In Place of Fear

This election gets more and more interesting.  

Last Sunday, Winston Peters, leader of New Zealand First, revealed that he'd been overpaid on his superannuation. It appears that the Ministry of Social Development's calculation of his superannuation had been based on the single person's rate. As Peters is in a de facto relationship, he should have received a lower rate. The overpayment came to light when his partner applied for superannuation.  Peters sorted it out and immediately repaid the sum owing. He says he has no idea how incorrect information came to be on his records given he went through the paper forms with a senior MSD official, and his partner was present.  

Maybe there was a data inputting error, but as has been argued by National’s pollster, David Farrar, Peters should have received regular letters asking if the information on file is correct, which should have alerted him to the problem.

All I can say about that is, neither my husband nor I can recall ever receiving such a letter from the MSD. 

Peters will not waive his right to privacy to allow the MSD to comment, and why should he? His privacy rights have already been breached by the leaking of information from either the Inland Revenue Department (IRD), which administers the superannuation payments, or the MSD or, as is now emerging as a distinct possibility, the Beehive.


By going public on Sunday, Peters pre-empted the story that had been touted by Newsroom as the "mother of all scandals" (MOAS) which was going to break on Monday. 




The co-writer of the story, Tim Murphy, former editor-in-chief of The Herald and co-editor of Newsroom, later claimed on Twitter that the MOAS claim had been "hyperbole" to wind up Newshub's Political Editor, Patrick Gower.  

If that was true, Newsroom was about to reveal something that could end a political career and change the face of an election, yet its co-editor thought it was a good idea to wind up another journalist and set the Twittersphere on fire.

It may well turn out that the MOAS is not the Peters' overpayment and what caused it, but the use of private information in another dirty politics campaign in the lead up to an election.  If that proves to be the case, senior staff at Newsroom were either actively complicit in it, or were used as tools.  Either scenario brings their professionalism and political acumen into question and has caused some serious cracks to appear in Newsroom's glossy veneer. 

What it says about the National Party, and its involvement in dirty tricks in the lead up to another election, has yet to be made clear.  

What we know is that the overpayment was referred to Anne Tolley, Minister for Social Development, under the "no surprises" rule on July 31st and again August 15th. It was passed onto the Prime Minister's Chief of Staff who says he decided not to tell the PM. It was also revealed to the Deputy Prime Minster, Paula Bennett, who used to be the Minister for Social Development and who has been under public scrutiny for alleged breaches of MSD rules in the past; and – somehow – it was leaked to the media and went public just 3 weeks out from an election in which the subject of the leak is very likely to be a key player.

I can't understand why Peters, as a party leader, a wealthy man, a lawyer, the champion of superannuitants, a wily and very high-profile politico whose de facto relationship is well-known, would have claimed to be single on his superannuation application.  And why would he ignore letters asking him if the information on the system was correct? 

I'm not saying it's impossible, just that it seems highly improbable. 

Unlike poor superannuitants, for whom every dollar they get matters in real and pressing ways, Peters has no need to count every dollar he gets on his super, and I can well believe that he simply had it paid into a savings account without stopping to think about the actual sum, and that he leaves all of his financial stuff to his accountant.  I bet he's not alone in that.




So, was this a dirty politics strategy to use the information to destroy Peters' credibility, and with the Green vote in disarray, push blue-green and NZ First voters to National to allow it govern alone with the increasingly noisome David Seymour of ACT?  

It certainly looks like it. 

And of course, there's the added bonus of softening up the public for future changes to universal superannuation, such as introducing means testing or even phasing it out completely.  After all, the rich don't need it, the affluent can manage without it, and the poor can continue to subsist on welfare benefits – or die. 

As to the claim that Peters would have known precisely what he was due, my husband and I didn't. We assumed the people who processed our applications were competent and would understand and fairly apply their own rules.  It was only when we encountered the retributive and potentially punitive nature of the system that we felt the need to do our own research.  

What I had thought would be a simple process of lodging a claim for NZ superannuation became embarrassing and anxiety inducing when, in an open-plan office, with no attempt to ensure privacy, I was told that my husband had been overpaid because he had not updated information about my income. The member of staff said that there would be an investigation; that it would be a significant sum; that there could be penalties, and that a prosecution was "unlikely unless it was deemed to be a deliberate fraud". 

