this is the line set at a chosen level in a reference year (now 2007), and held fixed in real terms (CPI adjusted)
the concept of ‘poverty’ here is – have the incomes of low-income households gone up or down in real terms compared with what they were previously?
‘moving line’:
this is the fully relative line that moves when the median moves (e.g. if median rises, the poverty line rises and reported poverty rates increase even if low incomes stay the same)
the concept of ‘poverty’ here is – have the incomes of low-income households moved closer or further away from the median?
Is child poverty in New Zealand 245,000 children or 305,000 children?
260,000 kids in income poverty, 180,000 in material hardship, 10% in severe poverty, 3in5 in poverty for a long time http://t.co/Oy5cWftvwU— Child Poverty NZ (@povertymonitor) May 21, 2015
If you base your estimate of child poverty on the 60% of median income after housing costs moving line, which is the number of low income households who moved further away from 60% of median income, a median which increased by 5% last year, the figure is 305,000 children after housing costs. 45,000 children are in households that is not as close to the median as last year but are not necessarily any poorer than last year in terms of money coming into the house.
If you base your estimate on the anchored line, which is the number of low income households whose income has gone up on down compared to what they were on previously,the number of children in poverty has increased from 235,000 to 245,000 after housing costs. About 10,000 children are poorer than last year – poorer enough than last year to be classified as in poverty.
Jeremy Corbyn had 30 years to split from the Labour Party, which he voted against 25% of the time, establish his own party and receive the same reception presumably he would have got without needing to have to run for leader of the Labour Party.
The reasoning Corbyn never split from the Labour Party, and the reason why the left never splits from the Labour Party, is the left knows that it would get far fewer votes on its own rather than piggybacking on the right wing of that party.
The right split from the British Labour Party in the early 1980s to form the Social Democratic party. The right-wing split from the Australian Labor Party at least four times over its history.
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The left is never split from the New Zealand Labour Party because it knows that it could never get anywhere even under proportional representation without the image of being part of the traditional Labour Party, centre-left, social democratic, not socialist. Jeremy Corbyn and the rest of the left of British Labour are practising mild mannered entryism. By stealing the brand of the Labour Party, the left obtains far more power than it ever could standing on its own two feet as true believers.
Labour would win many more votes because the offer of a genuine socialist alternative would shake voters loose of their false consciousness.
The left of the Labour Party never went out on its own to test that hypothesis because they knew in their hearts be lucky to not to lose their deposits.
This is despite the strong rise in third parties in British politics despite first past the post.
The remnants of the communist parties do well at elections in countries such as France, Germany (Linke or Left Party) and Japan and are in government in Greece.
The Trots regularly get 4% in French presidential elections while the British SWP is still in the same league as the monster raving loony party.
The right wing of the Labour Party was willing to take its chances under first past the post voting in the House of Commons because it knew that a large part the electorate would vote for it in preference to the remnant of a left-wing run Labour Party.
The combination of these splitters from the British Labour Party and the Liberal party won 25% of the vote, two percentage points behind the British Labour Party.
The average commute by public transport is 40 minutes as compared to less than 25 in a car. 74% of Aucklanders drive to work and another 9% are a passenger in a car.
No information was available on those who bike to work because only 1% of Aucklanders bike to work. Only 2% of all New Zealanders take a bike to work. The sample size was therefore too small. Yet another reason to ban bikes at night. Few commute on this mode of transport in Auckland.
The near identical commuting distances irrespective of the mode of transport except walking is further evidence that people are quite discerning in balancing commuting times and job selection as per the theory of compensating differentials. Indeed, average commuting times in Auckland are much the same as the average commuting time in America.
Improving the commuting times in one mode of transport will mean people simply take the mode of peak hour transport that is suddenly become less congested while others who were not going to commute at peak times or start commuting at peak times as Anthony Downs explains:
If that expressway’s capacity were doubled overnight, the next day’s traffic would flow rapidly because the same number of drivers would have twice as much road space.
But soon word would spread that this particular highway was no longer congested. Drivers who had once used that road before and after the peak hour to avoid congestion would shift back into the peak period. Other drivers who had been using alternative routes would shift onto this more convenient expressway. Even some commuters who had been using the subway or trains would start driving on this road during peak periods.
Within a short time, this triple convergence onto the expanded road during peak hours would make the road as congested as it was before its expansion.
Interesting to notice that in New Zealand and the USA after these increases in marginal tax rates on single taxpayers, their economies slowed down. What appears to have happened is a number of people reached the next income tax marginal tax rate threshold.
