Widening income and living standard disparities

It is interesting to look at the amount of debate kicked up by the recent "overview of living standards" released by the MSD, in a different context.  The report highlighted how it is not the absolute income of a familial grouping that determines their final living standard, but is just as closely linked to the income sources and decision making of those familial groups in terms of their income disposal.

In that respect I would turn your analysis to the same debate, but using New Zealand and Australia as test subjects, rather than New Zealand family units.  In that respect I would point out that it is still the continuing wasteful monetary mind sets of both the New Zealand Government and general public that would doom us to a continuing relative decline in living standards, despite our recent closing of growth rates. 

Australia is currently in the process of implementing a change to their superannuation scheme such that wage / salary earners will be saving at the rate (opt-out) of 12% of their pre-tax income.  Even if they opt-out of the 12% rate they will still be saving a compulsory 8-9% pre-tax.  Contrast this to the New Zealand situation of 4% opt-out, an optional 8% opt-in, or a 0% if you would still like.  The wealth generation difference of the Australian situation running between 9% - 12% of their salary / wage income versus New Zealand's prospective 4% savings (household savings are still negative so the superannuation stands as the only incrementing savings pool) means that the Australian capital pool will be increasing at a rate of double to treble our own. 

Even most of New Zealand's financially illiterate citizens should be able to understand that if you start with a greater capital base, and then continue to add to that base faster than your comparative position, you will quickly and irrevocably be in an unassailable position.

Even more than fighting our internal issues of beneficiary entitlement mindsets, bloated local Government bodies and high child abuse rates, we need to realize as a country that we need to start building a wealth base.  Otherwise we will continue to lose on the living standards scales, and beyond not being able to support those other Pacific nations that depend on us, we won't even be able to support ourselves.
Tags: nz, newzealand, wealth, capital, investment

Maori kill 945 children

In the wonderful thinking of our current Government it is most important to tell every potential Maori by Television ad that they have the opportunity to register on a separatist roll.  The fact that around half of Maori continue to not want to register on this roll in itself would question the point of its existence.

But more importantly at present is the waste of a further 945 lives (ECU's) in the attempt to make this artifact of separatism more relevant.  Somehow it seems more important to play around with the demographics of our electorates to the point of 945 lives.  Please tell me why?
Tags: ECU, Maori, Maori roll, election

Everybody else just lives where they can afford to...

There seems to be this interesting philosophy that while people who work to survive must put up with living both:
a) in the locality of their job and
b) in housing that they can afford to
that beneficiaries are somehow above this.

Ngapuhi Social Services chief executive, Arapeta Hamilton, says many Maori families group together, especially in high-rent areas such as Auckland, because it is the only way they can survive.
This is definitely not the first time that I have seen these sentiments exhibited - in fact another example that comes to mind is:
"The woman living in the most expensive state house - on land valued at $1 million - had been there five years and said if the property was sold, she would have to be relocated in the same area." (NZ Herald - original article no longer available) 

A similar one could be:
"At a hastily arranged meeting days after the occupation, the then Ngati Whatua trust board, unwilling to call in police to deal with people who were essentially family members, offered the group houses in Glen Innes. The offer was rejected. "Like hell. I'm not going to give up a million-dollar view to look at railway tracks," says Anderson."  (NZ Herald - original article no longer available)

Can anyone give me a coherent argument why we should continue to support the idea of people living in housing that they cannot afford so that they can be in areas in which drug and alcohol abuse is high?  It is already a posit of the above situation that these people are not in this locality because of jobs...
Tags: nz, newzealand, benefits

Rates used to further extend welfare net by stealth

Hattip: NZ Herald
Hattip: Labour Party Mailer

The New Zealand Herald article today had an interesting quote from Mike Reid raised my ire over an issue that had already been sparked by a Labour Party communication we received mailed out to us this week (more on that in a moment....):
Local Government New Zealand spokesman Mike Reid questioned whether Mr Carter's list was truly random and said rates rises varied around the country.  The rates rebate scheme's new threshold meant rebates of up to $500 for people with incomes up to $20,000.  That was bigger than any of the rises, he said.