It was shocking, and it left me feeling highly stressed. It was also wrong. There had been no overpayment. Either the information on the computer did not match that on the original paper form and this was subsequently established and corrected, or the employee was wrong in her understanding of the rules.  We suspect the latter but we don't know because we never got a formal explanation, let alone an apology. 

We thought about lodging a complaint but frankly at the time I wanted nothing more to do with the organisation. I left there feeling deeply grateful that I do not have to deal with it on a regular basis.

Our experience with the MSD was a relatively insignificant episode but it was symptomatic of most NZ bureaucracies and especially so of the MSD which, at times according to my husband, could more properly be called the Ministry of Social Destruction.  

This sort of institutional culture :

works on a deficit model of human behaviour which makes employees assume the worst about people and encourages them to look for ways that can be confirmed;

is regulatory rather than facilitative i.e. the primary function is to apply rules in ways that erect, rather than remove, barriers;

is austere in that it encourages employees to depersonalise, and actively discourages them from empathising with their 'clients;

is moralistic in that clients are often informally labelled as either deserving or undeserving; and, 

is parsimonious in that it encourages its employees to see themselves as the guardians of the public purse which is always at risk of being pilfered by the "undeserving".

All of this rests on the individualisation of the social contract – summed up in the vacuous Thatcherite notion that there is no society, that there are only families and individuals who are largely responsible for themselves. If they fail it is because of their own shortcomings; if they succeed it is because of their own merits.  

The current welfare system in many ways harks back to the ethos of the Workhouse which split families by forcing men and women to live separately and which made the conditions of relief so harsh, so degrading and so cruel that any sort of work, at any sort of wages and in any sort of conditions was preferable to it.  It is no accident that the Poor Law Commissioners and the Workhouse loom so large in British history, and why they were so detested. 

Of course the welfare system today is not as crudely moralistic or as cruelly and overtly oppressive but it springs from the same rootstock.  A class of smugly content haves imposes forms of regulation and retribution on a class of increasingly discontented and desperate have-nots. 

I felt uneasy about criticising the MSD because of its punitive culture and the enormous power the state wields courtesy of the knowledge it has about almost every tiny detail of our lives. Imagine how it is for people who are utterly dependent on the state for their subsistence.

One of the worst things about the Peters' scenario and what happened to Metiria Turei, is the message it sends out which is that big brother really is watching you, and if he decides he needs to, or simply wants to, he can give you the father of all kickings.  

There's an important principle here. NZ is split end to end and if we don't heal the wound it will finally kill what's left of our culture of decency and a fair go. 

The Impoverishment of a Nation

A few hours after I had uploaded my previous post, the news broke that Metiria Turei, the co-Leader of the Green Party, had resigned. 

On August 8th, Checkpoint’s, Mihingarangi Forbes, had done a powerful piece on poverty in Manurewa, in which local people voiced a lot of support for Metiria Turei.

The following day, someone who was described as a "close member" of Ms Turei’s family, contacted Checkpoint and alleged the wider family found it "galling" that Ms Turei claimed hardship as a solo parent when in fact she had been given a lot of support from the family, including financial support.

Checkpoint put several questions to Ms Turei in writing, to which she did not respond, but instead phoned them to say that she had decided to resign, both as co-leader and as an MP.  In an interview with John Campbell, she addressed and refuted the allegations but said it had all got too personal, so she had to step down. 

It’s not known who the family member was, why they took until the day after the Checkpoint programme to reveal this information, or whether they had spoken to Ms Turei before deciding to betray her in that way. For make no mistake, it was a betrayal. I cannot imagine how I would feel if someone in my family did something like that to me. 

We don’t know whether this person had a political agenda but whatever their motivation, they must have known what both the personal and political consequences would be.  

The only good thing about the awful situation was that the kindest journalist in NZ carried out that very difficult initial interview so for a while at least we were spared the smug triumphalism of Ms Turei's highly vocal critics.

