manual (1)cabinet rules
After reading a report into the housing crisis in New Zealand, the high homeless stats that have come out and how now the National party are disputing those stats, I decided it was time to have a read of New Zealand’s consitutional law, which I have loaded as a link called (cabinet rules) above. I am also including some of what I see as important paragraphs that I have copied into this and they are done in Italic form.
Below is what I believe to a vital components that appear to have been forgotten? It seems the Government has lost its way when it comes to the Intention of both of our constitutions that govern how we are supposed to treat people in this country.
The role of the public service
The role of the public service is stated in some detail in legislation, particularly in the provisions of the State Sector Act 1988, the Public Finance Act 1989 and the Official Information Act 1982, as well as a great number of particular statutes. Constitutional principles and that legislation support four broad propositions (among others). Members of the public service:
x are to act in accordance with the law; x are to be imbued with the spirit of service to the community;
Towards more open government
Over recent decades the processes of government have become more open. Notably, in 1982 the Official Information Act reversed the basic principle of the Official Secrets Act 1951: the principle now is that official information is to be made available to those seeking it unless there is good reason for withholding it. Those reasons relate to public interest such as the national security and law enforcement, and to private interests such as confidences and privacy. Underlying that principle are a number of purposes, including enabling the more effective participation of the people of New Zealand in the making and administration of laws and policies, and promoting the accountability of Ministers of the Crown and officials, with the consequence of enhancing respect for the law and promoting the good government of New Zealand.
The emphasis on greater transparency in decision making and policy development is also to be seen in the legislation governing the government’s spending and fiscal policies (especially the Public Finance Act 1989), and in the operation of the parliamentary select committee processes.
Individuals, autonomy and majority rule
In a range of ways, including those just indicated, individuals and communities do participate directly in political and governmental processes important to them. There is for instance much emphasis in law and in practice on those exercising public power giving fair hearings to and consulting those affected by the exercise of that power. Also relevant is the enactment of the Citizens Initiated Referenda Act 1993
A balance has to be struck between majority power and minority right, between the sovereignty of the people exercised through Parliament and the rule of the law, and between the right of elected governments to have their policies enacted into law and the protection of fundamental social and constitutional values. The answer cannot always lie with simple majority decision-making. Indeed, those with the authority to make majority decisions often themselves recognise that their authority is limited by understandings of what is basic in our society, by convention, by the Treaty of Waitangi, by international obligations and by ideas of fairness and justice.
The international context
Major changes in science, technology, communications, trade patterns, financial systems, population movement, the environment and many other matters of international concern mean that more and more law is made through international processes. The powers of national governmental institutions are correspondingly reduced. This has important consequences for national and international constitutional processes. Under changes to parliamentary procedures, Parliament has a greater opportunity to scrutinise and comment on the more significant international treaties before they are ratified by the Executive.
Changing the constitution
In theory, many parts of the constitution can be amended by legislation passed by a simple majority of the Members of Parliament. That power is, however, restrained by law, convention, practice and public acceptance.
Some limits on constitutional change arise from the international obligations which have just been mentioned.
Certain key elements of the electoral system can be amended only if the people in a referendum approve, or three-quarters of the Members of Parliament agree. The provisions thus protected concern the three-year term of Parliament, the membership of the Representation Commission, the division of New Zealand into general electoral districts, the voting age, and the method of voting. In accordance with that requirement, the amendments made in the last 40 years to those provisions have been made only following agreement between the major political parties in the House or, in the notable instance of the change to proportional representation, following a binding referendum (which had itself been preceded by an indicative referendum).
It also appears to be accepted, at the level of convention, that those voting requirements also apply to any proposal to amend that protective provision. Similarly, Standing Orders provide that an entrenched provision should be introduced by the House only by the vote which would be required for the amendment or repeal of the provision being entrenched. The 1986 Constitution Act itself was enacted with general bipartisan support in the House. And recommendations to the House for new Standing Orders, in accordance with convention, are adopted by consensus in the Standing Orders Committee.
Other constitutional changes arise from legislation enacted in the regular way, such as the New Zealand Bill of Rights Act 1990, from decisions of the courts, from new prerogative instruments, and from changing practices (which may contribute to new conventions). Some matters are better left to evolving practice rather than being the subject of formal statement. But such development, like other changes to the constitution, should always be based on relevant principle.