This shows the philosophy that is endemic throughout the Labour party - that they can just keep extending the welfare net upwards through society by increasing levies and taxes to the point where the general populace cannot sustain the payments, and must pay for them through levies and taxes from other people.  It needs to be recognized that it is not OK for rates and the like to be pushed upwards to levels at which those people still paying their rates must also start paying for everybody else's as well.  Especially when the rates levied in the first place are nothing to do with a user pays basis but are already a subsidization in and of themselves.

The Labour party mailer I received posted out to me earlier this week (yes - complete with parliamentary crest....) was already proudly proclaiming their increased rates rebates availability and that it would now be available to 350,000 households in comparison to the 4,500 households last year.  To me this is actually showing how incompetent the Labour Government in its governance of councils and their responsibilities has become.  Labour either need to endorse the method of using rates to fund local Government, or be honest (sic) and start funding these services directly from central taxation.

Which method would you prefer - or what assumption would you challenge?
Tags: nz, newzealand, rates, tax

Quote of the day

Hattip: Dilbert Blog
Scott Adams regularly makes my day.  But quotes that bring me close to snorting my morning coffee are worth sharing:

"And what’s up with the people who pray for material things? If you believe that God answers prayers for merchandise, it means the gap between the Almighty creator of the universe and Walmart is closing. God still has the lowest prices and widest selection, but how long can that last?"
Tags: dilbert, Scott Adams, humour

Inequalities of a tiered tax system

Tax return time always tends to refocus ones mind on the taxation system and its implications.  One that crystallized quite clearly for me this tax period was how the tiered tax system actually conspires against the poor to keep them in their place.

It is a counter-intuitive point but as one moves through the levels of the taxation system it becomes easier to do the "right" things with your money, investing more and delaying consumption, thus escalating the rate of wealth growth.  In addition you are better off doing the right thing by way of insurance etc so that the downside risks are also covered better than in a poorer household.

To demonstrate the partial point I will use the case of income protection insurance - something that most households know that they should have to some level, and yet those at most risk of the consequences tend not to have.
This is due to two compounding factors:
a) the cost of a given level of protection is higher for a low income worker
b) the level of Government subsidy is higher for a high income worker

The first is an understandable effect of the risk to the insurance company - but as long as the level of insurance is less than 80% of the original income actually tends not to be overly significant in the final calculation.  In a specific instance where I earn double what someone else does, but we have the same level of insurance cover the premiums only differ by 15%.  Most of that difference is due to them being a smoker - not the income disparity...

However where the big difference comes is that I can claim 39% (actually 51.5% - but I'll ignore the effects of GST registration for now) of my premium back from the Government.  My specific comparison can only claim 19% of their policy back.

And so the Government through a tiered tax system acts to encourage those low risk individuals to partake in behaviors beneficial to themselves; while those high risk individuals are left to cope with their bad habits on their own.

Can you define a single behavioral encouragement within a tiered tax system that actually encourages low wealth / income families into those behaviors that will ultimately benefit them?
Tags: nz, newzealand, tax, wealth, investment

Road Noise Testing

Hattip: Scoop

For once I actually agree not only with the intent of some new legislation, but mainly agree with the proposed implementation.  Harry Duynhoven has done well with his amendment to the Land Transport Rule: Vehicle Equipment 2004 to restrict the noise levels of vehicles.  Not only are they actually bringing clarity to what is a noisy vehicle by the setting of absolute decibel levels, but they are actually implementing a regime in which they can be tested in a meaningful and consistent manner (through the Warrant of Fitness testing process).

However there is one point that I think is missed in all of this - the lax enforcement of non-warranted vehicles on the road.  With the introduction of one more thing for an old / modified car to fail it will be interesting to see how much this already evident issue escalates.  This is without even considering the fact that the types of mechanics etc that actually perform these types of modifications etc in the first place actually have a vested interest in just telling their clients to come back to them for their WOF (wink, wink). 

