal year Grant Robertson was responsible for."  

Liberty Scott:

It's very much a centrist budget to not please those wanted a balanced budget and shrinking of the state, and of course isn't a budget of new grand larceny and profligate handing out to preferred causes, it basically just holds the line of NZ's Jacinda-era bloated state. ... a[nother] kick-the-can-down-the road budget.

Eric Crampton mentions some political sleight-of-hand:

"At some point, we have to wonder about the fiscal responsibility provisions in the Public Finance Act matter, because those effectively say you should not be running structural deficits for a decade, and we will have been running structural deficits for a decade. The ones during Covid were excusable - now, not so much. ....

"If you want to see the state of the government's books on the more traditional OBEGAL measure, rather than the one that excludes substantial ongoing ACC deficits, you have to go to the "Additional materials" in the online appendix. 

"Here 'tis. No return to surplus."

Michael Reddell:

"The Growth Budget" has just one growth-oriented policy [i.e., accelerated depreciation for business investment], estimated by Treasury to raise GDP by a mere 1% over 20 years (0.5% in total in the next five). 

"We were, of course, promised 'bold steps.' 

"Simply unserious."

UPDATE: More from Michael:

"[T]he government chose to title its effort [yesterday] 'The Growth Budget.' The Minister spoke today against a backdrop emblazoned repeatedly with that label.... the Prime Minister made a big thing of the need to accelerate growth ... The Minister of Finance in announcing the Budget date ... [boasted] 'the Budget will contain bold steps to support economic growth' ...

"They did not deliver.

"There was a single growth-oriented initiative in the Budget ... [T]he best Treasury estimate is that it will lift GDP by 1 per cent, but take 20 years to do so

"This year’s Budget represents another lost opportunity, and probably the last one before next year’s election when there might have been a chance for some serious fiscal consolidation. The government should have been focused on securing progress back towards a balanced budget. Instead, the focus seems to have been on doing just as much spending as they could get away with without markedly further worsening our decade of government deficits. ...

"We used to have some of the best fiscal numbers anywhere in the advanced world, but as things have been going – under both governments – in the last few years we are on the sort of path that will, before long, turn us into a fairly highly indebted advanced economy, one unusually vulnerable to things like expensive natural disasters. ...

"The government seems to have become quite adept at rearranging the deckchairs (cutting spending that they consider low priority and increasing other spending) but they are choosing to make no progress at all in reducing the structural deficit. ...

"Which brings us to the most recent IMF Fiscal Monitor released a few weeks ago [showing how our] primary deficit now compares ... Depending on your measure we were (based on HYEFU/BPS numbers) worst or close to worst in the advanced world. Today’s Budget will have done nothing to improve that ranking."

"We don’t have the largest overall structural deficit among advanced countries, but there aren’t many worse than us." [Updated]

"New Zealand’s fiscal position doesn’t look good. Last year’s Budget slightly widened an already uncomfortably large (estimated) structural fiscal deficit. ...

"[T]his is a measure of the primary deficit (ie excluding net interest) not the overall balance. ... [T]he overall deficit ... it is a reflection of past choices. The primary balance is a reflection of current policy choices. ...
[T]he chart ... shows New Zealand [is] estimated to have the highest cyclically-adjusted primary deficit of any advanced economy this year. ... We used to be better than the average advanced economy. Once upon a time, not so long ago. But not now. ...

"There can be a case for cyclically-adjusted (or structural) primary deficits, even large ones. Wars, for example, are often financed by a mix of debt and taxes. Pandemics can be another example – big disruptions to output and activity almost from out of the blue – and so no one really quibbles much over primary deficits in (calendar) 2020 and 2021.

"But we don’t face a war or a pandemic. Our politicians – first Labour and now the National-led coalition – have simply chosen to run large primary deficits. ... 

"In case you are wondering about the overall structural balance picture, here is that chart:

"We don’t have the largest overall structural deficit among advanced countries, but there aren’t many worse than us.

