John Key has dug his toes in as he refuses to listen to some of the expert advice on poverty reduction, but more interesting is where he's indicating he will move

You'd hardly call it skin on the skeleton, but John Key's comments today about his plans to tackle child poverty and sell-off state housing at least put some sinew and muscle on the bare bone rhetoric he has been using since his win in last month's election.

John Key is a Prime Minister at the top of his game and the peak of his powers. After a hard, unpredictable and nasty campaign during which he was unusually off-balance and at times dishonest (especially the days immediately after Dirty Politics was released), he is looking fresher and more confident, and since election night he's hardly put a foot wrong.

Every word since winning his third term has been in aid of winning a historic fourth; he's been notably humble, inclusive and has used his political capital not to move further to the right, as some predicted, but to extend his hold on the centre (a little to the left and a little to the right).

You can see that in two policy priorities he's identified: selling off state housing and taking more decisive action to tackle poverty.

In the campaign he said he was proud of his government's record on child poverty. He, Paula Bennett, Bill English and others have spent years refusing to measure poverty, disputing figures, generally trying to say 'nothing to see here'. What Key seems to have heard on the campaign trail is that many New Zealanders are genuinely concerned at what's happening to our poorest neighbours and he's hinted enough now at serious action that he's committed to more than a token approach to the issue.

This morning on The Nation he still ruled out raising benefit levels and extending the in-work tax credit to families living on a benefit, depsite all the serious experts in the field insisting those were two essential moves. Key likes to say that the gap between life on a benefit and life in work must be maintained. The problem with that argument is two-fold.

First, Jonathan Boston, the man who literally wrote the book on the subject, has done the numbers and says that the gap between those in work and those on a benefit has increased 25 percent in a generation. Remember when Ruth Richardson and Jenny Shipley cut benefits with exactly that justification? Well the gap has increased by a quarter since then, as wages have risen and benefits have only kept pace with inflation.

So if the gap then was wide enough for Shipley and co, why does it need to be 25 percent bigger to incentivise people into work? The fact is it doesn't and the benefits are too low for a family to live on. An increase is due.

Second, two out of five families in poverty are also in work. So simply getting into work is not in and of itself a path out of poverty. Sure, it's a start. But possibly only the start of a very long path -- and poor kids need help today, not in a few years. Wait those few years for their parents to work their way up the ladder and you're missing out on crucial opportunities for them to get on a healthier, smarter, more aspirational path.

So the truth is that both benefits and wages are too low and more direct, immediate action is required. It's a tough political choice, but the evidence is pretty clear.

Having made that criticism of what Key won't do, it's interesting to look at where he does seem willing to act. Two big hints came out of today's interview. First, housing costs for the very poor. He said "we need to address" the fact that so many poor families are paying too much for their housing. Given most of them don't own their own home, that means some sort of rent relief or accommodation support. (Given English has identified the accommodation supplement in the past as a huge suck on government funds and a bit of a rort for landlords, that's unlikely to be the mechanism).

Two, he said:

"...there might be ways we could put more money directly into those youngsters and make sure it actually reaches those youngsters and isn't just part of an overall pot which delivers a certain level of support”.

That seems to be a quest to get past putting money into the pockets of the mums and dads, and more directly into the needs of kids. Maybe childcare programmes? Maybe exam and study fees? They certainly would fit within National's ideological fences, as they are helping kids help themselves. He won't be precise, but the hints are there.

As for the sell-off of state housing, he played down the figure of $5b used extensively this week. This is a policy that gives some red meat to the base; it's a form of old-fashioned privatisation. But one of his problems is that the last time he sold around $5b of state assets (the power companies) he often leant on the fact he had a mandate from voters. But National said nothing about ramping up its state house sales in this past campaign, so he cannot make claim now.

It looks sneaky and even tricky.

What's more he won't commit to spending the money made from any sales on new houses. But here's an interesting point. What he did say was that "they key test of the policy is to increase the overall level of housing". So if there aren't more social houses as a result of this sell-off, he will have failed.

There's obviously more work to be done on these issues, but we're starting to see a an outline emerging. The question now is will it be a functioning body of work or little more than a rhetorical straw man?

Comments (13)

by Cushla McKinney on October 12, 2014
Cushla McKinney

That seems to be a quest to get past putting money into the pockets of the mums and dads, and more directly into the needs of kids. Maybe childcare programmes? Maybe exam and study fees?


