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Free Press - ACT's Regular Bulletin - Dec 11

Free Press - ACT's Regular Bulletin

Child Neglect (Poverty)
The Prime Minister has staked her job on child neglect but what isn’t measured isn’t managed. How she will measure it is now career defining. Will it be a cop out, or will she do something that would give the average National minister palpitations and set a bold and measurable target?

The Cop-out option
The real cop out was National’s when they said it child poverty couldn’t be measured, or worse, could be ‘measured in lots of ways.’ It reminds us of the old Groucho Marx quote, if you don’t like my principles, I have others. But if you are serious about measuring poverty it’s quite technical. Our new Prime Minister has just given the field of poverty measurement an unexpected exposure.

A Political Exercise
Actually, measuring poverty has always been political. We just haven’t noticed it because the left have won so easily. Basically, if you are a socialist you’ll want to measure poverty 1) relative to other people, 2) by income, and 3) by snapshots in time. Those of us on the sensible side of politics prefer to measure it in absolute terms, by consumption, and over time.

Income vs. Consumption
Socialists love to measure poverty by income because Robin Hood can fix it easily. Just tax the rich and give their money to the poor! Income measures miss people living off savings, so they always count more people in ‘poverty’ than there actually are. More importantly they miss how people spend their money, so a thrifty person who lives well within their means might be in ‘poverty’ but a decadent person would be measured as fine. Measuring what people consume instead of what they receive eliminates these problems.

Absolute vs. Relative
Socialists love relative measures of poverty, such as ‘you are in poverty if you earn less than 60 per cent of the average.’ The only way to fix poverty on a relative measure is to make everyone equal. If your idea of poverty is based on relative measures then everyone’s income could double and ‘poverty’ would stay the same. More sensible is agreeing a minimum basket of goods people should have access to regardless of how well others may do.

Snapshot vs Long Term
Socialists love to take a snapshot in time to measure poverty. More sensible people like to measure people over several years, because they find two types of people. People who really do have a rough time year after year, and people who are in poverty for a period of time, between jobs for example, but generally don’t have a problem. If you measure a snapshot in time they get mixed up. If you track individuals over time you get a measure of who is facing chronic difficulty and who is having a bad year.

Example I –The Povo Bachelor
Imagine a young man, 30 years old, with only no income for almost a year. By the leftie measurements, this guy is in poverty. His income is far below 60 per cent of the average at the time of the snapshot as he has none. The Government must give him more money! If you ask a few questions you’ll find he was running for parliament, well housed by friends and family at some pretty decent addresses, and, thanks to savings (which a longer-term view of income would have suggested) was able to make a pretty decent assault on the 2014 Bluff Oyster season. A consumption-based measure would avoid this nonsense.

Example II –The Adequately Funded Child Neglectors
Imagine a family that received nearly $1,000 per week in benefits and supplements, but managed to blow almost all of it on hire purchases, tobacco, and alcohol, leaving only a few dollars left for McDonalds, which they puree for the younger children, and soft drinks, which they buy in place of tooth brushes. By absolute consumption, these guys are in poverty and the children are neglected, but their income is above 60 per cent of the average.

So How Would You Do It?
If the Prime Minister is serious about measuring child poverty she’ll do it like this: Have a division of Statistics New Zealand (the specialists we all pay to do statistical things) to track a significant number of children, perhaps 200 born each year from birth to age 18. Statistics NZ should never reveal the identities of these kids to any other department. They should interview the families and children twice per year to measure their actual consumption of food, housing, clothing, and education.

Can’t Just Tax and Spend
This measure would be a measure of child neglect. The question would be whether kids get the necessaries of life and an education for a future. It would require the Government to fix actual problems instead of taxing and spending. They would have to work out why it’s so hard to build homes right now. They’d have to consider ACT’s policies of cashless welfare that mean benefits can only be spent on certain things using electronic cards. They’d have to consider why so many kids drop out and stop going to State Schools (but keep going to ACT’s Partnership Schools). They’d have to start talking about personal responsibility and quality state services.

Not Holding Our Breath
The Prime Minister’s commitment to measuring child neglect is a noble one. However, we are afraid her measure will be a relative, income based, snapshot measure of child poverty where the only solution is to tax and spend more where child neglect goes unchecked.

© Scoop Media

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