"And we are heading in the wrong direction. ...

"These New Zealand structural fiscal deficits aren’t some consequence of Covid but a series of choices to act, and not to act, by both governments in succession. ...

"[B]ack ... when we had feeble productivity growth and weren’t closing the gaps on the rest of the advanced world we had an enviable record of fiscal stewardship. These days, productivity and real GDP per capita growth is [still] lousy, and we are running big deficits and rapidly increasing debt.

"It is a choice, but it is a bad one."

~ Michael Reddell from his post 'Fiscal failure'

UPDATE:

Looking for signs of a form improvement, Reddell notes that in Finance Minister Nicola Willis's pre-Budget Speech this morning "although there is talk of a 'significant savings drive' freeing up 'billions of dollars' ... there have been no announcements of things the government is going to stop spending money on, or of agencies/departments it is just going to close down." And: "it sounds as if more handouts are still part of the plan."

We should no doubt be thankful for small mercies – this morning’s announcement may be one – but the outstanding imbalances are large and do not yet seem to being addressed seriously. Those imbalances are bad, both absolutely and in international comparison terms. They are political choices. Unfortunate ones.

"... a broader, decade-long 'crank realignment' in American politics."

"Robert F. Kennedy Jr.’s transition from semi-prominent Democrat to third party spoiler to Donald Trump endorser is emblematic of a broader, decade-long 'crank realignment' in American politics.…
    "The partisan shifts of both Trump and RFK Jr. are part of a long term cycle in which .... a generic suspicion of institutions and the people who run them has come to be associated with conservative politics. Conservative cranks are not even close to new (the John Birch Society, for example), but they’ve become increasingly prominent ...

    "If I’m agitating for a 'liberal' realignment of American politics, it’s partly because I live in terror that the realignment will come anyway—but it will be illiberal….
    "Let’s talk about what kind of implicit idea would cause someone to combine a traditionally conservative proposal (keeping out immigrants) with a traditionally leftist proposal (government price controls)—and do so in a way that so overwhelms every other consideration, including democracy itself, that it causes them to flip their vote.
    "The implicit premise is that government exists to hand out favours to 'people like me'—and to kick everybody else in the teeth, especially poor immigrants coming here in search of a better life. That particular policy combination indicates a tribal mindset….
    "At any rate, this is precisely the political realignment I’m trying to avoid, one that brings together the worst of both worlds: bloated Big Government welfare-statism and paranoid, xenophobic nationalism."

~ Matt Yglesias from his post 'The crank realignment is bad for everyone.'  Hat tip Robert Tracinski who comments, "There’s still a good chance that this is exactly what we’re going to get."

 

Te Pāti Māori's electioneering shenanigans at Manurewa Marae are small beer

 

Te Pāti Māori's electioneering shenanigans at Manurewa Marae are small beer compared to their pāti president's  financial shenanigans at the Waipareira Trust, which looks increasingly like he regards it as his personal and pāti ATM.

That's where the real enquiry needs to be focussed — on the slush fund known as Whanau Ora. And the deals done by several parties to create it. 

It was predictable. When there's this much money and power sloshing around unaccountably, there's always someone who will make it his job to take advantage ...

WHAT WE SAID IN 2010:

"If stimulus and bailouts are welfare for bankers-who’ve-failed, and Kiwisaver is welfare for suits-with-nothing-in-them, then surely the new politically-correct Whānau Ora scheme is just welfare for 'welfare providers,' isn’t it? Welfare that is primarily to keep the likes of John Tamihere and Rongo Wetere in the manner to which they’ve become accustomed. Welfare for a Browntable of well-heeled ambulance chasers. Welfare that will end up costing us all more in the long run than the current welfare bill."