Much like the issue with the micro-chipping of dogs the first issue that needs to be solved is the compliance and monitoring of the existing rules and regulations.  If we cannot even enforce those properly then what chance is there of the tighter regulations actually having the desired effect?  Or is this really just intended to be another way of funneling revenue into the Governments coffers anyway?
Tags: nz, newzealand, car, WOF

Deposits and Mortgages are not saving!

A few weeks back there was some feel good research published by the Westpac bank that purported to show that Aucklander's saving habits weren't as grim as thought.

In particular when this was reported by the MSM emphasis was placed on:
The independently conducted research shows that nearly half of Auckland savers claim to save regularly, with just under half aiming to increase their contributions to their nest eggs in the future. On average, the sample group were saving nearly 22% of their monthly income, but would ideally like to make this 32%.

Typically, more than a third of savers (35%) were salting away more money now than they were a year ago. What’s more, nearly 50% plan to increase their savings contributions over the next three months, compared with just 21% who plan to save less.

And from there the feel good wrapper was made.  However what really needed to be focused on was the target of these "savings": 18 – 35 saving mostly for mortgages and deposits, and the 55+ cohort for retirement.
First - it is disturbing that the main group saving for retirement was the 55+ age group, if this is when you start saving for your retirement you have big problems.  In fact whatever you salt away in the last 5 years or so of work is really going to have no appreciable effect on your retirement standard of living.
Secondly - and potentially more importantly - is the point that saving for a mortgage or deposit on a TV is not really "saving" in respects to the type of saving that New Zealand needs, it is avoiding a Hire Purchase Agreement.  While this is to be lauded - it is frequently better for us to delay buying something until we can actually afford it - it is not saving in terms of building wealth, and building the wealth store of the country.

That involves "saving" without a purpose - it involves building up your personal reserves without a spending target in goal, improving your asset and earning base.  The mind set that "saving" is something you do until you spend it is a major factor in New Zealand's continuing decline in OECD living standard comparisons, because we are never building our wealth on a permanent basis.  We may temporarily save - but only until we hit some benchmark that we can now buy that TeleVision / House / Holiday.  As a society we need to divorce our thinking that saving for the purpose of spending is a good start - but definitely not the end goal.

What proportion of your income do you actually save?  And what do you put away to buy things?
Tags: nz, newzealand, saving, finance

A new currently favourite author

Been in Melbourne for the first part of this week - which I will try and use as an excuse for my week-daily blogging dropping off (even though it has been a problem for a fraction longer than that...)
But despite this being a business based trip and therefore seeing very little of the city to which I was visiting there was one definite upside to the trip - I now have a new prodigious author that I can concentrate on devouring for a while.

The claim that he is a new favorite I suppose is a fraction strong - it will take a while before I would actually give anyone pride of place above Frank Herbert, Isaac Asimov and Dennis Wheatley; but having finished all of their works there is the issue that they cannot be my favorite author in terms of current reading.  It looks like Iain M. Banks with "The Algebraist" might have made himself that new author. 

When you can sit for two whole 4 hour flights reading non-stop both times you know someone has captured your imagination.  At the very least I would recommend this book to any one who passably likes Sci.Fi; and I'm sure I'll be able to update you on his other books soon ;-)
Tags: Iain M. Banks, The Algebraist, Iain Banks, books, recommend

So when is Maori not Maori?

Apparently whenever it comes to pointing out that their culture is currently also made up of patricide and welfare dependency.

In the wake of the (yet another) dead child tragedy the response of the (publicly vocal) Maori community has somewhat interested me.  It is always somewhat strange that Maori are fully willing to accept "responsibility" for the outcomes of their culture when it comes to the acceptance of more money.  Whether that be through targeted welfare, targeted scholarships, cultural donations etc.  And oddly enough even when that money is specifically being targeted because of Maori's over representation in crime and poverty statistics.  In fact the number of public outcries from Maori interest groups that more money needs to be poured into the Maori community to 'solve' these issues (and atone for past crimes against the Maori culture) tend to be unceasing.

And yet when a specific instance of how the current Maori culture is self-destructing itself is brought up in the media the calls from these same groups is that this is nothing to do with their being Maori, and this is a general societal problem that we must come together as a community to solve.