Or vouchers similar to those intriduced for young beneficiaries? After all we can't trust those 'bad' parents to make responsible decisions by themselves...

by M Ducat on October 12, 2014
M Ducat

Really glad you pointed out Key did not mention state house sell-offs in the election. At the moment it looks like more privatisation of public assets.

 

by Peggy Klimenko on October 13, 2014
Peggy Klimenko

"So the truth is that both benefits and wages are too low and more direct, immediate action is required. It's a tough political choice, but the evidence is pretty clear."

It's pretty clear, right enough: if workers can't manage on the minimum wage, it's surely impossible to live on the benefit. And it's unequivocally true that if benefits - and the minimum wage - were increased in line with the amounts recommended by the experts to whom the PM doesn't want to listen, much of the problem of child poverty would disappear. Of course throwing money at the problem would help! That neither the Key nor the Clark governments have done it is because ideology has constrained them.

Child poverty nowadays is blamed on "bad parenting", this being a part of the "blame-the-poor-for-their-poverty narrative, which has taken hold here since the benefit cuts of 1991. This attitude is similar to that of the upper classes in Victorian England, and of the early eugenicists. But poor parents care just as much for their children as do the comfortable middle classes, and for all but a vanishing small number, any extra money that comes their way is directed to their children.

So now, in pursuit of ideology, the government proposes to sell off state houses - a policy on which it didn't campaign and can't therefore claim to have a mandate - with the vague idea that this will somehow help the poor with their housing difficulties. How exactly selling such houses to social agencies will benefit the most needy has yet to be explained.

Further, the government proposes a reductio ad absurdum social policy: direct services to the children by some as yet unarticulated means and, in effect, bypass the parents. All the programmes of this sort that we've seen thus far are a form of handout; they don't help with the basic problem of not enough money. But they're sure effective at humiliating parents living a hardscrabble existence.

For heaven's sake! The government should just raise benefit levels in the first instance; give beneficiaries at least the dignity of enough to live on. And then move to raise the minimum wage. Some courage on the PM's part would be great to see.

by Alex Stone on October 13, 2014
Alex Stone

Good day Time -

Thnak you for your (mostly) well-reasoned post on John Key's approach to child poverty.

I was nonplussed however, how you were able to juxtapose these two comments in a single paragraph:

- "a Prime Minister at the top of his game and the peak of his powers."

- "campaign during which he was unusually off-balance and at times dishonest"

How is it that we (the electorate, the mainstream media - even commentators as astute as you) are able to praise our Prime Minister, while at the same time conceding he is dishonest.

Whether we like it or not, we are in relationship with out political leaders: they depend on us to elect them, we depend on them to govern in the best interest of ourselves, and our fellow citizens. So how did we end up with a relationship where there is contant lying from the one side? Where does this take us?

Alex Stone

 

by Charlie on October 13, 2014
Charlie

The fact is it doesn't and the benefits are too low for a family to live on

Yet surprisingly they seem to manage to!

Most of those families in poverty were in the same condition when Labour was in power and thus the voters saw through whole charade of 'child poverty'.



by Peggy Klimenko on October 13, 2014
Peggy Klimenko

@ Charlie: "Yet surprisingly they seem to manage to!"

No, they don't. That's why we have the current levels of child poverty. I wonder if you've had a look at the rates paid for the Jobseekers Benefit (paid to pretty much everyone now, in place of a whole raft of benefits which used to exist). No wonder people can't manage. Then there are the working poor, whose income doesn't stretch to cover essentials. Such people are now the core patrons of food banks. I invite you to try living on the benefit - or just on National Superannuation, come to that. Although, in order to really understand what it's like, it's necessary to do it for a reasonable period of time: 6 months, say. And you'd have to refrain from accessing your savings: by and large, beneficiaries don't have any.

"Most of those families in poverty were in the same condition when Labour was in power and thus the voters saw through whole charade of 'child poverty'."

Well of course they were. When Labour came to power in 1999, most people who voted them in expected them to reverse the 1991 benefit cuts, which had caused so much hardship even by then. But, in thrall to the same ideology as National, Labour failed to do it. So now we have the results of over 2 decades of inadequate benefit levels and low wages: entrenched poverty, and all the consequences of that.

by Charlie on October 14, 2014
Charlie

Peggy:

1/ The definition of 'poverty' widely held by the Left doesn't stand close scrutiny. It's a statistical nonsense. I can provide details if you wish.