'Welfare for Everyone' - NOT PC, April, 2010

WHAT WE SAID IN 2015:

"Whanau Ora is ... simply welfare for separatist welfare providers.
    "In short, a scam.
    "That much is fairly clear even from the Auditor General’s findings on funding, to whit: 'During the first four years, total spending on Whānau Ora was $137.6 million…. Nearly a third of the total spending was on administration…' 
    "You see? A very well-paying scam …  if you’re inside that tent clipping the ticket.
    "What Whanau Ora is primarily, is welfare for separatist welfare providers....
    "So what has the scam achieved?
    "It has achieved a great deal indeed … for all those inside the tent.
    "What it achieved for the Maori Party was to buy them the backing of welfare providers – and as you can see I mean 'buy' in the very literal sense. Sure, it’s been hard to keep the backers inside the tent as bigger game seemed to appear elsewhere, but for a while at least it bought support for the new party.
    "And what it achieved for the Key Government was to buy the backing of the Maori Party – 'buy' here being used in the very political sense of buying the Maori Party’s votes, with which it was able to stay in power.  
    "So quite a great deal indeed was achieved, if you’re one of the ones in power." 

'The Whānau Ora Scam' - NOT PC, May 2015

 

"What stupendously depressing words, declaring the only way a human can be fulfilled is dependence on politicians."

"Although Ardern tried hard to divide Kiwis along every imaginable line for her own political benefit, an inescapable fact is that a profound cultural factor, way bigger than her, unites us all together. We have our roots in making our way through our own industry. 

    "When people started to migrate to NZ, whether indigenous or not, they had to depend on themselves, friends and family for survival. There was no welfare state back then. Out of this history, an important part of our culture became the 'can-do' attitude — Kiwi ingenuity, the number 8 fencing-wire, practicality —the taking calculated risks that many in the Old World had lost. Cut to modern times however, and this is the current philosophy of the NZ Labour Party, as espoused by its current and former leaders:

Ardern: 'People ... look for light, hope, a fulfilment of their own ambition and they will either find that in political leadership or they will seek out reasons why they have been failed.'

Hipkins: 'Governing is about choices — choosing subsidies ... '

"What stupendously depressing words, declaring the only way a human can be fulfilled - can achieve their dreams & ambitions - is dependence on politicians..."

~ Robert MacCulloch, from his post 'A brighter Future for NZ'ers involves the outright rejection of Labour's Make-the-People-Dependent Doctrine' 

More than half of all New Zealanders are on the mooch.

 

We're getting there ...
[cartoon by Nick Kim]

Great news everyone! We're not just over-lawyered here, turns out we're also now over-endowed with moochers.

I just knew you'd be overjoyed to hear that.

A new Treasury "working paper" just released shows that we're getting ever closer to the situation satirised above.

In 2016 more than 40 per cent of the population here were revealed to be on the mooch — 40 per cent of households paying less tax than they receive in cash benefits, 3 per cent paying around a quarter all the income tax that supported them.

And now, in 2024, that Treasury "working paper" tells us that we've now officially passed an important milestone, which is this: More than half of all New Zealanders are on the mooch. 

More than half. Mooching off the other half.

More than half of this country's population is now receiving more in government largesse than they pay in taxes, while an ever-diminishing percentage of the population if forced to pay for them.

What a welfare state to be in!

Nett tax take/contributions of all NZers, measured across deciles.

(Chart from Treasury working paper 'Fiscal incidence in NZ: The effects of taxes and 

benefits on household incomes in tax year 2018/19 (AN 24/01)'. [Hat tip Eric Crampton])

Specifically, Treasury's figures (summarised in "deciles" above) show that households bringing in the higher forty per cent of household income are nett taxpayers (those on the right, above), while those bringing in lower amounts (on the left, above) are, as a group, nett tax-takers.

This is actually what inequality looks like — the productive being forced to fund the unproductive, unequally.

Measured this way however, it does obviously undeservedly impugn some honest folk on lower incomes, and many moochers and parasites on higher incomes because they're sucking down government cash.

And at the same time it also fails to measure the various bureaucrats, bloodsuckers and parasites who work directly for government, or indirectly as a consultant or the like to help business-folk avoid being done over by government.