So here we are.  A Mãori woman  – who came from a working class background, studied to become a lawyer, raised a child and ended up as co-leader of the country's third largest political party –  started a critically important narrative about poverty and powerlessness in 21st century NZ.

She drew on her own experience of living on the DPB to give that narrative a personal touch, including the admission that, as a 23 year old, she’d not been accurate about the number of people she had shared her house with.

it's obvious that admitting to what amounts to fraud, even if it was of a low order of offence and committed 25 years ago, was a very risky strategy. Given the depths of anti-beneficiary sentiment in NZ and the prevailing rightwing bias in the media, it was always going to be difficult to steer the narrative and keep it positive once that fact was in the public domain.

Subsequent revelations about a technical breach of electoral law and suggestions that she had lived in the same house as the father of her child whilst on the DPB, muddied the waters even further. 

But, the appeals to a threadbare morality from right wing politicians and the rightist commentariat did not diminish her support among poor and marginalised people or among those who care about them. 

However, the suggestion that she had embellished her situation for effect could mean the all important core issue of poverty and powerlessness would be obscured by uncertainty.

It was there in a question posed on RNZ two days ago "were you really in poverty", and in Matthew Hooton’s claim that Turei was "upper middle-class’"– which is demonstrably untrue in terms of her background but which gained some traction when her in-laws were factored in.

Perhaps the intervention of this anonymous "close family member", which was more damaging than any of the preceding attacks had been, was just a coincidence. If so, it's a remarkable one and when there is a story in the media about a lawyer who has been struck off because she paid Dirty Politics stars Carrick Graham and Cameron Slater to help her ruin her ex-partner's career, it's surely not unreasonable to ask whether Ms Turei’s political opponents had been on the look out for someone who could help bring her down.  

Even if Ms Turei did embellish her personal story a bit – which is by no means proven – it's vital not to allow the self-righteous blowhards or calculating ideologues to distract or detract from the core issue – that poor people in NZ today are suffering real, measurable harm.

Metiria Turei struck a chord with people who have been left behind. She told people who are mired in poverty that there is a way out; that she knew from her own experience how things are for them, and that positive change is possible. It is a message they should hear loud and clear from the Labour Party but do not. 

The idea that the chord Turei struck might actually become a song, that the tens of thousands of poor and marginalised people in NZ might actually become energised, might be encouraged to engage with the political process and become a political force that could change the face of NZ poltiics, could not be permitted. It was imperative that she be discredited, and so she was. 

The message that has gone out to replace Ms Turei's message of hope is : 

"Look what happens even to a powerful and well-educated person who challenges us; we pulled her down and made it look as though it was all her own fault – imagine what we could do to you."

I don’t think I have ever felt more ashamed of so many of my fellow Kiwis, or more proud of some others. 

"Nobody should steal from taxpayers"

Rachel Stewart weighed into the Metiria Turei debate today : 

"For me, it comes down to this. Dress it up as a morality play all you like. Rich, poor, rightwing, leftwing, tax evasion, benefit fibs. Nobody should steal from taxpayers. And no amount of diversion tactics changes that fact. Turning Turei's voluntary pronouncement into some virtuous act of heroism is so far off the mark, the Greens have ended up shooting themselves in the foot. Which may explain why they are limping."

"Nobody should steal from taxpayers."   

There we have it – the classic knee jerk juxtaposition of "taxpayers versus non-taxpayers" which lies at the heart of all the moralising claptrap posing as rational argument and political analysis.

The divide between tax-payer and non-taxpayer is an ideological weapon – fashioned and wielded by people with a powerful ideological agenda.  

There is no simple divide between tax-payers and non-tax-payers but there is a simplistic one which is very active in the hearts and minds of those who want to demonise the poor and keep them in their place.  

The fact is that in NZ everyone’s a tax payer. The poor pay a higher proportion of their income in tax than the affluent because they have to spend every penny they receive – whether in benefits or wages – and just about everything in this country is subjected to GST.  

"Ah, but beneficiaries are paid out of what hardworking tax payers earn."

As are politicians and the police and army and teachers and medical staff and civil servants....