2/ There is no such thing as 'Child Poverty'. It's a term fairly recently invented by the Left to try and make middle class people feel guilty and vote for them. Children generally don't have money and are not employed.

3/ There may indeed be children within families which are are 'poor' by some definition of 'poor' that makes sense, but I'll bet that scrutiny of those families expenses will show most are making poor financial choices with their limited funds. Thus they need support and education rather than just more of the taxpayers cash.

4/ Those same families were likely around during the Clark years when both housing and food prices rose faster than they are at present, yet nobody on the Left seemed to notice. Don't you find this strange?

 

by Peggy Klimenko on October 15, 2014
Peggy Klimenko

@ Charlie

"1/ The definition of 'poverty' widely held by the Left doesn't stand close scrutiny. It's a statistical nonsense. I can provide details if you wish."

Go ahead. I'll be interested to see what you've got.

"2/ There is no such thing as 'Child Poverty'. It's a term fairly recently invented by the Left to try and make middle class people feel guilty and vote for them. Children generally don't have money and are not employed."

I'm sure that the poor children of New Zealand will be delighted to hear this.

3/ ".....I'll bet that scrutiny of those families expenses will show most are making poor financial choices with their limited funds. Thus they need support and education rather than just more of the taxpayers cash."

A bracing bit of re-education, eh? Character-building, that's what it is. Just like poverty itself. I note that you say "most...making poor....choices"; so: not everybody, then. Which supports the view that benefits are too low. And what of the working poor?This belief that poverty is the fault of the poor themselves has had a resurgence in the last couple of decades or so, but it isn't new: the Victorians'd recognise it. Blaming the poor absolves wider society from any responsibility for the situation, and from doing anything pointful to rectify it.

"4/ Those same families were likely around during the Clark years when both housing and food prices rose faster than they are at present, yet nobody on the Left seemed to notice. Don't you find this strange?"

Er....what? Have you forgotten Closing the Gaps, Working for Families, increases in the minimum wage, employment law changes, indexing state pensions to wages, restoring income-related rents for state houses, tax credit changes, annual inflation to benefits restored? And a number of other measures aimed at helping poor families. There surely was notice taken, especially of child poverty; if I remember rightly, it was that issue that prodded the government into introducing Working for Families in particular. I suspect that you've forgotten - or don't know - just how tough things had got for the poor during the 1990s.

The people I've known who hold blame-the-poor views have never lived in poverty, so they have not the least idea what it's like. They usually quote the Kahui family, and other anecdotes of that sort, to support their view. But I reiterate: go look at the Jobseeker benefit rates, and try living on that amount for 6 months or so, without recourse to your savings. I'm sure you'll find it character-building.

by Charlie on October 15, 2014
Charlie

Peggy: The typical definition of poverty being touted by the Left is having an income less than 50% or 60% (depends who you listen to) of the median disposable income.

A couple of hypothetical examples to show how flawed this approach is:

1/ The country dicovers oil and the incomes of engineers, scientists and various other skilled workers in NZ increases. This lifts the median income and so the threshold for poverty rises as a percentage. Thus more people become 'poor' because the country grew its economy. 

2/ A left wing government enters office and increases the marginal tax rate. The consequence is that the average disposal income drops for those paying in the higher tax bracket. So according to your measure thuosands of families are, by magic,  uplifted out of poverty!

2/ Bill Gates retires and moves himself and his family to NZ. As we all know, Gates' annnual income is in the millions. This one person is so rich it lifts the median disposable income for NZ. This lifts the threshold under which people are defined as 'poor' and so more people become 'poor' because one rich person has arrived in NZ.

I hope these examples have illustrated the point for you.

I'm not "blaming the poor" I just saying many know no better. There is no excuse for northland children to have a mouth full of rotting teeth by the age of ten. There is no excuse for the phyical abuse of children, poverty or no poverty. We have to break this cycle if we wish to improve the lives of future generations - and I don't see how handing out more cash is going to do that.

(Oh and by the way, I grew up in poverty and used the education system to uplift myself. My moher didn't smoke nor drank alcohol. We never ate take-out nor soft drinks. We had no car and no phone. But we always had food on the table, I brushed my teeth twice a day, did my homework every night and the house was always clean. I did odd-jobs at the weekend to make ends meet. So I'm the poster boy - I'm exactly the person you need to listen to)

 

 

 

by Peggy Klimenko on October 15, 2014
Peggy Klimenko

@ Charlie: your description of your upbringing mirrors my own! So in my view, I also qualify as someone to whom others should listen....