Yet it does show us that we're ever closer to the day arriving that the poor bastard in the cartoon above becomes reality.

NB: David Farrar and MT_Tinman also comment, as do several folk on Eric's original tweet ...

"The only way forward is to go back to the concept of 'deserving' and 'undeserving' "

"It has been clear for decades that NZ's approach to welfare has gone awry. The late Roger Kerr, of the NZ Business Roundtable, once said to me, 'The only way forward is to go back to the concept of 'deserving' and 'undeserving'.' ...
    "Between the passage of the Social Security Act in 1938 and the early 1970s the percentage of working-age people on a benefit never exceeded two. Today it stands at almost twelve, with the time people stay dependent growing every year.
    "As a society we have created this level of reliance by believing and acting on a bad idea. That we must not judge others. We must not mention their faults and shortcomings. We must bend over backwards to not blame the person responsible for their own troubles. That's the kindness and compassion we are taught to aspire to. ...
    "I would vouch that the majority of New Zealanders want to help people who, through no fault of their own, need a benefit and public housing. But that willingness does not extend to people who chronically cause their own misfortune."

~ Lindsay Mitchell, from her post 'Is real change on the cards?'

 

RE-POST: Yes, Jenna, it is bribery

Broadcaster Jenna Lynch is aghast that anyone could consider being paid to broadcast government lines could in any way be considered "bribery." Oh, her outrage on behalf of the Team of 55 Million.

She appears innocently unaware there is more than one way to curtail free speech. Government organisations who censor speech or expression are one way. Government organisations who pay to promote it, like NZ on Air or the Public Interest Journalism Fund, are another.

To make this point, I’m going to repost a piece from 2006 [with just a few ever-so-slight additions]…

This is a post about free speech.

It is not a piece about outrageous assaults on free speech committed in Paris last month, or by government censorship offices, or by successive NZ governments keen to curtail criticism during election periods.

No, this is a post about a different kind of attack on free speech. One more subtle, and no less chilling. One in which [newspapers, journalists, broadcasters], artists, musicians, scriptwriters, screenwriters, television producers and television production companies are kept afloat by government cash and government grants from [a Public Interest journalism Fund] or Creative New Zealand or Te Mangai Paho or New Zealand on Air or their proxies, or in which many scientists are kept afloat by government grants or by employment in government research projects.

The direct result of this is what Ayn Rand once called ‘The Establishing of an Establishment’*: not just the sponsorship of creative souls [and journalists] to toe a government line, which is bad enough, but an even more insidious kind of greyness inciting would-be creatives to to a cultural line embodied by those doling out and reviewing these government grants.

What's the problem, you might ask? 

 
Well, think about this. There is more than one kind of censorship. In fact, I'd suggest to you that there are two. The first and most straightforward method of censorship is for a government to ban speech that they don't like -- that's just what National and Labour and the Greens and Gareth Morgan want to do at elections. The second form of censorship is one that Ayn Rand called "the establishing of an establishment," and it is even more insidious and no less chilling:

Governmental repression is [not] the only way a government can destroy the intellectual life of a country... There is another way: governmental encouragement.

Rather than simply banning opponents or banning expression, this form of censorship is much more subtle: it encourages expression (or scientific research) that is deemed acceptable, and by implication discourages anyone interested in career advancement from engaging in possibly unacceptable expression or research, .

Governmental encouragement does not order men to believe that the false is true: it merely makes them indifferent to the issue of truth or falsehood.

It makes them sensitive instead to what is deemed acceptable, and thereby lucrative -- it encourages and makes lucrative that very form of sensitivity – and it invites all those lucred up by the process to band together against whoever they perceive as their ‘other’ [especially so if they can be deemed "racist" or a "boomer" who is desperately behind the times].

