Monday, December 10, 2012

Worried about child poverty? Well use your own money then

If ever there was a reason to close down the Office of the Children's Commissioner, it should be this report on child poverty (pdf).  It is the classic socialist/statist treatise on taking more money from some people to spend money on others.  Philosophically it takes the view that the people primarily responsible for children are not those who created them or have taken responsibility (typically by default) to care for them, but the state.  It's hardly surprising given that the Expert Advisory Group on Solutions to Child Poverty consists almost entirely of those who embrace a philosophical position of statism.

Let's take some of its key points:

Child Poverty is costly:  The counterfactual that children who are well fed, housed, taught and loved tend to thrive is true, but to claim that you can monetise "costs" that are born by society presumes that they are to be born by everyone.  Yes having children you cannot afford to feed, house or clothe restricts their likely opportunities and ability to thrive, but that isn't the fault of everyone else - it is the fault of the father and mother for breeding without thinking of the consequences.  The report claims that it "should not be tolerated".  Who by?  Is everyone who raises children in adequate conditions or does not raise children have to be obliged to bear the costs of those who do not take reasonable steps to prevent raising a child in poverty?  The claim is that child poverty affects the "nation's long-term prosperity", but all that really means is a presumption that government will tax everyone else's prosperity to pay for those who go on welfare because they have few saleable skills, those who commit crimes because they want the property of others or are angry at others, or who breed without concern for the consequences.  Maintaining that presumption denies the fundamental cultural shift needed to promote responsibility for the consequences of ones own actions.  That isn't promoted by the welfare state or the idea that all children are the responsibility of all adult.  They are not.

Child poverty can be reduced:  Yes, demonstrably, it has been happening for centuries.  It has been achieved through economic growth, and the growing amount of time that parents can dedicate to raising children.  That is not encouraged by a growing state demanding ever more taxes, restricting the supply of land for housing and so increasing the cost of living and the amount of work people must undertake to achieve their desired standard of living.  The main motivator for reducing child poverty has been parents who have strived hard to give their children a life better than their own.  Mine did that, countless others did, and they didn't do it because the state told them to do so, or handed them a cheque.  They did so because they were responsible and human.

Specific recommendations:  The overwhelming thrust of these measures is to treat children as a national asset that needs a national solution.  It wants universal benefits for children up to a certain aid, making all children rich or poor a source of income taken from taxpayers.  It wants taxpayer funded universal healthcare for children up to age 17.  It wants the state to build more houses.  It wants legislation to bind a Minister to targets that are primarily about what families, mothers, fathers and children do on the ground.  It is absurd and ridiculous to use law - an instrument which typically defines rights, mandates actions or prohibits them, to be necessary to hold a politician to what is a politically set policy goal.   It undermines democracy and clogs up the legal system with a law that is not fit for purpose.

It seeks to make every additional child worth the same amount of additional welfare from the state, promoting breeding for cash, a phenomenon that has hardly been a great success.   Why is it good for children for their parents to get more money from the state because they breed more?   It wants welfare benefits to grow according to GDP, in effect meaning welfare always looks like a reasonable option regardless of actual poverty levels.  

It wants the state to lend money at favourable terms to people in poverty seeking to get back into work, presumably because it doesn't think the public would support such a charity.

It wants a massive state intervention in housing to regulate rental housing, build more homes, but also subsidise low income people's mortgages.  The words "sub-prime" should come to mind, but then when middle income people struggle to save for deposits in Auckland and Wellington facing higher taxes to subsidise poor people in Timaru and Kaitaia buying houses, there might be some concern over equity.

Special money for Maori households to buy homes, because they are ethnically predisposed to not earn as much money as everyone else.   Nothing quite so readily breeds resentment as a pair of low income families and one getting special help because of who their ancestors were.  That's the nationalistic race based policy thinking, based on neo-Marxist structuralist theory (which means all Maori are disadvantaged and powerless, so the state must take from non-Maori to benefit Maori and "even the outcomes"), which simply does not reflect reality or responsibility.  

The reason more Maori are in poverty is overwhelmingly because they disproportionately make the wrong decisions in life, devaluing education, valuing whim, devaluing entrepreneurship and individual innovation, valuing "being one of the group" and valuing "not thinking you're better than the rest of us".  Giving them more money wont fix that.  Of course, this is a report that wants you to pay for "the development of Mäori-centric data that acknowledge and capture Mäori concepts of poverty and wealth".  Don't go there.