I just wonder whether they recognise their own hypocrisy in claiming that these issues are Maori specific and therefore they need more money to solve them (otherwise it would need to be spent on society not Maori) - but that the specific instances are nothing to do with being Maori at all?
Tags: nz, newzealand, Maori

It's the responsibility stupid!

Yet again we are subjected to reading about a highly preventable tragedy (NZ Herald: Drink-driver who hit teen jailed) if only our society could realise that a persons responsibilities take far more precedence than their "rights".

Now we have a teen who was hospitalised for 7 weeks, is lucky to be alive, must now live with a dental plate and has a torn liver.  All because our society / legal system supports the rights of the driver above their responsibilities.
Ostensibly we have it reported that a 3 year sentence handed to this driver sends a hard message about drink-driving - it does nothing of the sort.  If this was the drivers first offence, maybe.  But this driver was not only drunk, he was banned from driving.  To me that makes the severity as high (if not higher) than attempted murder.  This driver was intentionally using a deadly weapon for which he had no licence, and nearly killed someone.  The intent, and means were there - he should have to face the real consequences of his actions.

But furthermore it should never have got that far anyway.  That it took 4 drink driving offences before this mans licence was revoked is stupid beyond belief. Depending on severity maybe give a warning the first time, if you are very liberally minded maybe 2 warnings.  3rd time for that type of offence it should be gone.
But then the worst was to follow.  He was charged 4 times (yes, another 4) with breaching that ban - at least one of those with another drink driving offence.  Personally driving without a licence (especially if it has been revoked / disqualified) by itself is tantamount to using a deadly weapon without a license.  This is no different to going into a public area pointing over the heads of a crowd and discharging it.  Drink driving without a license is tantamount to attempted murder even if they didn't hit anyone.

And what is most sad is the number of cases exactly like this that we see every week - where someone is seriously injured or killed by a disqualified driver who has previously been caught driving while disqualified.  The use of deadly things like cars is a privilege, not a right, and breaching your responsibilities around that right needs to be taken very seriously;  if people cannot handle their responsibilities we need to start removing rights - and apparently we need to remove more rights than the responsibilities gave.  Then people might start understanding consequences.

Given that a disqualified driver is very likely to be impacting on your own right to live, what do you see as appropriate rights removal from them?
Tags: nz newzealand rights responsibilities

Inane post for the day

Yay - tomorrow is the shortest day of the year.  For some reason I always like the shortest day as it indicates the promise of the gradual improvement in daylight hours from that point forward.  The paradox that it indicates the coolest days of the year are still coming doesn't tend to phase me too much - especially as that cannot be guaranteed whereas the rate of change in the hours of our days is completely definable and measurable.

It is kind of depressing thinking about this though how much of a mathematicians mindset I have - especially in the area of calculus; I am obsessed with the tiny rates of change that make up our lives.  And worst I derive much of my pleasure from watching this infinitesimal changes more than I do the larger changes / events around them.
I can tell you what the current rate of change in our mortgage payments are faster than I could tell you my age.  Scarily I can actually tell you the acceleration (the rate of change in the rate of change) in our mortgage repayments - and I know how much we would have to be repaying per week for this to reach a 1c per repayment acceleration.

So while I am watching the changes in seconds of visible daylight that we start to enjoy again - what are you watching or waiting for?

An important question for New Zealand to ask itself

Hattip: Slashdot
"The controversial genius developer/writer/entertainer Paul Graham writes an insightful piece on Why Startups Condense in America. Here's the skinny: "The US allows immigration, it is a rich country, it is not (yet) a police state, the universities are better, you can fire people, work is less identified with employment, it is not too fussy, it has a large domestic market, it has venture funding, and it has dynamic typing for careers. Inquire for details within."
Given that New Zealand's future prosperity lies in capturing a healthy slice of the technology and finance wave, how do we compare on the above factors?  Should we be trying to capture the innovation of small startup firms, or looking to lure larger more established players?  Or do you disagree entirely and see New Zealand's GDP growing from other areas - if so what?
Tags: nz, new zealand, venture, entrepreneurship, finance, technology

New Zealand - Welcome to your world

Yesterday, more than any day in a long time, I got to feel like we were living in a second world country (I refuse to denigrate the plight of those in truly third world countries, despite that being the first term that comes to mind).
While we in Auckland got to experience another day without power, with the futile promises of TransPower that everything would be back within 2-3 hours, Wellington got cut off from the rest of the north island again - this time by a slick of vegetable oil across its single road out of town, and the South Island in general lost power and roading!

