The Dim-Post

August 9, 2010

Chart of the Day, elephants in the room edition

Filed under: economics,Politics — danylmc @ 7:25 pm

The terms of reference for the Welfare Working Group specifically precluded them from looking at superannuation and Working for Families, but here’s a chart showing Treasury stats for total social assistance spending for the ’09 financial year:

I guess if you exclude super and WFF then the DPB really jumps out at you. Holy Cow! We need to lock that down! So we have a discussion about ‘how many solo Mothers really need assistance?’ But we pay super to anyone over the age of 65. Own millions of dollars in property and investments? You’re still eligible for superannuation. Working and earning a good income? You’re still eligible for superannuation. Seems like there might be room for efficiency gains there, don’tcha think?

The other problem with reforming welfare for people like invalids and solo Mothers is that getting them off benefits is contingent on them finding jobs (obvious but still seemingly beyond the keen of the WWG), and thus training them and so on, not to mention the social costs and administrative overheads of such a policy . But if you cut superannuation payments to the wealthiest 1% of super recipients you save $77 million dollars a year overnight with almost no fiscal costs, secure in the knowledge that the people losing their benefits are still far more privileged than everyone else in the country.

But of course there would be dire political consequences which is why we’re talking about invalids and teenage mums instead.


  1. We need to increase the age of eligibility for Super, make it 67 by 2025.

    Comment by Vibenna — August 9, 2010 @ 7:38 pm

  2. The problem is that means-testing super is an effective tax on saving, at least if you do it based on assets. Surely if there’s anything we don’t want to tax it’s saving.

    Comment by Tom M — August 9, 2010 @ 7:41 pm

  3. Solo mums don’t vote, the over 65 does.

    Comment by Berend de Boer — August 9, 2010 @ 7:43 pm

  4. wow… welfare for families is really a big slice innit?

    and who the in the hell is seriously going to go after retirees? you’ll have whinston and lhaws in parliament before you can say “get off my lawn”.

    Comment by che tibby — August 9, 2010 @ 7:45 pm

  5. vibenna, by 2025 most of the boomers would have been claiming super for at least 20 years…

    however, GenX, the ones paying for the boomers, will just be starting to exit the labour force.

    so, not a solution.

    Comment by che tibby — August 9, 2010 @ 7:47 pm

  6. And hunt down those ‘other’ fuckers too, sliding through the system with so assumed anonymity, they make me sick, so sick I think I’ll sign on tomorrow.

    Comment by davy crockett — August 9, 2010 @ 7:49 pm

  7. We need to (semi)privatise super. I.e. compulsory Kiwisaver.
    Perhaps at age 65 (or 67 or whatever), some of the funds must be used to buy a “comfortable” living annuity. If an individual has insufficient funds (as would likely be the case for a long-term non-earner), the taxpayer could top this up in order to buy the annuity. Individuals would be free to do as they please with the balance of their savings.
    National Super could be grandfathered out of existence, as all new super annuitants would have an annuity purchased for them (with taxpayer top-up) out of the balance of their Kiwisaver fund that arises after the introduction of compulsion.
    Any taxpayer top-up to purchase the annuity would be subject to the individual’s term of residence. Thus folk could not retire to New Zealand and receive the top-up. (This would be similar to the UK’s National Insurance Stamps, although acquiring those “stamps” seemed to require that one earned an income and paid UK tax. I guess as beneficiaries pay tax, they are earning credits/stamps and are thus not abandoned in their old age.)
    Just a thought.

    Comment by Clunking Fist — August 9, 2010 @ 7:52 pm

  8. Sounds like future policy to me CF.

    Comment by davy crockett — August 9, 2010 @ 7:54 pm

  9. The point is that the debby makes hands for idle work, or some such protestant nonsense.

    Old people that have lived to be old and wealthy by working hard at finding indoor work with no heavy lifting, should be rewarded with a pension if they choose to continue to work longer than those in their cohort who, through every fault of their own, find themselves dead or broken down by age 65.

    Comment by Pascal's bookie — August 9, 2010 @ 8:01 pm

  10. My hope is that Labour will come up with a really good plan; National will campaign loudly against it and win the election; and then quietly steal and implement 90% of it.

