On National’s housing

Inititally drafted as a comment on the DimPost - which hasn’t shown up, perhaps existing in a state of perpetual quantum flux of both posted and unmoderated.

My thought’s on National’s “big” plans:

National’s in a bind here – Rogernomics-era policies of tax-free capital gains and inflation-only RBA are a big millstone.

If National’s scheme for first home buyers actually does lift a significant number of buyers into the market it will further fuel our insane housing bubble: keeping interest rates higher than the rest of the OECD and as a result further erode the competitiveness of our exporters. This is macro 101 stuff.

The reality is though, this scheme actually does sweet FA to really help first home buyers – an extra $10k for a new build only represents something like 35 days of housing inflation in the Auckland market. This is how fundamentally broken our economy has become – a $10,000 fillup for builders nearly falls within the rounding error.

The take away: even if it works it’ll only serve to make housing less affordable in the long run.

National is actually very weak here. No rational observer can can support our current system of economic management – it simply isn’t sustainable, it’s pure self-inflicted stupidity. And that’s ignoring actual problems we face such as rural waterways on the verge of collapse, an unfunded superannuation timebomb and 4 degrees of global warming.

Even the short term is grim at the moment – the Government’s own figures show growth is set to halve over next couple of years.

#BrighterFuture everyone

Labour’s Perversion: the Winners and Losers of the Welfare State

It’s been interesting watching the unveiling of Labour’s policy platform of this year. Despite what the media and Prime Minister may tell you, this election is a near-certain romp for National, and a near-certain record defeat for the Labour Party.

Winners and losers you see.

Yes, there’s a small chance things may be upset (Kim DotCom’s planned release on Sept 15), and Nicky Hagar is releasing another book likely with data culled from Edward Snowden. But, barring a major collapse or calamity of the dead-girl or live-boy variety, I’m calling it now. Labour’s probably good for 27-28%, losing nearly a tenth of those who voted for Phil Goff’s historic defeat.

This is the humiliating reality facing the Labour caucus as they enter this election campaign.

The desperation is clearly showing, no more so than with the flagship Labour policy of this election – free doctors visits and prescriptions for those over 65. While in theory free access to healthcare should be a universal right, our user pays status quo makes this sort of policy very expensive, and hence there is a huge opportunity cost.

So why spend this money to gold-plate healthcare access for one demographic over any other?

The plan apparently has been costed by Treasury at $120 million per year – possibly accurate, though Labour hasn’t bothered to engaged with the privately operated sector on this policy. From NZMA

“while the Labour Party has acknowledged that it needs to talk with general practice about how these increased subsidies should be introduced, fully subsidised care has been promised to other groups without that sort of discussion. “General Practitioners are private businesses, not state employees and need to be able to set appropriate fees. For visits to be free to patients, General Practice needs to agree that the subsidy is sufficient to cover the significant costs associated with running a Practice,” he says.”

We’ve been here before with Labour – making electoral promises the front line simply cannot keep. “20 hours free childcare” morphed into something a lot less. Now even a limited childcare or healthcare subsidy is of some use to impoverished people, but Labour’s track record and complete lack of consultation in this space should be concerning.

But lets put these niggling doubts to one side – there’s an election on and policy must be made. Let us give the Red Team the benefit of the doubt – they are after-all facing a historic defeat so it behooves us to be generous and accept Labour’s promise of free GP visits and prescriptions at the projected cost.

Of more concern however, is establishing the scale of the social problem that Labour are attempting to fix. And it is here that this policy falls, profoundly.

The issue being that over 65s are the demographic in our society with the least deprivation, and the group who currently enjoy the best access to GPs and prescriptions.

The extremely low level of poverty amongst our elderly should come as no surprise to anyone, thanks to a universal income given to everyone in that age bracket. This is not means tested, nor clawed back through abatement unlike other benefits in our social welfare system.

This benefit has also been indexed to increase wage rises – last set by Labour to 66% of the average wage. The universality of the scheme, and the relatively high rate is responsible for elderly in NZ to have lowest rate of poverty for the elderly in the OECD

Within our own country, the elderly have the lowest deprivation of any demographic.

For as well as a relatively handsome income (by the standards of NZ’s poverty-level benefit system) those older citizens have been the recipients of the greatest welfare state of the 20th Century. Free education, free healthcare, full employment and well paid jobs greeted our elderly when they left school back in the day. Bold Government housing initiatives and family allowances allowed home ownership to soar to levels that the current working generations can only dream of.

The neoliberal revolution that kicked off in 1984 has led to 30 years of low taxes during the prime earning years of this cohort, allowing them to keep much more of their income, while at the same time as other demographics faced the introduction of high unemployment, declining wages, huge cuts to the social safety net and the introduction of user pays. All familiar to those who have watched Alister Barry’s excellent In a Land of Plenty.

