Monday, June 29, 2009

Welfare reform

Lindsay Mitchell talks and writes on welfare reform better than I do or can. But I can give a broad response to this article by Susan St John and Keith Rankin as discussed by Danny Watson on Newstalk ZB this afternoon.

The staggering thing when listening to Watson was the amount of people who called in and virtually demanded the State pay them something when they are made redundant. That was the general thinking: that the State owes us. In a sense it's true. After all, you pay tax (and goodness knows we pay a lot of that) and when you want the service from the State for the tax you've paid you don't get it. ACT tried to point this out a while ago when Rodney Hide gave speeches on Social Contracts. Sure, you have rights viz a viz the State (to an extent) but it mustn't be forgotten that the State also has rights viz a viz its citizens. But in this country people tend to pay a lot of tax for not much return when they need it (as distinct from when they want it). And this applies equally to things such as Health and Police as well as Welfare.

But what got me going was that the callers into the radio show had this overarching sense of entitlement. They saw it is almost mandatory; that the State must provide for them if they come across tough times. Hardly anyone challenged this, least of all the host. No callers that I heard were willing to challenge the concept of the Welfare State as a concept; there was no other option.

Which brings me to the other way of thinking. ACT pointed out many times last year in the lead up to the election that the Labour government had overspent in the approximate amount of $60-$80,000.00 per household over the nine years it was in power. That is, they spent over and above the rate of inflation per household and starved families and workers of this approximate amount. If government spending had been at inflation plus population change, on average each family would have had that cash in their pocket.

Now you can debate all you like about whether they would have spent it or saved or retired debt with it, all of those options aren't bad. Spending it helps the internal economy, and saving it or retiring debt is very useful in New Zealand's overall context. And if it was spent on boats or cars or TV's then when the tough times hit they wouldn't have it to help their families. But that's their problem, not mine. And that last sentence is the crux of the issue: who's problem is this? At the end of the day we are all responsible for ourselves, and if the large majority of us make sensible and wise decisions with our money then collectively, as a country, we will be better off.

Here's the thing about welfare and hits on the problem as discussed by Danny Watson. Sure, if you can't pay the bills their should be a safety net. No one would argue otherwise. But what about the guy on nett $130K with per annum expenditure of nett $100k with 3 kids and a wife who doesn't work? Shouldn't the State pay him $2K per week to help him out, which is what he needs to pay the mortgage and feed the kids etc. If not, why not? What's the difference between this guy and someone on nett income of $35K per annum with no kids and nett expenditure of $33K? At face value the only difference is they need less to survive on. But who judges that? The politicians? No, that's bullshit they they should.

Arbitrary rules do not take into account individual circumstances which is actually what Susan St John and Keith Rankin argue. They're actually correct. So to rectify this we should just keep more of our money because only us, as individuals, really know how much we need to live on and need to support our families. That's why we need a cap on government spending, a cap on rates, a flatter, simpler tax system and more money in our pocket.

But I didn't read those solutions in the St John/Rankin thesis. And I didn't see any assistance in Peter Dunne's "worthwhile" contribution to the issue:
"Revenue Minister Peter Dunne said an update of the welfare system would be a "massive undertaking".

"The system has grown haphazardly over many years. [Revision] is not going to happen this year [or] next year. It will happen over a long period.

What a feeble response from a feeble minister. The sooner the government ships him to the US the better.


erikter said...

This sense of entitlement you're talking about is etched in the brain of many, many fellow Kiwis.

I was very surprised by it when I moved to NZ in the early 90's. For what I can tell the trait is very much alive.

That explains why so many people continue to vote Labour and support its socialist agenda, although National is not much different either.

Lindsay said...

Where did you come from erikter?

Based solely on the numbers relying on welfare in other countries eg Australia and the UK, the sense of entitlement doesn't appear confined to NZ.

It was a depressing programme indeed Gooner.

Anonymous said...

Why doesn't the GOVT just be done with it and pay everyone the dole regardless of their job and income status. I read an article on it a while back and it's got a name, the universal living allowance I think.

Of course I disagree with it, I'd rather they reduced my taxes and left me alone, but most NZers would be clamouring for it. So why don't they stop pissing around and do it. All they care about is getting reelected so its a win-win for them too.

Redbaiter said...

Danny Watson is a fucking socialist idiot and so are the morons who listen to him.

The Silent Majority said...

Indeed Gooner.
It's a tragic state of affairs and whilst it depresses me no end, it doesn't surprise me.

Our culture is soaking in the entitlement mentality, and it's cradle to grave. For example, if every parent had the time to monitor every bit of information their child is being fed at school (and NOT just state school)they'd have to spend too many hours a day re-educating their children. It's everywhere. Even Fourth Form Auckland Grammar Economics is imbued with the wrong mentality but who has the energy or the time to put it right? And it is often very, very subtle.

I find I need a good dose of reading the latest Roger Douglas speech or article to make me feel sane again!

Anonymous said...

This is just one more reminder that the only real way to keep our economy strong is not by raising taxes, but by keeping taxes low, fair and simple.

We need to take action and contact our legislators and sign petitions like the ones the U.S. Chamber of Commerce backs (here).

Glad im here said...

This post by Old Holborn says it all.

It had to happen. When you pay people to sit at home all day, guess what they will do?

We have now reached the stage where those who toil, those who sacrifice their effort, those who risk their own capital and their own time to earn money to finance their dreams are no longer able to finance those who choose to do fuck all.