The lifetime cost of Paula Bennett – our $6 million woman

Paula Bennett – to those of whom know her well – is probably a warm hearted, generous person with a gentle demeanour and great sense of humour. To the rest of us she’s a cold-hearted troglodyte whose sole skill is to conduct beneficiary-bashing exercises, aimed at distracting the populace from the failed economic policies of a government full of deadbeats.

Her latest tactic is to ask a bunch of Australian accountants to come up with the “lifetime cost” of beneficiaries … $78 billion, they reckon. Which we’re prepared to take at face value because, after all, we certainly trust Australian accountants.

It’s always important to get some balance into the debate though, so we thought we’d fire up our patented cost-o-matic lifetime calculator algorithm (actually a Microsoft Excel macro dreamed up by Bob, our office cleaner and head research analyst) to find out how much Paula Bennett was likely to cost the NZ taxpayer.

Our assumptions were that she remains as an MP, effectively bludging her way through life, until she’s 65. During that time she’ s a Cabinet Minister when National are in power (50% of the time remaining until she retires) and for the rest of the time is the National Party Spokesperson on Privacy Breaches. She was born in 1969, so she takes a hard-earned rest from sticking her hand in the taxpayer’s pocket a cool 22 years from now.

A Cabinet Minister’s salary is an impressive $257,800, and a common-or-garden backbencher pulls down a lesser (but still significant) $141,800. To make the maths easy we’ve ignored all the rest of the allowances … it’s the equivalent of the Australian accountants ignoring the extra $11 per week in hardship allowance that a solo mother in South Auckland might get if her rent makes up more than half her benefit – we know it exists, we just can’t be bothered calculating it.

Given Paula Bennett entered Parliament in 2005, we therefore need to account for 29 years of taxpayer-funded largesse. If half of this is spent on the back benches and the other half around the Cabinet table, the hard-working Paula will have sponged a full $5,620,200 … or a good-sized Lotto win, courtesy of the PAYE in your pay packet.

But wait, there’s more. We’ve yet to take into account the benefits Paula received as a solo mum, prior to coming into Parliament, or the training subsidies she enjoyed (but which her government has subsequently cancelled), or the subsidised health care for her family, or any of the other social benefits she’s enjoyed. Not because the information doesn’t exist, but frankly we have the work ethic of a bunch of Australian accountants and can’t be bothered calculating it.

But if we were going to take a stab at it – in a headline-generating, truth-fudging kinda fashion – we’d say Paula is our very own $6 million woman. Now that’s value for money, people!

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Why is Hubbard being charged, but Hotchin is still a free man?

We’ve been rightly critical of the South Canterbury Finance bailout, so it was interesting to see that Allan Hubbard is being charged by the Serious Fraud Office … but hang on a sec, wasn’t Allan Hubbard the bloke who was tipping $60 million into his old company as restitution to investors? And why is he being charged when Mark Hotchin, scumbag of the investment community and Gold Coast refugee, is still walking around without a home detention bracelet attached to his ankle? Hotchin has consistently raised two fingers to every investor he bilked, hasn’t committed to repaying a single dollar of his ill-gotten gains, yet it’s Hubbard that’s being charged? How come the double standard, SFO?

Could it be that Allan Hubbard’s real crime was to loan to dairy farms in the South Island, and any collapse of South Canterbury Finance would damage the inflated capital values of National’s support base? And that the SFO had to make a scapegoat of Allan Hubbard because it’s the rural base that really matters to National, not the life savings of a bunch of urban retirees?

Shit, these days it’s just one rhetorical question after another.

That back-office bullshit

So the budget is out and the stupidity is now apparent for all to see. The entirely venal National Party approach to facts, projections and actual numbers is summed up nicely over at The Standard:

I have never, for instance, seen a budget in which cash raised from yet-to-be-sold assets was put on the books as if it already existed. They’ve basically bet our health system on being able to flog our assets for an imaginary price. Nor have I ever seen a New Zealand government make a billion dollars worth of cuts without being able to say what they are cutting. I don’t believe they actually know where these cuts will come from or how sustainable they will be.

