Monday, 4 November 2013

Taxpayer-sponsored poverty entrapment

Guest post by Dominic Costello

The New Zealand Welfare solution was envisioned and eventually introduced at a time when real poverty and actual starvation was a day to day reality for some Kiwis. However, as real poverty and actual starvation have diminished, the Welfare Solution has done the reverse, evolving to a level its designers would not have imagined possible.

Over time, the umbrella of of welfare coverage has expanded significantly faster than the growth in population.  And little wonder.

Once the need for taxpayer support is agreed to, of itself it becomes necessary to extend that support to include other equally necessary areas of support.
Special interest groups show their dire need and support for their claims comes from well intentioned NGOs.
As the clear and obvious need for each of these new areas of support are accepted it becomes necessary to add to the specific coverage.
The much loved Salvation Army determines that child poverty is on the rise. It determines this to be the case because there is greater demand on their free food banks and other free support services. This statistic proves only that more people are prepared to accept handouts than ever before. But the solution is, media driven demand for more money.
And, as with any bureaucracy funded by the efforts of others, those available funds can always be shown to be inadequate for the admirable task set for the department.  This is the case for all government departments.

So as levels of absolute poverty have shrunk, the New Zealand Welfare Solution has become the thing on which government now spends most

The baby boomers’ parents knew real poverty.  But they had the skills and ethics to turn out large, and largely functional families.  
They had the help of extended families, with parenting skills passed down from previous generations. 
They had a willingness to work to supplement their groceries from the soil round the house.
They almost always had the advantage of a parenting partnership.

The Sallies and other NGOs determine however that the key cause of poor health outcomes, high uptake of drugs, and high levels of criminality and recidivismism is not absolute poverty, which by any measure is diminishing, but  relative 'poverty,' which they claim is not.
The global acceptance of this inherently incorrect data makes finding a remedy impossible, and finding the resources from a dwindling taxable pool equally impossible.

All benefits inadvertently dis-incentivise effort. Take the dole, as one example.

My mother expressly forbade any of her six children to accept the dole.  As a school leaver however, going from nothing-per-week to the something-for-nothing of the dole was an unbelievable windfall.  She saw the trouble with it very clearly. I fought her on this and lost.

I was eventually forced to pay back my first four weeks of dole money.
But for a new school leaver the something-for-nothing of the dole seems like an unbelievable windfall. It is so attractive that it traps that young proto worker in their first christmas holidays cashed up.
Time on your hands, mates equally cashed up and summer. What could be better?
Tragically if that summer drifts on to another, you and your non working peers form bonds of comradeship.
You are still earning on a par with your poor unfortunate working mates, but have the luxury (you think) of an ever extended school holidays.

The tragic downside of this comfortable situation will become increasingly obvious as time on the benefit rolls on, and your attractiveness to prospective employers becomes less and less. And so this victim of the dole watches as his working friends start to rapidly outstrip him in earnings and in the trappings of wealth. Envy and resentment builds.

The dole is bad enough as a gateway drug to welfare dependency. Of the multitudes of expanding benefits and beneficiaries however, hands down the most well-intentioned—and perversely the most damaging for society and its victims—is the DPB.

The DPB comes with significantly greater apparent advantages. 

A teenage girl knows everything! Life at home is getting her down and mum’s latest boyfriend has started to take a lot more interest in her than seems appropriate. The DPB powerfully incentivises these vulnerable young girls to have children of their own as long, just as they can do so without having a strongly committed partner to share the burden.

Could there ever be an incentive so perverse?

The taxpayer gives this young woman a house of her own, food of her own choice and all the stuff she can imagine she needs. It “gives” her these, and then washes its collective hands of her.

Intergenerational dependence on this form of support adds to the inevitability and exacerbates the disconnection from traditional mother to daughter skills. She is now a child with a child, one with extremely limited skills, a demanding mouth to feed, and effectively isolated from support .

The social stigma that would once have limited this kind of situation occurring in the first place has long gone.
But more importantly, at a time when young people are yet to discover how much they do not know, the authority and institutional wisdom from a caring extended family which would once have provided their support has been replaced by the state. 

If the system had been designed to harvest recruits, it could not have been designed better.

Change must come and the conversation will be ugly and filled with emotional rhetoric. But the societal problem created by taxpayer-sponsored poverty entrapment is no more affordable than the ever-growing mountain of taxpayer money needed to keep it rolling downhill.

Dominic Costello is an Auckland sales manager. He blogs at MaoriDom.


  1. Has Dominic noticed the number of times on TV someone is complaining they aren't being paid enough; don't have enough many for some basics; and they have 7 or 8 children (and maybe a large dog)? Does a welfare state also encourage this sort of irresponsibility and callousness towards the childrens' welfare {Don't breed if you can't feed}

  2. Good post. Very hard to argue with.

  3. Yep, very hard to argue with because it would take such a long time to document all the errors of fact and logic. All in all a good libertarian effort.

  4. Given you are short on time, why don't you document just one or two errors Judge? I could have pointed out that National has made it harder for teenagers to get cash hand-outs but as this only temporarily delays transition to full benefits, I didn't bother."


1. Commenters are welcome and invited.
2. All comments are moderated. Off-topic grandstanding, spam, and gibberish will be ignored. Tu quoque will be moderated.
3. Read the post before you comment. Challenge facts, but don't simply ignore them.
4. Use a name. If it's important enough to say, it's important enough to put a name to.
5. Above all: Act with honour. Say what you mean, and mean what you say.