2.23 Portfolio Ministers in most cases have responsibility for appropriations in one or more Votes, which are administered on their behalf by their departments. Ministers seek authority from Parliament for their appropriations, each of which is limited by type, amount, scope, and period. Ministers are responsible for decisions on the spending from within these appropriations on:
- outputs provided by their departments, Crown entities and other bodies;
- other operating expenses, such as social welfare benefits or official development assistance;
Of Note Social Welfare Benefits are written into our Constitution. That means we have a right to them in times of need.
Compliance with legal principles and obligations
7.60 Ministers must confirm that bills comply with certain legal principles or obligations when submitting bids for bills to be included in the legislation programme. In particular, Ministers must draw attention to any aspects of a bill that have implications for, or may be affected by:
- The links above are of the latest report into child poverty in New Zealand from the Ministry of Social Development. One part shows that New Zealanders in the bottom 10 percent of income earners were now spending more than half of their income on housing.
- I believe the report is full of the National Party line that wants people to think all is rosy, when it clearly is not. The report is full of bias.
- The report used the Gini Coefficient of Inequality as a form of measurement as I have shown below. Sadly all the countries in the OECD still use this form of measurement and I believe it is now outdated as a method post this latest financial crises that started back in 2008.
Gini Coefficient of Inequality
This method calculates the Gini coefficient (G) of inequality with bootstrap confidence intervals. A Lorenz plot is produced when a single variable is specified for analysis, otherwise the summary statistics alone are displayed for a group of variables.
The Gini coefficient was developed by the Italian Statistician Corrado Gini (Gini, 1912) as a summary measure of income inequality in society. It is usually associated with the plot of wealth concentration introduced a few years earlier by Max Lorenz (Lorenz, 1905). Since these measures were introduced, they have been applied to topics other than income and wealth, but mostly within Economics (Cowell, 1995, 2000; Jenkins, 1991; Sen, 1973).
G is a measure of inequality, defined as the mean of absolute differences between all pairs of individuals for some measure. The minimum value is 0 when all measurements are equal and the theoretical maximum is 1 for an infinitely large set of observations where all measurements but one has a value of 0, which is the ultimate inequality (Stuart and Ord, 1994).
When G is based on the Lorenz curve of income distribution, it can be interpreted as the expected income gap between two individuals randomly selected from the population (Sen, 1973).
The classical definition of G appears in the notation of the theory of relative mean difference:
– where x is an observed value, n is the number of values observed and x bar is the mean value.
If the x values are first placed in ascending order, such that each x has rank i, the some of the comparisons above can be avoided and computation is quicker:
– where x is an observed value, n is the number of values observed and i is the rank of values in ascending order.
Note that only positive non-zero values are used.
The small sample variance properties of G are not known, and large sample approximations to the variance of G are poor (Mills and Zandvakili, 1997; Glasser, 1962; Dixon et al., 1987), therefore confidence intervals are calculated via bootstrap re-sampling methods (Efron and Tibshirani, 1997).
StatsDirect calculates two types of bootstrap confidence intervals, these are percentile and bias-corrected (Mills and Zandvakili, 1997; Dixon et al., 1987; Efron and Tibshirani, 1997). The bias-corrected intervals are most appropriate for most applications.
In order for G to be an unbiased estimate of the true population value, it should be multiplied by n/(n-1) (Dixon, 1987; Mills and Zandvakili, 1997). This corrected form of G does not appear most literature, but there are few situations when it is not the most appropriate form to use.
In the context of measuring inequalities in health, Brown (1994) presents a Gini-style index, seemingly calculated from two variables instead of one. The two variables comprise distinct indicators of health (y, e.g. infant deaths) and population (x, live births) for n groups sorted by a composite measure of health and population (e.g. infant mortality rate).
Gb based on two variables (e.g. infant deaths and live births) will be very similar to G calculated from a composite measure (e.g. infant mortality rate). In most situations it is more natural to think of inequality of the composite measure. Another reason not to use Gb is that its statistical characteristics are not well studied.
StatsDirect does not provide a separate function to handle distinct health and population variables when calculating Gini coefficients, instead you should use the single composite health/population measure.
