CPAG Author Angrily Responds To PM's Criticism

From Dr David Craig, co author of the report.

It is the Prime Minister’s comments here which I would describe as ill considered. I would urge her to go back and engage with the body and substance of the report before throwing off this morning’s calculator fiddlings as a considered response. Accusations that our report is shoddy (never so far based on any particular point of error in any part of the report) are being all too freely made by the Prime Minister and her Ministers. These are cheap political shots, especially given the scholarly reputation for extreme care and caution in analysis my co-author Susan St John has garnered over decades, as the leading economic commentator on NZ social policy.

The figures the PM cites, increases in beneficiaries’ income under Working for Families of 3.9% in 2005 and by 8.1% by 2007 are (with caveats) broadly (and sadly) accurate. Drawn from the government’s own fact sheets, they represent the approximate actual dollar amounts beneficiaries will receive, in 2004 dollars. In dollar amounts they add up to around $9.50 per child from 2005, and another $10 per child from 2007. Since the package’s Family Support elements will not be inflation indexed until 2008, with inflation running at around 2-3% p.a, 3.9 % by 2005 and 8.1 % by 2007 will barely enable beneficiaries to maintain their current impoverished levels (let alone, as the report shows compensate for inflation losses since 1986, and especially in 1996, when beneficiaries were again left behind exacerbated by the 1996 Tax credit for working families).

In fact, for many benefit families there will be lower gains than these, as cuts to special benefits, currently given to the most marginal, literally cut in. These cuts were not foreshadowed in the budget case studies the Prime Minister’s calculating drew on. Some families, a small number but as many, by the government’s own calculations, as 1200 families, can literally expect only to be ‘no worse off’.

If maintaining penury is all beneficiaries can expect from a social democratic government in a time of booming national prosperity and low low unemployment, when we can put $2 billion aside for baby boom superannuitants, we all have very little cause for celebration.

We can celebrate many other achievements of this government, including the low unemployment and income related market rentals for state houses, and the shifts in income in favours of working poor families in the package itself. But this neglect is no basis for ignoring the substantive, carefully considered analysis in the body of the report, nor for ignoring urges to review the Working for Families Policy in the light of superior policies in Australia and the UK.

We urge readers to make up their own mind, by accessing and reading the report, online at http://www.cpag.org.nz.

ENDS

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