    Comment by gazzaj — August 9, 2010 @ 8:13 pm

  11. There’s a chart of the same thing from 10 years ago in page 2 of this report. Total social budget back then was $12.9m

    Comment by scrubone — August 9, 2010 @ 8:13 pm

  12. $12.9b

    Comment by Pascal's bookie — August 9, 2010 @ 8:26 pm

  13. I thought it was quite funny how steven Joyce just hinted at the fact that possibly it might not be the absolute wisest use of our transport subsidies to 100% subsidize people over 65 to go on day trips to Waiheke ($2 million of the total $18 million spent on subsidizing pensioners trips on public transport is spent on trips to Waiheke – only 15% of which are taken by island residents).

    the backlash was immediate and he instantly took fright and announced that we couldn’t possibly consider making any cuts to the public transport part of the Super Gold Card ever. Ah, what it is to be old and represented by well organized societies and have 99% turn out on election day – nobody will ever cut your entitlements.

    Comment by Anonymous — August 9, 2010 @ 9:21 pm

  14. Yes we do need to do something about super. But I agree with Tom M. Means testing on super would discourage saving, and our saving is dire enough as it is.

    Also, wouldn’t the bureaucracy involved in accurate means-testing be quite expensive? Especially when those crafty old people have hidden their wealth all over the place.

    Comment by Will Truth — August 9, 2010 @ 9:25 pm

  15. “Seems like there might be room for efficiency gains there, don’tcha think?”

    Yep true enough despite the fact that at 65 you’ve made your contribution to the tax system while someone on the DPB has drawn from it and has years of working life ahead of them given the right incentives.

    Do you understand this distinction?

    Comment by The other JD — August 9, 2010 @ 9:57 pm

  16. If you make Kiwisaver compulsory, then means test superannuation against a person’s Kiwisaver balance, there is no disincentive to save. People can still save above the amount through other vehicles. There’d be some wealthy people who manage to minimize their income and their Kiwisavings, thus still qualifying for super, but not too many.

    Comment by Nick — August 9, 2010 @ 10:38 pm

  17. Is it greed that makes the likes of fat, greedy old men, say someone like Johnathon Hunt demand the pension that they are “entitled to” ????.

    Because Welfare should be about need not greed.

    Solo parents often NEED help to live and raise their children.

    Those old rich pricks and prickess’s want their pensions because of ……….. greed.

    Need, greed ……….. understand the distinction jd?

    Or do you just have the greedys harsh understanding of the needy ……… aka the natianal partys welfare policy.

    Lets mine their children

    Comment by nznative — August 9, 2010 @ 10:40 pm

  18. The problem is that means-testing super is an effective tax on saving, at least if you do it based on assets. Surely if there’s anything we don’t want to tax it’s saving.
    Partly agreed but price to pay I think.
    CFs approach is a pretty clean way to minimise the impact of that and I honestly don’t believe people are so minutely attuned to the magical incentive that they’ll completely choose not to save because the taxpayer will help pay for some of it later if you don’t. And compulsory Kiwisaver removes a lot of the ability to negatively respond in that way anyway

    Comment by garethw — August 9, 2010 @ 10:42 pm

  19. Good to see you back native, just when you scuttled out of Tumeke with your tail between your legs look who turns up.

    Comment by The other JD — August 9, 2010 @ 11:15 pm

  20. Most of us in Gen X, Y etc realise there ain’t gonna be much in the way of Super by the time we retire. It’d be nice for the gummint to have a compulsory scheme up and running with plenty of time to spare – otherwise a fair few of us will be sponging off the grandkids, or begging in the streets 🙂

    Comment by gazzaj — August 9, 2010 @ 11:19 pm

  21. How far would $50 go gazza?

    Comment by davy crockett — August 9, 2010 @ 11:40 pm

  22. After the Great Inflation of 2012-14? $50 will probly get you a cup of coffee.

    Comment by gazzaj — August 9, 2010 @ 11:50 pm

  23. Once that inflation hits your savings I’m sure you’ll up that offer big boy.

    Comment by davy crockett — August 10, 2010 @ 12:00 am

  24. The wedge of “Other” will bankrupt us. Don’t say you weren’t warned.

    Comment by Conor — August 10, 2010 @ 11:09 am

  25. Davy, give me a call and we can talk further.

    Gotta warn ya though, any domestic benefits you receive will be super but may cause sickness.