This is what Rand referred to as "the welfare state of the intellect," and the result is as destructive as that other, more visible and stultifying welfare state: the setting up of politicians, bureaucrats and their minions (the establishment) as arbiters of thinking and taste and ideology; the freezing of the status quo; a staleness and conformity, and an unwillingness to speak out – what Frank Lloyd Wright once called “an average upon an average by averages on behalf of the average” such that in interrogating any one modern artist you would get essentially the same answers as from any other -- in short "the establishing of an establishment" to which new entrants in a field realise very quickly they are required to either conform or go under.

If you talk to a typical business executive or college dean or magazine editor [or spin doctor or opposition leader], you can observe his special, modern quality: a kind of flowing or skipping evasiveness that drips or bounces automatically off any fundamental issue, a gently non-committal blandness, an ingrained cautiousness toward everything, as if an inner tape recorder were whispering: "Play it safe, don't antagonise--whom?--anybody."

If you've ever wondered where this "special, modern quality" comes from, this is perhaps one answer -- through the intellectual mediocrity advanced by this less well-known form of censorship -- a censorship of encouragement. It's a much less obvious and much more insidious method of censorship, and no less chilling for that.

The [US] Constitution forbids a governmental establishment of religion, properly regarding it as a violation of individual rights. Since a man's beliefs are protected from the intrusion of force, the same principle should protect his reasoned convictions and forbid governmental establishments in the field of thought.

Think about it.

* * * * 

* From "The Establishing of an Establishment," republished in Rand's book Philosophy: Who Needs It?, from which the otherwise unreferenced quotes above derive. Highly recommended if you want to get to grips with this subtle form of censorship.

Send a copy to the Free Speech Union.

50 years of welfare breaking up families

 

Welfare commentator Lindsay Mitchell reminds us that today marks the fiftieth anniversary of the one welfare measure responsible more than any other for supporting family break-up, and creating generations utterly dependent on largesse from the Welfare State.  In her measured words, 

the growth of the sole-parent family dependent on welfare has correlated with more poverty, more child abuse and more domestic violence. Each of these was intended to be reduced by the introduction of the DPB.

After fifty years, it's time to recognise that the opposite has happened. 

In 1966, in her summary

there were 922,349 dependent children under 16 years of age. 883,239 depended on married men or 96 percent of the total. A further two percent (19,829) depended on widows or widowers. The remainder had unmarried, separated, divorced (and not remarried) parents, or were orphans.

So, seven years before the DPB was introduced fewer than five percent of New Zealand children were in a one-parent situation. More than ninety-five percent of children lived in two-parent families.

After a "temporary" Domestic Purposes Emergency benefit was introduced by Holyoake's National Government, the Kirk Labour Government made it permanent, "having been hurried along by a National private member’s bill to the same effect." At the time, the new benefit barely even attracted any attention. But numbers soon exploded" 

'Children with a parent on DPB increased from 4% of all children under 18 in 1976, to 17% in 1991, and to 19% in 1996.”

And now: New Zealand has 1,123,500 children, 404,700 of whom , over a third of New Zealand's children, are living with a sole parent who is largely or wholly dependent on 'the benefit.' 

And "in the most deprived neighbourhoods," Lindsay notes, the percentage is much higher."

In the words of David McLoughlin, whom she quotes, the Domestic Purposes Benefit (DPB) has been a "disaster."

A temporary "emergency benefit," based on "need" was replaced with a permanent benefit based on a so-called entitlement, inviting -- nay, encouraging! -- generations to rely upon it as a way of life. Disastrous for them, for their offspring, and for those who pay their bills. And also for what some commentators refer to as "social cohesion." As Thomas Sowell reminds us:

“One of the consequences of such notions as ‘entitlements’ is that people who have contributed nothing to society feel that society owes them something, apparently just for being nice enough to grace us with their presence.”

And when thwarted, niceness can turn to anger. To deprivation and resentment. And to Entitle-itis -- including encouraging parents to split to increase their welfare income. (“'Perversely, because benefit eligibility reflected individual circumstances, and benefit rates and means testing were based on family income, many families were better off financially to separate.' One parent would claim the DPB while the other claimed the unemployment benefit.)"