With regard to definitions of poverty, I've seen a lot of criticism of currently-used measures - including from that sector you refer to as "the Left". I think that Mr. Mcawber's observation serves quite well here; income needs to be high enough to cover the essentials, with a bit left over for contingencies. I doubt even the most sanguine person could say that about the Jobseekers benefit.

"There is no excuse for northland children to have a mouth full of rotting teeth by the age of ten."

Funny you should mention that; I do know a bit about this subject, as it happens - although it's many years since I worked in the field. But some things don't change. Tooth decay prevalence tracks income: it drops in high-income areas, rises in low-income areas. It's influenced by water fluoridation, which smoothes out the differences in decay rates between the poor and the better-off. Many years ago, in areas without water fluoridation, tooth decay rates weren't necessarily markedly different between low and high socio-economic groups. I can't comment on the current situation, though I believe that Northland isn't served by fluoridated water supplies. And I also understand that income levels are very low there.

Here's the thing, though: it costs money to maintain good oral hygiene. Back to income levels again: when there are left-field demands on the budget, something may have to give, and that may be food, never mind toothbrushes and toothpaste (and floss). In any event, keeping Bertie Germ at bay is a complex enterprise, aspects of which aren't always under the individual's control. Were it as simple as cleaning one's teeth and good diet, there would theoretically be no tooth decay in the leafy suburbs. Last I looked, that isn't the case.

"There is no excuse for the phyical abuse of children, poverty or no poverty."

I couldn't agree more. But the poor haven't cornered the market in family violence, even if we tend to hear about it more when it occurs in that sector of society. And it isn't worse when it happens in poor families as opposed to well-off families.

Whatever we might think about poverty levels in NZ, one thing is certain: it isn't children's fault. They're the ones differentially affected by lack of access to adequate income. We need to be doing better by them.

by Eliza on October 15, 2014
Eliza

Charlie - median and mean are different things. Median is the midpoint income. Your examples would affect mean income, not median income.

by Charlie on October 15, 2014
Charlie

Peggy:

On rotting teeth: I suppose flouride is a part of the picture but feeding small children (even babies, via a bottle) an almost endless supply of acidic soft drink, sweets and not supervising teeth cleaning at bedtime pretty much guarantees bad teeth in short order. This is nothing new:

http://www.stuff.co.nz/dominion-post/news/9177309/Parental-neglect-of-ki...

http://tvnz.co.nz/content/32280/425826/article.html

Is this due to willful neglect or plain ignorance?

This is just one small facet of a major parenting problem (not necessarily a poverty problem. As you correctly point out, neglect and abuse are not confined to beneficiaries or even the low paid. ).

The results from longitudinal studies both here and overseas show that 'early intervention' is the key to being resolving the problem. To the extent that I'm told it is now the mantra of the MSD.

Thus passively handing out cash is definitely not the answer. Along with the financial support must come education, counselling, supervision & intervention.

 

 

 

by Peggy Klimenko on October 15, 2014
Peggy Klimenko

@ Charlie: " .....feeding small children (even babies, via a bottle) an almost endless supply of acidic soft drink, sweets and not supervising teeth cleaning at bedtime pretty much guarantees bad teeth in short order."

Is this due to willful neglect or plain ignorance?

Ignorance, I'm afraid, along with dubious parenting practices passed down through families. I saw similar damage many years ago, where children were breastfed until 3-4 years of age, and allowed to "graze" at night. Not pretty; but, as you say, not a poverty problem. Or not especially a poverty problem. In my experience, parents want the best for their children; nobody sets out deliberately to damage their child's teeth.

But, given that we aren't born knowing what to do for our children's health, I'd have expected that health workers who see pregnant women would talk about nutrition and the need to be sparing with sugar and sugary drinks. I do hope that's happening: it's the preventive stuff - what you've termed "early intervention" - that's critically important for child health.

'Thus passively handing out cash is definitely not the answer. Along with the financial support must come education, counselling, supervision & intervention."

Because what's been discussed above isn't a priori a poverty issue, handing out cash isn't likely to influence that situation one way or the other. But in all other aspects of beneficiaries' lives, extra cash will make a huge difference. However, I certainly favour additional assistance in the form of health and parenting education and budget advice, for those who need it.  Along with the extra cash, of course.

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