    Comment by gazzaj — August 10, 2010 @ 1:00 pm

  26. Make the eligibility age for super 67 by 2015 and have it be means tested, meaning that if you own anything other than a primary residence worth $300,000 and have more than $20,000 in other investments, then you’re on your own until the surplus is spent. Also I reckon that the elderly could benefit from living with their adult children. Whatever happened to the situation where most elderly were women that lived in units at the back of their children’s properties? Whatever happened to the big old cliche family home where the Matriarch or Patriarch would own most of it and live there comfortable for the rest of their lives, while their children and grandchildren also lived there and the children owned a part of it too?

    As for Domestic Purposes Benefits, I am personally against people being paid to bring up their children. If they are working, then a slight hand-up from the Government wouldn’t bug me, but a culture that we currently have where people go from unemployment to sickness to domestic purposes solely because it’s meant to make the Government’s figures look better and because it brings in more taxpayer’s income when you’re on the DPB, does not for a stable and sustainable economy make.

    Comment by Liam — August 10, 2010 @ 2:00 pm

  27. I forwarded the graph around to a few colleagues. Got this response back from one, who is far smarter than me and, probably, far smarter than any of you…

    [Danyl] is somewhat unfair to the Welfare Working Group. I read the report last night: not once does it even raise the issue of whether solo parents “really need” assistance. What it does point out is that we have among the most generous DPB type arrangements in the OECD, one of the lowest labour force participation rates of solo parents among OECD countries, and the least demanding work test. It also points out that work is the best, most reliable, path for most people to find long-term financial security.

    Comment by Phil — August 10, 2010 @ 2:09 pm

  28. If we paid a basic income to everyone we wouldn’t need this tussle of welfare, WFF, DPB, superannuation and gold card subsidies. Everybody would be free to work as much or as little as they wish all through their lives without having to fall through the cracks or be penalised with 98% effective tax rates as your benefit abates when taking up work. A more progressive tax system beyond your basic income should finance the lot.

    Comment by Uroskin — August 10, 2010 @ 2:44 pm

  29. Uroskin, what you say would make sense if New Zealand wasn’t a country of reactionary bigots.

    Comment by georgedarroch — August 10, 2010 @ 2:51 pm

  30. Liam, very few people spend their life on welfare. Many recipients of the DPB (for example) are only on it for a couple of years, getting back on their feet after a relationship break-up. The problem with this debate is that people like you pick on the small% of bludgers and assume everyone falls into that category, advocating reform because of a minority.

    I can tell you, after 2.5 years on the DBP, I was itching to get off it. Try doing your budget for the equivalent of the DPB – anyone who thinks that is a good way to live has very very low expectations indeed.

    As for extended families, nice, but given the number of people with just one child or no children, or whose children have left for Australia, not really practical to consider it as a policy response! Unless you are going to pay people to have more children…

    Comment by Me — August 10, 2010 @ 3:09 pm

  31. Uroskin, pay everyone a basic income? Like Gareth Morgan suggested? Nah, Danyl for one is agin it, the reactionary bigot (according to georgedarroch, not me).

    Me @ 30, I take it you weren’t getting $723 a week in the hand like that woman recently in the news?

    Comment by Clunking Fist — August 10, 2010 @ 6:22 pm

  32. oh dear jd’s made a delusional comment about me which has nothing to do with the thread,

    Nasty and greedy it seems.

    Anyways, The new nats are just the same as the old nats and its bash the benny time people.

    How do the greedy’s think children of solo parents feel when all this bile and resentment gets focused on their parents and by default them ??? .

    Thats part of what makes natioanl ‘plain evil’ as opposed to labours ‘bad and rotten’ condition.

    They are extremley divisive and raise levels of anger and aggression in society.

    We’re a little bit meaner as a country every time they are in power.

    they set the tone .

    Comment by nznative — August 10, 2010 @ 11:45 pm

  33. “They are extremley divisive and raise levels of anger and aggression in society.”