This systemic and entrenched privilege means that NZers 65+ not only enjoy less deprivation, but also enjoy better access to user pays healthcare than any other group, including children.

The proof is in the pudding: from Kiwiblog

The Ministry of Health done an annual health survey. One of their questions is whether someone has not gone to see a GP in the last year due to the cost. Here is the breakdown, in order, by age:

25 – 34: 22.3%
35 – 44: 17.8%
15 – 24: 15.8%
45 – 54: 13.9%
55 – 64: 12.1%
65 – 74: 6.3%
75+: 4.7%

So Labour’s policy is not just slightly badly targeted – it is as far away from the area of most need as possible. They are saying we must provide free GP visits to the age group that has the least problem paying. It’s is purely about middle class welfare votes, not about health.

What about free presciptions? Here’s the breakdown by age again of those who did not get a prescription filled because of cost:

25 – 34: 7.6%
45 – 54: 7.5%
35 – 44: 7.2%
15 – 24: 6.1%
55 – 64: 5.6%
65 – 74: 3.2%
75+: 1.9%

Also the Health Survey shows a positive trend for prescriptions, not a worsening one. The proportion of elderly not being able to afford to get their prescriptions filled dropped by a quarter to a third in the last year.

None of this is to say that every old person is rich, nor every old person has perfect health access. But, as a whole, the evidence is overwhelming that older people are better served by our health system than any other group in society already.

“To each according to their need” demonstrably wasn’t the driving issue behind this policy. It’s a cynical vote buying scheme benefiting the most comfortable demographic in our society. The elderly should be at the back of the queue here – there are much more worthy ways to use this precious health spending.

There’s also something more than a little galling watching Labour promising to spend up large on the patently false basis that people aged 65+ are the most deserving of our limited resource, while simultaneously cutting access to superannuation for younger current workers by lifting their age of eligibility to 67+.

Not only are Labour seeking to deny working New Zealanders the chance to retire with dignity at a reasonable age, but Labour also want to compulsorily garnish the pay packets of working New Zealanders with Kiwisaver. Important as it is widely believed that current spending on Super is completely unsustainable. This medium-term unsustainability is of no real consequence to current Labour MPs or Super recipients – most will be long dead before the coffers are emptied, and politically no attempt to means-test or claw-back this sacrosanct benefit can be made.

We pay millionaires in mansions a comfortable wage while working families struggle to subsist in garages in South Auckland and Christchurch.

To further add to the burden David Parker is also heaping responsibility for addressing inflation onto workers by allowing the Reserve Bank to hike Kiwisaver rates on the fly, lifting contributions to as high as 12%.

Workers with a student loan, could see as much as 24% of their income over the repayment threshold to be taken from them via loan repayments and Kiwisaver. Meanwhile the housing stock is locked up by an older generation of speculative New Zealanders who have bought up handsome former statehouses built on generous inner city sections. This housing speculation is of course the driving factor of our inflation rates, and thus the property acquisition of richer New Zealanders will result in lower take-home wages for workers under Labour’s proposal.

Parker has a rock-and-a-hard-place problem here. A low level of savings coupled with ballooning superannuation costs, an outrageous housing and inflation bubble and a imbalanced tax system means any rational Minister of Finance will face some tough choices. Someone is going to have to make some sacrifices along the way to keep our society copacetic.

But Labour’s choice is to force every sacrifice onto the young and working age generations. Those who are doing best, the demographic that can best afford to share some of their great wealth, the elderly, are cossetted from any negative effects of the unsustainable spending they have repeatedly voted for.

It’s a form of inter-generational theft, where Labour is attempting to pervert the welfare state to further cosset the most comfortable generation.

Labour’s superannuation and health spending, coupled with compulsory Kiwisaver and inflation busting will have a cumulative effect.

Labour is planning to wage a war on working age people.

From 1984 we have had 30 years of declining wages and increasing inequality and it is the deprived working poor and beneficiaries who will struggle to bear the brunt of rebalancing Labour’s economy. It is the children of workers who have poverty rates four times that of the elderly.

To what then of our social compact that we should support a robust welfare state, cradle to grave?

Simply put – it’s as dead as the word grave implies. The compact has been torn assunder by 30 years of neoliberalism.

And now we see that rather than reject Rogernomics, the Labour Party, have once again set out to become the enemy of the the working class. To take from the working poor, and give as much as possible to the rich. Labour are either too cowardly to defend the welfare state, or too venal not to resist exploiting it for cheap electoral advantage.