21% would have been a good guess of the average and marginal tax rates of the New Zealand single earner or couple including with children and even a second earner in 2001. New Zealand average and marginal tax rates have been on a wild ride since the year 2000.
As the above chart shows, while the average tax rate of a single earner with no children is pretty much unchanged at about 20%, he now faces a marginal tax rate of 30% or more rather than 21% in 2001.
For a married couple with one income, as the above chart shows, their average tax rate has been about zero for a good 10 years now but their net marginal tax rate is a good 50% or more because of abatement rates on family tax credits, which is a skewed incentive situation. A large income effect from the family tax credit encourages the consumption of leisure but a high marginal tax rate discourages working more.
For two earner couples, their average tax rates have fallen because of family tax credits but their marginal tax rates have gone through the roof as the above chart shows. A tax system that discourages quite severely any further work or investment in human capital by average earners may have adverse effects on the long-term trend growth rate of New Zealand.
to 51% for one earner couples with two children in 2001 and stayed up above 50% until 2014; and
to 33% for single earners with no children in 2004 because income growth pushed them into the next tax rate bracket which then dropped down to 30% in 2011.
to 33% in 2004 for two earner couples with the second earner earning 33% of average earnings and then increased to 53% in 2006 and stayed high thereafter;
to 33% in 2004 for a two earner couple with the second earner earning 67% of average earnings and then increased further to 53% in 2006 and stayed high until 2014 when their marginal income tax rate dropped to 30%; and
These large increases in marginal tax rates on single earners and families coincided with a slowing of the economy in about 2005. The economy started to pick up again when there were tax cuts introduced by the incoming National Party Government. Is that more than a coincidence?
A flat line in the above figure is growth at the trend growth rate of 1.9% of the USA in the 20th century. A rising line is above trend growth for that year while a falling lined is below trend rate in GDP per working age person.
In the lost decades of New Zealand growth between 1974 In 1992, New Zealand lost 34% against trend growth which was never recovered. There was about 13 years of sustained growth at about the trend rate or slightly above that between 1992 and 2005. The entire income gap between Australia and New Zealand open up during these lost decades of growth between 1974 and 1992.
Australia grew pretty much in its trend rate of growth since the 1950s. The so-called resources boom is not visible such as showing up as above trend rate growth.
Canada was the largest source of foreign investment during the period, as its pension fund bought 18 properties in a portfolio from AMP and increased its stake in Kaingaroa Forest.
The New Zealand Superannuation Fund, the sovereign wealth fund part funding New Zealand’s old-age pension from 2029/2030 onwards, has been a bit of a wild ride. Sometimes the earnings of the Fund were well below and sometimes earning well above the long-term bond rate.
Source: New Zealand Superannuation Fund Annual Report 2014.
Since its inception, the Fund earned an average annual return of 9.78%, which was 5.06% above the long-term bond rate, and 1.03% above its reference portfolio.
No information was given in the annual report of the New Zealand Superannuation Fund on the marginal dead weight cost of the taxes raised to fund the New Zealand Superannuation Fund to see whether there is any net benefit to taxpayers from its establishment and continued operation.
The New Zealand Government has contributed $14.88 billion to the fund from prior its inception in 2001 to the suspension of contributions in 2009 by the incoming National Party Government.
Source: New Zealand Treasury.
Over the nine years in which contributions were made, the company tax rate of 28% could have easily been up to 10 percentage points lower.
The New Zealand Treasury estimates that a one percentage point cut in the company tax costs about $220 million in forgone revenue if there are no other changes to the tax system. These are static estimates that do not include any feedback from greater investment and higher growth.
The New Zealand Superannuation Fund must beat the market every single year to make up for the deadweight cost of its funding, a premium for the investment risk added to the Crown’s portfolio and the cost to New Zealand’s growth rate of higher than otherwise taxes on income, entrepreneurship and investment.
Why Evolution is True is a blog written by Jerry Coyne, centered on evolution and biology but also dealing with diverse topics like politics, culture, and cats.
In Hume’s spirit, I will attempt to serve as an ambassador from my world of economics, and help in “finding topics of conversation fit for the entertainment of rational creatures.”
“We do not believe any group of men adequate enough or wise enough to operate without scrutiny or without criticism. We know that the only way to avoid error is to detect it, that the only way to detect it is to be free to inquire. We know that in secrecy error undetected will flourish and subvert”. - J Robert Oppenheimer.
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