The Pan American Health Organisation (2001) gave the following illustration:
||GNP per capita
||infant mortality rate (IMR)
Positive non-zero observations = 5
Bootstrap re-samples = 2000
Bias = 0.057218
Brown’s Gb = 0.1904
Gini coefficient = 0.19893
Percentile 95% CI = 0.023645 to 0.219277
Bias-corrected 95% CI = 0.151456 to 0.241304
Unbiased estimator of population Gini coefficient = 0.248663
Percentile 95% CI = 0.029557 to 0.274096
Bias-corrected 95% CI = 0.18932 to 0.30163
This example uses too few groups for reliable inference from G.
The percentile confidence interval is defined as:
– where g* is a Gini coefficient estimated from a bootstrap sample and a is (100-confidence level)/100.
The bias-corrected confidence interval is defined as:
– where g* is a Gini coefficient estimated from a bootstrap sample, G is the observed Gini coefficient, α is (100-confidence level)/100, ϕ is the standard normal distribution and k is the number of re-samples in the bootstrap.
- Donald Hirsch and Laura Valadez from the Centre for Research in Social Policy at the Loughborough University Published this link in blue below, in June 2015 which shows a far more comprehensive and far more real cost of living that is more inclusive.
1 The Problem
Relative income poverty counts the number of people in households with incomes below 60 per cent of the median. Incomes are adjusted by household composition through equivalisation, a process that applies weighs to adults and children according to their number and age. However, one imperfection of this measure is that it fails to account fully for variations in what different households need to spend to reach an equivalent living standard. As well as household composition, large variations can be caused, for example, by the costliness of housing in a given part of the country, by disability and by the generation of a particular income level requiring large expenditures on childcare in order for the family to work.
Any poverty measure will always be an approximation; it would never be possible to match up each individual household’s situation and detailed costs with their income. However, the three factors mentioned above – housing, disability and childcare – are hard to ignore when discussing poverty measurement. Each can impose huge differences in costs. Moreover, in the UK, costs associated with each of these factors can generate additional income from state transfers (housing benefit, DLA/PIP, childcare element of tax credits/Universal Credit). Perversely, this means that an additional cost can in some cases increase a household’s income relative to the median, when their disposable income (after the paying for the cost in question) is in fact the same as or lower than someone without this additional cost (depending on whether the benefit payment partially or fully covers the cost).
This problem has been dealt with in the case of housing costs by the reporting of income both before housing costs (BHC) and after housing costs (AHC), as DWP’s Households Below Average Income does. Disability costs would be harder at present to deal with in this way because they are difficult to identify precisely, and cannot be estimated through an income survey (except, very indirectly, via the level of disability benefits). On the other hand, childcare costs are reported in the Family Resources Survey (FRS), which is used to measure the income distribution and poverty. However, to the best of our knowledge, childcare costs have not been taken into account for producing a poverty measure in a similar way that AHC has been produced.
I concur with their argument that shows a new income measure is needed, which they have called: Income after Housing and Childcare cost (AHCC). As it stands now only the cost of housing is measured, and nothing else is included, not even food which we all know has been rising in cost at a very fast rate. As they have stated children with disabilities or special needs which sadly cost a lot more are also not included in the standard measure, neither is petrol or indeed anything else and this is where I see a huge problem with the model used by our Government and indeed all Governments in the OECD to measure poverty and the crisis we now have with housing.
In the Ministers report the criteria under the Human Rights that he used, I believe is also to low, post the stock market crash of 2008. Unless this is looked at again we will not see any changes happen. The poverty line needs to moved to a lower point that is more inclusive and then the Government needs to really do the job of taking better care of its people and have a serious look at the housing crisis that is only getting worse every single day post 2008.
Below is from the Conference Board of Canada:
Is world income inequality increasing?
At the 2011 World Economic Forum in Davos, income inequality and corruption were singled out as the two most serious challenges facing the world.1 Zhu Min, a special adviser at the International Monetary Fund, told delegates that “the increase in inequality is the most serious challenge for the world. . . . I don’t think the world is paying enough attention.”2
And in a recent keynote address to an OECD policy forum on income inequality, Richard Freeman, professor of economics at Harvard University, noted that “the triumph of globalization and market capitalism has improved living standards for billions while concentrating billions among the few. It has lowered inequality worldwide but raised inequality within most countries.”3
Is Freeman correct? Is income becoming more concentrated among a relatively small group of people? And if so, what are the consequences for the starndard of living of the many, today and in the years ahead?