A lot of beneficiaries will have paid tax in the past on what they earned, and would no doubt be happy to pay tax again if there were jobs for them which paid a living wage.  Many of them will have working parents and other family members who pay tax.

Tax is a contribution to a social fund which is a vital part of the social contract that binds a society together – which enables it to function. The vast majority of tax payers get far more value from their tax than the simple sum of what they pay as individuals.

A corollary of the simplistic tax-payers versus non-taxpayers argument is that the more tax you pay, the greater the say you should have in how it is spent, which would mean that big business, as the largest contributor, should have the power to dictate social policy.  

The fact that the poorest and most marginalised in our society attract both the greatest attention and receive the most vitriol says a lot about the health of our social contract, and none of it good. 

Businesses which hide their profits off-shore; rich people who tuck assets away in family trusts so they can be eligible for the $50k+ a year aged care subsidy; people who employ accountants to minimise family income so that their kids qualify for state assistance while at college; landlords who price gouge when rents are being paid by the state; people who avoid GST by working for cash .... they may all be said to be stealing from the public purse but that sort of conduct is accepted as legitimate or even praised for being smart.

There is a deep vein of cavilling mean-spiritedness in NZ which is the bedmate of the irrational belief that the current social order is meritocratic. 

It’s a combination that results in some seriously unpleasant conduct, which is never more on display than when someone like Metiria Turei is in the frame.

The awful fact is that a disturbingly large number of Kiwis’ reaction has been to want to give her a kicking – and make no mistake, some of them would like that be a literal kicking. 

I happen to think that Metiria made a strategic error in admitting she'd lied to WINZ. She should have anticipated the backlash and the fact that it would be used to divert attention away from the right's delinquency.  I believe her motives were genuine – she wanted to reach out to the people she knows are hurting under the harsh regime that's been imposed by another working class Mãori woman with a similar back story to hers.  I don't subscribe to the notion that she was looking for affirmation or whatever other pop psych explanations columnists can dredge up. Perhaps she wanted to follow Helen Kelly who openly admitted breaking the law in order to highlight its iniquities. 

Whatever, if you don't get the fact that this both exemplifies and exposes the class divide which the politics of the past 30 years has been all about both opening and obfuscating, then you are a fool or an ideologue – or in the case of David Seymour, both. 

So Rachel, for me it comes down to this: you are very clever, very articulate and now very influential, and you just helped put the boot into a Mãori woman who came from a working class background, and who is an environmentalist with a strong belief in social justice.  

Way to go.

Fight or flight

I found this comment on Slaterblog some time ago. It was a response to the question of who was the "worst politician". It has a certain currency in light of recent events.

"The too sweet to be wholesome Aussie COMMIE REFUGEE NORMAN.Also the little fat ugly frog TUREI.Two pathetic assholes who seem to think we are all stupid and we cant see their hidden agenda of turning NZ into another North Korea."

Russel Norman is of course no longer co-leader of the Greens, and Metiria Turei is back in the sights of the loud-mouthed and bigoted bullies whose knee-jerk reactions are so violent they have knocked themselves stupid.

I once questioned the ethics of horse racing on a Yahoo site, and I was called a "rabid PETA whore'"; another genius came up with "granola-eating kook". There were several in similar vein – full of sound and fury and signifying – a great deal actually.

There are significant cognitive differences between those who have liberal political views and those who have conservative political views. These differences influence and go beyond, how they vote. 

The politically liberal tend to be more open minded and open to change; they tend to want to understand phenomena and, if what they find out doesn't fit with what they think, they're more likely to adjust their beliefs and their behaviour. The extreme end of the liberal spectrum could be a relativism which prevents meaningful political action. A person who argues that we cannot stand in judgment of other cultures/religions, and therefore we cannot impose our values on them even when their values are in direct contradiction of our laws, ties themselves in both moral and political knots.

The politically conservative are more likely to respond with fear or aggression to things that challenge their world view, less likely to change attitudes or behaviour, and in the absence of facts, they may make up stuff to support what they already believe. The extreme end of the conservative spectrum is an absolutism that can lead to terrifying consequences.