Lindsay's post lays out the history of this most disastrous of welfare schemes, and today's tragic result of family break-up. Right now, she summarises:

• Benefit-dependent single parents are on the rise again. 
• They proliferate in emergency housing. 
• Single parents have the lowest home ownership rates, and the highest debt-to-income ratios. 
•  Police report that family violence is at record levels – 
• single welfare-dependent females are the most vulnerable to partner violence, according to victim surveys. 
• The correlation between substantiated child abuse and appearing in the benefit system is incredibly strong. 
• Child poverty now drives both a public and private industry of people who claim to be helping to alleviate poverty. 
• There are domestic child sponsorship programmes, KidsCan, Variety, etc. Forget famine-stricken African nations.
• While benefits became more generous ... remaining obligations to the taxpayer became passé. 
• There is no sign whatsoever that a resumption of deserving and non-deserving considerations will make a comeback. In fact, morality is ever more remote. 
• Widows who become sole providers through no fault of their own are no longer differentiated from gang women who produce children as meal tickets. 
• No distinction is made between reasons for ‘need’:the taxpayer is expected to like it or lump it, despite the fact that fifty years of trying to solve social problems with cash payments has only made them worse.

The DPB has changed its name, but not its outcomes -- which have only deteriorated. Despite that, there is zero pressure to change it, and no political courage anywhere to even reform it. "When reforms do occur," she concludes, quoting US commentator Charles Murray, "they will happen not because the stingy people have won, but because generous people have stopped kidding themselves.”

    >>READ LINDSAY'S WHOLE POST HERE.

It's been all too common for pro-socialist politicians here and elsewhere to talk up Sweden, to offer up it's "pro-socialist" policies and welfarate-state programmes as examples for us all to emulate. "Look," they say, "they have socialism and prosperity!" Problem is, as Swedish writer Johan Norberg explains in this guest post, that Sweden was most pro-socialist way back in the Seventies, when it was squandering the riches of a century, and it's only become prosperous as it's abandoned that notion, and embraced instead "a new period of liberalisation and of economic reform” ...

Johan Norberg: Bernie Sanders’ Vision of Sweden Is a 1970s ‘Pipedream’

When Senator Bernie Sanders and others like him talk about Sweden as a socialist paradise, they are promoting a tax‐​the‐​rich “pipedream” from the 1970s that never really existed, said Johan Norberg, a Swedish author, historian of ideas. Sweden today is a “much better and much freer place” than it was in the 1970s, says Norberg from his home in Stockholm.

“So today, if Bernie Sanders wants to imitate Sweden, he would have to reform Social Security, partially privatize it,” said Norberg in an interview with ReasonTV, a division of Rea​son​.com. “He would have to … abolish property taxes and inheritance taxes, and stuff like that, implementing national school voucher systems…. So, Sweden today is not what he remembers from the 1970s. It’s a much better and freer place than it was back then.”

Norberg, also a documentary filmmaker, earned his M.A. in the History of Ideas at Stockholm University. His latest book is The Capitalist Manifesto, which was praised by Elon Musk on X. During the ReasonTV interview above, Norberg was asked to respond to some of Sanders’ glowing comments about Sweden, which the self‐​described socialist had made during his 2015 presidential campaign.

In an inserted news clip, Sanders said, “In countries in Scandinavia, like Denmark, Norway, Sweden, they are very democratic countries obviously. Their voter turnout is a lot higher than it is in the United States. In those countries, health care is a right of all people. In those countries, college education, graduate school is free. In those countries, retirement benefits, child care are stronger than in the United States of America. And in those countries, by and large, government works for ordinary people and the middle class rather than, as is the case right now, in our country, for the billionaire class.”

Bernie Sanders: "Look, ah, Sweden!"

When news host George Stephanopoulos then said that Republicans would run an attack ad accusing Sanders of wanting to make America more like Scandinavia, the senator replied, “That’s right, that’s right.”