Current headlines certainly seem to support Freeman’s remarks. Forbes magazine’s 2011 list of billionaires—the Forbes Rich List—revealed that the world’s 1,210 billionaires set a record for combined wealth of $4.5 trillion. While the U.S. has more billionaires on the list than any other country, middle- and low-income countries have their share as well.
Freeman’s forum remarks also make an important distinction between income gaps among countries, such as the income gap between Canada and China, and the income gap among individuals within a single country. In other words, are you examining whether the gap is increasing between rich and poor countries or whether the gap has increased between rich and poor people within one country? It is entirely possible that the income inequality within one country, like China for example, may be increasing while at the same time the gap between the average income in China and the average income in richer countries is shrinking. Freeman’s comments suggest that inequality worldwide has decreased, but inequality within each country has increased.
How do we measure world income inequality?
The Conference Board has analyzed world income inequality using three methods.
Method 1: Calculate the income gap between rich and poor countries
This method calculates the average income of high-income countries (as defined above) and compares it with the average income of low-income countries. The difference between the two is called the “income gap” and is tracked over time.
Method 2: Calculate the overall world income inequality using the Gini index measure
The Gini index is the most commonly used measure of income inequality. Named after the Italian statistician Corrado Gini, the Gini index calculates the extent to which the distribution of income deviates from a perfectly equal distribution. It ranges from 0 to 1. A Gini index of 0 represents exact equality (that is, everybody has the same amount of income); a Gini index of 1 represents total inequality (that is, one person has all the income and the rest of the society has none). An intuitive way of understanding the Gini index is that the number corresponds to the share of total income that would need to be redistributed in order to achieve exact income equality.5 So, for example, a world Gini index of 0.55 means that 55 per cent of the world’s income would need to be redistributed in order to have exact income equality.
Method 3: Calculate the income inequality of each country and compare them
As noted earlier, it is entirely possible that the income inequality within a country may be increasing at the same time as the gap between the average income of that country and the average income in richer countries is shrinking.
For this reason, we need to also look at what is happening to income inequality within each country.
In New Zealand there has been a rise in importing immigrants to the job market and as quoted below we are also seeing the effect of this on market forces which fuels the housing crisis.
Market forces, particularly skill-biased technical change (SBTC) and increased globalization, are creating a rising demand for highly skilled labour. Edward Lazear, chairman of the U.S. President’s Council of Economic Advisors, explained this in a 2006 speech: “In our technologically advanced society, skill has higher value than it does in a less technologically advanced society.”11 As developed countries import more low-skilled-intensive goods and export more skills-intensive goods, jobs in low-skilled industries are lost in those developed countries.
With this crisis we need to focus on Branko Milanovic’s wise words;
Branko Milanovic argues that even if market forces are partly to blame for rising income inequality, the idea that governments should not intervene in the market should be rejected. The question of global income inequality cannot, he states, “be taken out of the social arena by evoking ‘the market.’ The market economy is a social construct, created, or rather discovered, to serve people, and thus raising questions about the way it functions is fully legitimate in every democratic society.”13
Andrew Samwick, economics professor at Dartmouth College, divides the period from 1929 to today into four distinct eras based on income inequality:16
- The Great Compression: 1929–1947
This was the birth of the middle class in the United States. Real wages for manufacturing production workers rose by 67 per cent, while real income of the richest 1 per cent fell by 17 per cent. This resulted in the gap between rich and poor narrowing (compressing).
- The Postwar Boom: 1947–1973
This was an era in which growth was widely shared—real wages for manufacturing production workers rose 81 per cent, and the income of the richest 1 per cent of the population increased by 38 per cent.
This was a period in which all groups lost ground. Real wages for manufacturing production workers fell by 3 per cent, and the income of the richest 1 per cent fell by 4 per cent.17
- The New Gilded Age: 1980–2007
Incomes in the richest group soared, while they stagnated in the other groups. Between 1980 and 2007, the income of the richest 1 per cent rose 197 per cent, although the income share of the richest 1 per cent is still slightly below its peak in 1928.
We are now in a new era post the collapse of 2008 that has changed everything in the world.
More research is showing that using the gini method of measuring wealth by income-inequality before accounting the impact of taxes and all the other variations that happen within a household is simply not working in this new era of economics.
Perhaps consumption is a better measure of the economic well-being. Once all costs have been taken out you have a clearer picture of a household. Then we can have a more honest and real-time view of the housing crisis that has also happened because of the economic crisis that is effecting those not in the 1% of the population.