Yes, universal free healthcare is desirable, exploiting the poorer young to give it to the much richer old is morally unconscionable in light of the poverty experienced by much of New Zealand society aged under 65.

Either way, Labour clearly sense their electoral irrelevance and the caucus is in survival mode. And this attack on workers shows they’ll throw anyone or anything, including oxymorons like “Labour Values”, under the bus to preserve their seats.

Labour will punish working New Zealanders. They’ll steal from the poor and give to the rich. They’ll steal from our future for today’s electoral gains.

See, it is all about winners and losers.

Weta Spotting

I’ve always enjoyed the slightly nerdier side of life. Therefore it didn’t take much for this article on Stuff to pique my interest.

Massey University entomologists are calling for volunteers to capture specimens and photos of New Zealand’s creepiest of crawlies – the weta.
The university’s Ecology Group has launched the “Weta Geta” website on how to identify New Zealand’s orthoptera, such as grasshoppers, crickets and especially weta.
The public are being invited to send in photos of weta to help Massey researchers classify new and existing species and catalogue their whereabouts.
Unfortunately the Massey page seems a bit hit and miss – it worked a week ago, but seems out of commission today: definitely a Weta Geta in beta. Not that it matters too much, it functions as a taxonomy guide and then links users to naturewatch.org.nz to actually record sightings.
There’s something rather pleasing about identifying and reporting such marvelous animals, even if the specimens are Hemideina crassidens (Wellington tree weta), a rather common sight here in Karori.
Image

Budget a fillip… for ACT?

Further musing on last week’s budget has led me to consider just how this piece of electoral maneuvering changes the familiar political landscape.

Key can now reasonably claim National are a centrist party. Beyond throwing the leftier Labour into relief, this has the added bonus for National of opening up more space on the right flank of the party.

ACT have struggled for some time now. Not withstanding the laughably poor candidate selection (Banks, Calvert, Garrett), the sense that National have absorbed ACT’s ideologically-driven voter block has pervaded. So much so that even the 2008 parliamentary reentry of cult-hero Roger Douglas was entirely underwhelming. ACT fell to 1.07% of the vote in 2011 – those 23,889 votes entirely wasted as they were unable to shift the needle beyond the single electorate seat of John Banks.

Banks, along with being a former National minister, essentially ran on the (paraphrased somewhat) campaign slogan “vote for me: for PM John Key”. ACT clearly could not be seen to be presenting any alternative beyond the constraints defined by National.

Key’s wet budget changes this, especially when viewed alongside ACT’s alternative 2014 budget. For the first time in years there is now some daylight between the positions of ACT and National.

Granted, it is cigarette paper thin – ACT will still rely upon the proportional-gerrymander of a gifted electorate seat: ACT will not bite the National hand. But with political opposition hardening against the coat-tailing provision in our electoral law, it seems prudent for those on the right to ensure that their political spectrum does not remain monolithic.

Jamie Whyte must surely be pleased – ACT has found a raison d’etre.

Budget 2014: Same-Same and the Overton Boogaloo

Budget 2014 has dropped and it has delivered few surprises. Writes the imminently sensible Keith Ng at PublicAddress

Ultimately, I think this budget is fine, and National really is doing a reasonable job of managing the finances. I expressed doubts a few budgets ago them pushing the cuts to future governments, but here we are, they’ve actually worn the worst of the cuts.

While the sobriquet “rock star” must surely be beginning to piss-off the chaps on the Treasury benches, there is no doubt that our country is in a relatively stable position. The structural problems left over from Clark are still unsolved (superannuation, balance of payments, housing inflation), but in large part we’re looking pretty fit compared to much of the moribund OECD.

Sure, it still sucks to be poor, and rich people accumulating wealth via capital gains are still untaxed. Our rivers are still toxic, and climate change has the potential to claim us all. Sure. But we could be a fair bit worse off.

If anything the performance of NZ post-GFC is testament to the sobriety Micheal Cullen exhibited to repeatedly bank mammoth surpluses to reduce debt. Our current health also reinforces how reckless the position was of Brash-era National – crying for big tax cuts in a red-hot inflationary economy, while calling for Government to increase debt to fund infrastructure. Had New Zealand followed Brash post-2005, it’s easy to see that we would be a lot poorer off right now.

What is most interesting for me however, are the two key social policies rolled out by the Government. Free healthcare for under children under 13 and a four week extension to paid parental leave. This is the type of shameless and overt social interventionism that would surely have been opposed by prior National caucuses. I can only imagine the howls of anguished rage coming from Jamie Whyte when he discovered that sick children would be further insulated from the fiscal consequences of their choice to fall ill.