One of the sources of these public sector savings cuts is in the mythical back office, the allegedly unproductive part of the sector that accounts for the money, runs the computers, keeps the lights on, runs the payroll and all the rest of those inessential services. National has long pursued the line that there is plenty of wasted cash sloshing around, being consumed by unproductive “pen-pushers”. Thankfully someone did some actual research on the numbers:

The 33 agencies measured in the report spend an annual $1.85 billion on back-office functions, or about 9.8% of their total operational costs, of which $1.05 billion is spent on ICT.

The report came from Treasury and the Department of Internal Affairs, so the expenditure numbers are likely to be reasonably robust. There are probably some savings possible through rationalising IT systems and the like, but it’s also likely that at least some of this low-hanging fruit has already been plucked in response to the belt-tightening of the last three years.

So the myth that there is lots of money that can be redirected from the public service’s back office to the front office looks like a piece of ideological cant, rather than anything attributable to rational analysis – what a surprise. English was pushing the party line this morning:

“We want government administration to be as efficient and well organised as it can be. At present the costs of running government are too high and there is too much duplication and waste.”

What’s missing from this statement is anything that resembles numbers, so it’s a matter of wild-assed conjecture whether a single dollar will be saved. The reality is that “too much duplication and waste” is really a coded phrase for more job cuts in the public sector.

 

Favourable market conditions for dummies

The problem with being the Economic Illiteracy Support Group is that New Zealand politics is a target-rich environment right now. There are so many stupid comments from so many stupid people that it’s hard to know where to begin.

Thankfully there are other high-quality commentators to do some of the heavy lifting, so we don’t need to intervene everywhere – for instance both No Right Turn and the inimitable Gordon Campbell pilloried the Minister of Dirty Dairying, David Carter, for his announcement of up to $400 million in subsidies for his farmer mates to dump effluent in New Zealand’s rivers. Their posts avoided us having to point out that it was yet another dumb-assed move from a Minister who makes Rob Muldoon look like an economic rationalist.

The other challenge is not turning this site into a continual Bill-and-John show. The dynamic duo in charge of the National Party have the sort of turns of phrase which stand-up comedians can only envy – like this pearler from John Key (thanks, Danyl):

“For the most part we are 100% pure.”

John Key defending New Zealand’s environmental record during a BBC interview.

The big challenge: how can we possibly maintain our hip post-modern ironic stance when the politicians are saying this kind of shit in real life? It’s a problem.

And then there was today’s contribution from the Prime Minister, part of the justification for slashing Kiwsaver:

The Government would borrow $20b this year. That is more than needed, but Key said the Government was taking advantage of favourable market conditions. “On a weekly basis, that averages out to new debt of $380m a week. That … increase in debt is absolutely unaffordable,” he said.

Umm … let’s analyse this one for a moment. The logic – such as it is – seems to go something like this:

1. We’re going to borrow more than we need this year because the market conditions are good.

2. We can’t afford to keep borrowing like this.

Every credit card user in the country can see the obvious error. The bank has lowered the interest rate we pay, so we go out and load up the credit card because the money is a bit cheaper, even though we don’t really have a use for the money, and now we’re moaning and complaining because paying the interest bill costs so much that we can no longer afford to go to the doctor. And the credit card is now full – how on earth did that happen?!

Irony is lost on these clowns. And the results can easily be seen in the government’s books – from surplus to the largest deficit in the country’s history in less than three years. Some commentators are suggesting that National is engaged in some form of class warfare, deliberately looting the country for the benefit of the rich. But that requires a level of intelligence that is nowhere on display with the Bill-and-John show. It could simply be that they are the sort of brainless idiots that borrow money they don’t need, and then bitch about how expensive it will be to pay it back.