    LOL Well at least you’ve stopped making virulently anti-semitic remarks about John Key’s jewish heritage so maybe those anger management course did some good. Were they by court order or did you take them on your own initiative?

    Comment by The other JD — August 10, 2010 @ 11:58 pm

  34. poor jd …………………. I stopped commenting at Tumeke because it got boreing.

    Thanks for letting me know I made such a strong impression on you.

    I cant remember you from a bar of soap ……………

    John Key is a greedy natianal man who presides over a party that steals from pre-schoolers and poor New zealanders to give to greedy men and women much like himself.

    He presides over a party who will use a recession to go after and punish the children of beneficarys.

    Nice greedy man is our john key.

    and the new nats are just the same as the old nats.

    I’m surpised they havn’t offered clint rickards his old job back …………..

    Comment by nznative — August 11, 2010 @ 8:58 am

  35. “John Key is a greedy natianal man who presides over a party that steals from pre-schoolers…”

    And he eats them as well.

    “Thanks for letting me know I made such a strong impression on you.”

    Encounters with the mentally ill jew haters usually do.

    Comment by The other JD — August 11, 2010 @ 12:19 pm

  36. Clunking Fist @31, no I got a little over $300 a week after tax, on the taxpayer. I also got $100 a week after tax from working part time, above board. And $100 a week in undeclared income (the only way I could balance my budget).

    That was 6 years ago.

    My case worker at WINZ couldn’t balance my budget, despite trying to find me every entitlement I qualified for. I did away with everything that wasn’t totally necessary. For example, I cancelled my life insurance ($22 a month) but that didn’t make up the $100 a week deficit. So her advice? Work under the table.

    Despite this, when I left the benefit system for paid employment I was many thousands in debt compared to when I went on it. Thanks to the extra qualification I gained while at home with pre-schoolers (you know, being lazy on the DPB, living it up) I now earn a good income and pay the top tax rate.

    Probably a good investment for the tax base of NZ.

    Comment by Me — August 11, 2010 @ 1:06 pm

  37. Me, I guess you see why so many solos (allegedly) have more kids: you’re at home with one, why not be at home with 3 on the income it produces? Sure, it’s a little more food, but not necessarily any more rent or a bigger car required.
    (Don’t worry, I do not believe this: the rort comes when a new man comes along, and, hey presto, the DPB continues to be paid.)

    Comment by Clunking Fist — August 11, 2010 @ 2:42 pm

  38. Yes of course. The DPB is such an attractive lifestyle option that it turns decent women into contraception-avoiding whores. That’s why welfare is evil.

    Comment by Me — August 11, 2010 @ 3:40 pm

  39. Now I’ not on to suggest that John Keys soul is as corrupt as Gerry Brownlees body.

    But New Zealanders are starting to see his stale smile and thin platitudes are a poor trade for the nasty actions of his government

    Smiling while your victimizing people is quite charmless

    But then he is a very effluent man ……… supposedly one of the most effluent prime ministers this country’s ever had.

    His cycle way idea was a stroke of genius and one day it will link up all the new boot camps full of the children from dem breedin solo parents .

    He does care and he’s prepeared to put his balls on the line …………. that why he had a vasectomy

    When his Govt talks about making cuts he’s walkin the talk

    Comment by nznative — August 12, 2010 @ 1:13 am

  40. “He does care and he’s prepeared to put his balls on the line …………. that why he had a vasectomy”

    Maybe you should follow his lead native. It would do our mighty nation an invaluable service to prevent individuals of a degenerate genetic disposition from reproducing.

    Comment by The other JD — August 12, 2010 @ 11:24 am

  41. @the other JD: “It would do our mighty nation an invaluable service to prevent individuals of a degenerate genetic disposition from reproducing.”

    Did you mean “Untermensch”?

    Comment by DeepRed — August 13, 2010 @ 1:30 am

  42. 2nds DeepRed.
    The move from accusations of antisemitism to propoising eugenics was impressively subtle. Should have seen it coming with the bashing of mental illness earlier comment 35, and later).

    Comment by R. Ross Sélavy — September 25, 2010 @ 8:53 pm

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