This type of expensive social policy is exactly the sort of thing that used to be called “communism by stealth” (John Key 2005), moderated slightly to a “dead rat” that had to be swallowed (Bill English 2009), and now in 2014 the same men in charge of the National Government are proudly announcing headline policies to the left of those that Clark achieved.

So while much may be same-same in Budget 2014 it is clear that the New Zealand version of the Overton window has shifted – resolutely.

Waitakere Woman?

Further to my last past on the irrelevance of the trope of the red-blooded-Shane-Jones-type Waitakere Man in the modern electorate, it is pertinent to look at policies that the National Government have pre-announced from this week’s budget. The theory being that if the concept of Waitakere Man was worth a damn then there should be plenty of evidence of National targeting their policy towards his valuable political interests.

So what hairy-chested policies have National pushed forward to snare this bloke?
Counseling for victims of sexual violence has been increased by $10.4 million.

$1 million tackle the country’s “nits epidemic”.

John Key says paid parental leave will be extended in budget.

Waitakere Man has never been more than an ideological burp; anthropomorphising two key issues with the 5th Labour Government. Firstly the failure of 3rd Way neoliberalism to address the economic interests of the working class, and secondly unease with which traditional patriarchal structures within the left are now forced to engage and share power with minority groups such as GLBT, ethnic minority groups and women.

Champions of Waitakere Man need to question why they championed support of anti-women or anti-GLBT stances. Instead of seeing him as a valuable part of the NZ electorate, perhaps Waitakere Man was coming from inside the house.

Shane Jones Edition

Originally this post was intended as a comment to the (always excellent) DimPost’s writing on, what else, Shane Jones.

The crux of the Jones-issue concerning political minds is – how useful was Jones’ connection to male working class voters? I genuinely believe Jones did connect on some level – as I wrote on the Dim:

FWIW – at the leadership meeting I went to Jones definitely connected best with the blue collar guys sitting in the row behind me.

The line that received the most spontaneous murmurings of assent from the crowd was Jones criticising the performance and discipline of the Labour caucus, something that Cunliffe and Robertson didn’t do.

Jones is definitely a skilled communicator, and reached a part of the electorate that Labour has long struggled to attract. But I don’t think this connection is necessary for a Labour victory. In fact, the more I think about it, the more I think Labour will be better off without Jones.

Waitakere Man doesn’t exist as a viable bloc of voters for the left, at least in the way pundits like Trotter and Pagani et al would have you believe.

Men tend to vote right, women tend to vote left. This rough rule of thumb can be seen across Western democracies; it’s a useful place to start when looking at our electoral narrative over the last few cycles.

Take a look at the last two competitive elections Labour faced – 2005 and 2008. National’s success under Key and failure under Brash can largely be attributed to differences in how those two leaders connected with female voters.

Women were turned off by Brash and the Nats lost. Brash was dry, alienating and misogynistic – decrying Labour’s women-friendly policies, demoting women from National’s front bench and, in a final symbol of his political death knell, was exposed as cheating on his wife. Conversely Key is well related to and trusted by women, meaning Labour languishes. Key presents himself as wetter, softer and safer than Brash – a true family man who is much more attuned to the female electorate, and importantly employs highly visible women ministers to champion National’s work.

The “centre ground” of NZ politics that National occupies essentially was staked out by Clark. It’s simple 3rd Way Neoliberalism – involving acceptance of key female-targetted policies like paid parental leave, WFF, and interest free student loans. Mums love their kids, and they vote with children in mind.

National has readily absorbed this -  and hence major iniatives are frequently couched in ways that appeal to this middle ground of female voters. Tinkering in schools has been largely framed so as to maximise appeal to suburban parents with a focus on choice and parental empowerment; assets sales become family-friendly when they are promulgated as helping these same suburban “mums and dads”, despite them only being a tiny slice of actual stock buyers.

The truth of the matter is that there isn’t “centre ground” issues or policies in our political landscape that Waitakere Man is a player in. He is either is in a union and votes in his class interests, or more likely isn’t unionised and tends to vote to the right. Waitakere Man cares much less about paid parental leave or WFF, and most likely actively resents unions despite them championing his economic interests. This is the chap who doesn’t mind hearing someone in a suit using meaningless phrases like “business growth agenda” as neoliberalism argues that what is best for business is best for him.

Meanwhile, there women who voted Labour in 2005, but who switched to Key in 2008. And due to: (pick one) the political cycle/the power of incumbancy/opposition incompetence, they’ve been Key voters ever since. Women are the low-hanging fruit for a left-wing party – securing this demographic is paramount for a left victory.

And Jones just doesn’t appeal to women – he actively alienates them. The porn, the jokes about geldings, the red-blooded appeals that so excited political pundits – none of it resonates with the key bloc whose choices will decide the next Government.