Studies have indicated that those cognitive differences are matched by structural differences – most notably that the amygdala (flight and fight control centre) is larger and more active in the brains of people who are politically conservative.  

Whether that's genetic is simply not known, and in any event, how any given genetic inheritance is expressed depends on the social environment. It's not nature versus nurture, it's nature combined with nurture. 

It might also be that the size of the amygdala is not the issue but how quickly and efficiently the more evolved parts of the brain kick in and rebalance and recalibrate the system–  for the simple reason that it is not evolutionarily advantageous to exist in a state of persistent fear, rage or disgust.

The bottom line is – when we are running on adrenaline we are less capable of being rational.  All systems seek homeostasis – acute or chronic imbalances can be highly destructive. If you lack a fear / aggression response you may be less able to survive the actions of predators – from within your own species as well as others.

If you are in the grip of persistent fear / aggression, you may have a short-term survival advantage in some situations, but the hormonal storm will harm you in the longer term. This harm can take the form of being exiled from your group as well as the physical damage to a biological system that is unable to restore homeostasis.

Horses are a good exemplar. As prey animals whose primary defence is flight, they have a hair trigger flight / defence response to perceived threats. This autonomic response is controlled by the sympathetic nervous system powered by the hormone adrenaline which propels them instantly and explosively into flight. The energy maintenance hormone, cortisol, sustains effort. It’s why we can make horses do things they would normally avoid – like racing at a flat out gallop over longer distances than any predator would chase them, leaping huge obstacles etc etc. 

But rapid flight carries risk of injury and is energy intensive so, in horses which have acquired experience of the world, the brain assesses the nature of the threat and if it’s not worth expending energy and risking injury, the parasympathetic nervous system acts to re-establish homeostasis. 

It’s all very interesting and complicated but it has allowed me to construct a caricature to counterpose against those used against the left, if there is a "loony-left" it is only fair and just that there be a "ranting-right" aka the Amygdala Brigade, the right’s storm troopers.

I'm fascinated by the thought processes of the Amygdala Brigade. I watch them with same sort of wary fascination as I would a 4-metre crocodile. 

Rightwing propagandists concentrate a lot of their malign energy on caricaturing environmentalists and the left in general as "loonies" and "tree-huggers" or as "closet commies'" out to destroy our current –  demonstrably unfair, uneconomic, inefficient and ineffective – way of organising production. They do this to keep the Amygdala Brigade on full alert.

We should not be too surprised when the members of the AB behave as if they are totally Upminster (8 stops past Barking) when you consider that one of their most prominent members, John Ansell, in an interview with New Zealand’s premier morning news programme in the lead up to the 2014 general election, referred to Russell Norman as  "the Australian communist".

Largely unchallenged by interviewer, Susie Ferguson, Ansell was allowed to rabbit on at length about "the people who supported the thinking behind leaky homes could soon be in charge of state housing, Russell Norman, the Australian Communist (SF laughs) could be in charge of finance in 1 month’s time (SF laughs again) that sort of thing that's what the Nats are going to have to be running with (SF still laughing) the Cunliffe cabinet is going to be 1/3rd Green…”

The reason why became obvious later when John Ansell admitted he’d gifted his dubious talents to a campaign which made claims about Green politics that verged on the deranged. The idea was to damn the Greens and, by association, damn Labour, or more specifically, David Cunliffe.

Some time ago, Ansell announced he was fundraising to form a single issue political party – to get rid of "racial politics" in NZ. It seems he’d also fallen prey to the notion that Mãori are not NZ’s indigenous people because the Scots got here first, ergo the Treaty is invalid. 

The Treaty is between the Crown and Mãori so in legal terms he was not on safe ground – but given the shaky anthropological ground he’d ventured out onto, that was the least of his worries.

But he was right about one thing – how to appeal to the classic "low-effort", conservative thinkers who retreat to the safety of what they think they know. They are out in full force over the recent Metiria Turei revelations. 

There’s not much we can do about them, but there are a lot of other people who are more open minded and reasonable.  What we must do is to keep pointing out to them which track National's train is really on, and that it’s the shortest possible route to a socio-economic and political version of Tangiwai. What we must not do is sacrifice Metiria Turei.