So what percentage of the country yesterday (people or geographical) actually had access to both power and mass transport?  It is a pretty sad situation when that answer drops out of the telco measure of triple 9's into what I would posit was well less than 80%. 

The first thing I think is important to reflect on is actually how well most of the country acted yesterday.  Oddly enough most people were cheerful, courteous and helpful.  My local bakery stayed open solely to act as an EFTPOS terminal for the Chemist and Fruit Store (they had no stock to sell so it wasn't for themselves) as they were probably one of the few places in Auckland that people could try and get their hands on that antiquated measure of currency - physical money.  Despite 300 traffic lights being out there were remarkably few crashes (and despite the occasional lunacy in driving habits).  It is a peculiarity of New Zealand that it seems to take "crises" like this to bring out our inner spirits again and show who we are and could be as a nation.

The second thing that is important to reflect on is how we have let our infrastructure stagnate to its present state.  Please note it is important to differentiate between stagnation and denigration. Successive Governments are to blame for this, of that there is no question in my mind.  However it is up to the present Government to actually do something about it, but do it in a way that does not penalize the current tax payers for their own shortcomings.  It is important not to focus on how this Labour Government has had 9 years to do something about improving infrastructure and has so far failed; just as it is important not to focus on how the previous National Government did not succeed in this area during its terms in office. What is important to focus on is that it is unacceptable for this situation to continue and the investment needs to come now and continue into the foreseeable future.

What were your experiences and thoughts from yesterday?
Tags: nz, new zealand, auckland, power, snow, wellington

A sad loss for Hamilton and New Zealand

When SSA Global announced in march last year that they were going to open an RFID center of excellence in Hamilton, it appeared that New Zealand had actually secured a real path towards becoming a high technology value partner in a worldwide core growth area.  For an economy that desperately needs to find more exports, and improve its labour productivity, RFID research and production could provide a huge boost.  Along with promising entrepreneurial startups like Sandtracker already providing some capability in this area a partnership into the ERP world would have provided a perfect lever into the marketplace for the full scope of this new realm.

Furthermore given that the agricultural industry still looks like the most likely to implement supply chain wide implementation of tags in a value-added relationship for all parties (despite Walmarts strong arming their suppliers into slap and ship tagging), New Zealand looked like a true contender with the appropriate partnerships and funding in place.

Unfortunatly SSA Global has recently announced that it is pulling out of the venture so these hopes may go unrealized.  I hope that Industry New Zealand, Hamilton City Council, WEL Energy Trust, Trust Waikato and B2H are able to find another partner of SSA's calibre to keep this proposal on some kind of track, as the potential rewards for New Zealand could be huge, and would represent more than just rhetoric in the progression of our economy towards a true technology based economy with the benefits of grounding in manufacturing as well as information exporting.

Personally this probably has more to do with SSA's acquisition of Baan Company and Baan products than the economic climate in New Zealand or the cited reasons of RFID cost / growth curves - but either way Hamilton and New Zealand are the losers.
Tags: RFID, nz, new zealand, SSA, Hamilton

Employment Grievance Lottery

Hattip: Scoop
There still seems to be a number of people in the community and political sphere that maintain that our employment dismissal laws are sufficient and clear.  However in the above article from scoop the following caught my eye:

“Hurt and humiliation awards ranged from one Member awarding an
average $8,933 with 62 per cent in favour of employees, while another Member awarded an average $2,150 with a 38 per cent in favour of employees.”

It may actually be used to argue both in the favour of employers having too much leniency or employees having too much protection - however I would just use this to show that the required procedures are too complicated and unclear. If even the judges trying the dismissal cases cannot seem to agree about the bounds of unfair dismissal to the tune of damages differing by a factor of 4, and a 24% difference in outcomes then both employee and employer cannot have any certainty in the process protecting their rights.  Both must feel some trepidation; the employer being worried if they can ever actually let someone go, and the employer whether they could be fired without justification.