Having problems because you stupidly borrowed too much money?  Never fear, the state would bail you out if this recommendation was implemented:

We recommend that the government investigate and implement a public-private--partnership micro-financing model with the banking sector and community groups, with the aim of providing modest low-interest and zero-interest loans, as a mechanism to help low-income families access affordable credit and effectively manage debt.

How about promoting saving as a way of getting enough money to buy consumer goods and services, rather than tax everyone so that the least able can borrow more?

It wants a "child nutrition strategy" without saying what that really means, I think Sue Kedgley would love it, but those who want to promote personal responsibility will not.

It wants support for children with parents in prison to be increased, which isn't entirely silly, but doesn't for a moment suggest that the criminal justice system be reviewed to eliminate victimless crimes, such as drug laws, to reduce the rate of incarceration of parents who are relatively low risk offenders, nor does it blame parents when they have committed real crimes.


There are some worthy recommendations in this report, but it should be up to those who embrace it to raise the money themselves, voluntarily, and implement the measures, for only then will they have the incentives to get it right, to avoid people claiming inappropriately and have the moral authority to provide support given by those who want to support those less fortunate, rather than forcing people to do so.

However, the report's number one failing is its blatant disregard for the breakdown of family structures as being one of the key sources of poverty and abuse among children.  That has been sustained by the growth of the welfare state, and a cultural norm of responsibility for children not being primarily with parents but "society".   It is seen in the use of language that nationalises children, that treats all children in the country as being the responsibility of everyone else, but actually means that net taxpayers bear the cost and burden of raising the children of net beneficiaries.  It means that there are taxpayers who are earning money not only to raise their own children, but another parallel family.

The answer to child poverty is twofold.  One is economic growth, with more wealth, employment, opportunities for starting up business, to save money without it being devalued through inflation and to provide the legal and monetary environment to allow people to succeed.  The second is individual.  If you don't want children in poverty, don't have them when you are poor - contraception is cheap, and not difficult to obtain.  If you don't want other people's children to be in poverty, cough up, help out, give some of your own money, spend time with charities, use your imagination with other like minded people.  Do something directly.

One thing that wont help is this report, or the functionally inert Child Poverty Action Group - which has as its sole purpose, actually doing nothing substantive for child poverty, simply producing reports which demand the government take more money from taxpayers to pay the parents of children in poverty, because they are poor.

The philosophy behind this report has failed, it has been tried in one way or another for the last 40 years, to go this far would bankrupt the economy and chase enterpreneurial or aspirational people from New Zealand to elsewhere, further reducing the ability of the economy to catch up with the rest of the developed world.

However, the Greens will love it, because it buys into their "your child is everyone's child" nationalisation of children philosophy, and their admiration for a huge welfare state.  Now go to southern Europe to see what a roaring success that approach is proving to be.

Oh and New Zealand has had this sort of hand wringing, fiscally extravagant approach to social policy presented before.  The Royal Commission on Social Policy reported in 1988 wanting benefits and taxpayers' money for just about any group or individual identified as not having a "fair go".  The Lange Government to its credit ignored Rosslyn Noonan's post-modernist structuralist treatise on recreating a grand social welfare state, and it was called the most expensive door stop in history.

This report is shorter, and cheaper in real terms, but should have the same fate.


Barry said...

The first thing NZ should do is stop paying other people's money (ie tax that I've paid) to part-maoris and Pacific islanders to keep having kids they can't afford

thor42 said...

Excellent column, and spot-on!

Lindsay Mitchell said...

What can I say? You articulate the subject more than ably. I can tell you that the talkback thermometer says Wills' report is producing little warmth.

Anonymous said...

Great article, thank you!
The report, and government decisions, seem driven by the belief that it is your "god given" right to bred.
I often use the line that you need a licence to have a dog but anyone can have a baby. Not that I am advocating any more government involvement in our lives - just some personal responsibility.
Society should be holding people to account, not picking up after them.

Libertyscott said...

Barry so taxpayers should keep paying white trash parents to breed?

Why pick on races? It's vile and completely alienates all hard working Maori and Pacific Islanders who will now happily agree with the likes of the hard left who think anyone who doesn't follow their philosophy is "racist".

I'd be the last to say there isn't an endemic problem with welfare among those peoples, but if racism has never been an answer.

Barry said...

Liberty,I think don't pay anyone to breed. Also, the hardworking ones you mention shouldn't be alienated if they are not having more kids than they can afford. The reason I mentioned those two categories is that they are the ones that we get bombarded with as examples when the subject of "child poverty" is being reported on in the mainstream media.