ReasonTV host Zach Weissmuller then asked Norberg to comment on Sanders’ remarks. Norberg replied,

"This is why Sweden is not a libertarian paradise. We might have free markets, but we do have a very generous welfare state. It’s true that many of these things are handed out by the government – it’s funded by the government at least through private providers. But the thing is we pay for these things ourselves. That’s an incredibly important point to make. Because there is this pipedream of Bernie Sanders and others that this will somehow be paid for somehow by the rich.”

Norberg continued:

“But Sweden learned in the 1970s. You can pick one: a big generous welfare state or you can make the rich pay for it all. You can’t have both. If you have a universal generous welfare state, and make the rich pay for it all, they will stop being rich. They will move. They will stop starting those businesses, the Ikeas of the future, and will move. Instead, you have to get most of the taxes from low‐ and middle‐​income households. That’s the dirty little secret of the Swedish welfare state.

“The socialists love the poor taxpayers because they are reliable, loyal taxpayers. They don’t dodge. They don’t move to Monaco. They don’t have tax attorneys. So we have the bulk of our government revenue coming from regional and local income taxes, which are flat. Income taxes are not progressive…. Also, things like a value‐​added tax at 25%, in general, on most goods. It’s obviously regressive. The poor pay as much as the rich when they buy food, in taxes.

“This means that when the OECD club of mostly rich countries look at different tax systems around the world, they say that the Swedish system is one of the least progressive tax systems of all. Much less progressive than the United States because America’s welfare state is so small, so you can rely more on the rich. Whereas here, we all have to pay for it.

“The Swedish welfare state mostly just redistributes over an individual’s life cycle. We get lots of stuff when we’re young, in preschool and school, and then we work hard and pay for it all, and then we get much of it back in health care and retirement benefits. Which mostly means, yes, we get lots of stuff but we pay for it all….

“It’s so interesting that socialists keep coming back to Sweden and I think that’s because all their favorite countries constantly fail. Every Cuba and Venezuela ends up with bread lines, millions trying to escape from that horror show. But they always have Sweden. It seems so friendly and successful and yet socialist.

“We have been socialist in Sweden and we have been successful but never at the same time. That’s what Sanders and the others fail to realize. We had that period in the 1970s and 1980s when Sweden was doubling the size of public consumption, raising taxes, regulating everything – price controls, what have you. This is the moment when Bernie Sanders and all those who are sort of stuck in the 1970s, this is what they still remember: ‘Look at Sweden! They’re socialist! But they’re also one of the richest countries on the planet! It seems to be working in Sweden.’

“The problem, of course, is that it’s like that old joke, how do you end up with a small fortune? Well, you start with a large fortune and then you waste most of it. That’s what Sweden did in the 70s and 80s. We were one of the richest countries on the planet before this experiment. And this was based on a 100‐​year period of limited government, free markets, free trade, as late as 1960. We had lower taxes than the United States and most European countries. This brought us all the wealth and all those successful international companies, the Ikeas and stuff, that brought us so much wealth that politicians thought they could just redistribute everything and begin to just jack up spending and taxes.

“Well, they couldn’t. Because the 70s and 80s, that’s the one period in modern Swedish economic history when we lagged behind other countries. This is the moment when we didn’t create a single net job in the private sector, and when entrepreneurs and businesses left Sweden. Ikea left Sweden. Tetra Pak left Sweden. Most successful entrepreneurs left because it was impossible to do business in Sweden. This all ended in a terrible financial crash in the early 1990s.

“So that was a brief period of time and it’s one that we don’t want to go back to in Sweden. Not even Swedish socialists – even they say, okay, we went too far. The Social Democrat finance minister at the time said it was actually absurd and perverse in many ways, what we were trying to do. Since then, Sweden has again become successful. But that’s based on a new period of liberalization and of economic reform.”

Perhaps that is the Swedish model policymakers should try to emulate.

* * * * * 

This post first appeared at the Cato Institute blog.