Wayne Mapp's probationary employment bill will assist in this matter - but only by making the rules very clear for the first few months.  After that the employment relationship re-descends into the current mire, where neither side is 100% sure of where they stand.  I would see that we need to pass the probationary bill, and then move to make the whole process clearer and simpler for the entire employment period. 

What do you see as the current problems with the employment dismissal procedures?  And are they weighted too much in the employer or employees favour?
Tags: Wayne Mapp, employment, nz, new zealand, dismissal

IE Killer Feature for blogosphere addicts

I really wonder how many people that have the actual technical competence to install a program are still using Internet Explorer - but just in case there is I had to point out a little tool that I've started using that I now would hate to go without.

With an extension for Firefox (although you can use a bookmarklet in IE / Firefox / Opera / Other) it allows you to track your blog comments and, increasingly, the conversations around those. So from a centralised point you get to see both the conversations you have been commenting on - and the activity that has been occurring on those conversations. In context.
I have found this far better than RSS where you get overloaded, and feedburner / email updates etc where the conversations lose context very quickly.

At the very least even for blogs that don't send updates it manages the permalinks for you so you can return to those conversations that you were flaming recently and see if the troll has taken the bait yet ;-)
Tags: blogging, blog, coComment, firefox

[update] Of course the other point to bring up is for you blogger users out there (like me): Turn off the pop-up comments option!! While it doesn't prevent us using coComment it does make it more work (I.E. some rather than being automatic). And surely you wany to look after your visitors - especially those leaving comments?

A bad sporting weekend (not a repeat post)

As a companion post to; A good sporting weekend, A bad sporting weekend

Well the results of the teams I support all seemed to swing the wrong way this weekend:
Warriors play great football but just don't have the luck to topple the top of the table Bronco's.  Darn - playing top of the table is normally when they can win! Still watching the game from a corporate suite on halfway certainly made for a good spectacle!
All Whites lost 4-0 against Brazil - not a bad performance I suppose, but you really do wonder if we could have kept it to 2-0 if Neilsen hadn't broken his leg!!

And most importantly we lost our soccer 4-1 (yes again), a bad performance if I do say so myself.  And I can't take comfort in that I was on the bench for this one (because I wasn't) so cannot blame it completely on others ;-)
Although I might start blaming it on one of our center backs who cannot seem to stay in that position and plays a bit more center-mid.  And therefore not surprising that all 8 goals over the last 2 weeks have come straight through the middle...
On a further downside we lost our best striker to torn ligaments in the first 5 minutes, so he won't be back this season!

Tags: soccer rugby league sport soccer2, brazil, new zealand, All Whites

Tax Freedom day today - Every body elses anyway ;-)

Your Total Tax Bill
$32,368.85

Your Tax Freedom Day
Saturday, 20 May 2006

Days worked for the Government
139

Days worked for yourself
226

https://www.staplesrodway.com/index.cfm/Hidden_Tax/hidden_tax

A bad sporting weekend

As a companion post to; A good sporting weekend

Well the results of the teams I support all seemed to swing the wrong way this weekend:
Warriors play terrible football again and get destroyed by the Sharks (Started listening to the game on the radio... didn't even bother to download from Bigpond)
Hurricanes botch the final - at least we couldn't see the smug smiles on the Crusaders faces in the fog.  Damn - was kind of hoping the Canes were going to line up Daniel a bit better, they didn't even give him a touch up!

And most importantly we lost our soccer 4-1, a bad performance if I do say so myself.  Still I can at least take comfort in that I was on the bench for this one so can blame it completely on others ;-)
On a further downside we had to place a formal complaint about the opposition due to a number of incidents on and off the field - the most unsettling when one of their strikers punched our right back in the face, then wouldn't leave the field of play after being sent off...

(Thanks to weizguy for prompting me to actually remember to write this post :-> )
Tags: soccer rugby league super14 sport