Human Kindness is Overflowing - Not

Metiria Turei took a political gamble in exposing herself to right wing, media and bureaucratic scrutiny in advance of a critically important election. It was a naive move because the moment she admitted having lied to WINZ, she put herself in the State’s power and risked losing control of the political narrative.

It was obvious those omissions, and anything else that emerged subsequently, would be used against her and would place her party and its political allies in a very difficult position. 

The Labour Party’s new leadership quickly decided it had to distance itself from her so as not to jeopardise its honeymoon with the media.  Turei resisted calls for her to resign as MP and co-leader and she was not thrown under the bus by her allies and colleagues but instead "voluntarily" gave up her seat on it. 

The PLP could have stood beside her; it could have said that what is of far greater importance is that the system is weighted heavily against the poor, and that the compassion gap both in the system and in society needs to be closed.

But they listened to the commentariat and the pollsters with their carefully worded questions and the howling of the Amygdala Brigade and Jacinda Ardern pointedly stated that if Turei had not stepped off the bus voluntarily, she would have pushed her off it. 

So, Turei is punished, and Labour’s new leader has proven she’s tough enough to make it in the macho melee that is national politics. 

Labour’s so-called "dream team" has set out its stall with the jaunty catch phrase “let’s do this" - the provenance of which is less than auspicious given Clinton used it to respond to Trump’s nomination, after which Trump’s campaign took it up and threw it back at her.  

It's sad that the first act of the "let’s do this" campaign was to step aside while a Mãori woman threw herself off the campaign bus.

Turei is a decent and caring woman who, long before she even became an MP, took a decision to withhold information from WINZ so as not to have her benefit cut and who decided to confess to that in order to highlight an on-going and worsening reality for beneficiaries. 

But that’s lost to everyone except those who understand that sometimes you have to balance morality and principle against the letter of the law – especially when that law was written by ideologically motivated politicians and is being applied by ideologically directed bureaucrats.  

As to all those little people who Turei wants to help, and whose plight she was trying to raise awareness of, they might have to wait as clearly it’s all still about fighting for the hallowed middle ground. 

The Lords of Misanthropy

A young man, not long out of his teens, walked to a concert venue carrying an explosive device designed to cause maximum damage to a large number of human bodies, his own included.  

He had chosen the softest of soft targets – a pop concert that attracted a mainly young audience. He detonated the device as people were leaving the venue. The blast and the shrapnel killed and injured dozens of those softest of soft targets. 

Of the 8 people who have been identified as being dead at the time of writing this, 7 are women and girls. The youngest was just 8 years old.

In carrying out that act of appalling cruelty, the young man had to overcome two deep human senses – self-preservation and empathy towards other human beings. 

His preparedness to die and his inability to empathise with his victims were probably rooted in both a belief in an afterlife full of rewards for what religious ideologues define as acts of faith, and in a disconnection from, and disillusionment with the society in which he had lived his whole life.  

It's likely that a further ingredient in that already corrosive mix was a vicious misogyny that finds ready succour in fundamentalist sects within patriarchal religions.  

Judged by any rational and humane standards, the killing and maiming of the defenceless and the young, is as counter-productive, cowardly and dishonourable an act as it is possible to imagine. 




We are all entitled to ask what sort of god is it that demands such a cruel sacrifice as proof of faith?

The truth of course is that a vengeful, bloodthirsty god is both the creation and the reflection of vengeful bloodthirsty and power-hungry men who seek to elevate and justify their actions with the notion of divinely ordained right to take an eye for an eye.  

The British state kills defenceless young Muslims by dropping bombs on them, ergo it is justifiable for Muslims to kill defenceless young British people in retaliation. 

In order for a person to take that vengeful path and to stay on it to its bloody end, they either never had or have switched off the connection to other people's emotions and states of mind that marks us as properly formed social beings – as fully human. 

It's probable that this young man had been exposed to people who systematically stripped him of any empathy he had and filled in the resulting hole in his being with bitterness, intolerance and hollow certitudes.  

But, I have to wonder whether, for that to happen, he must already have been a deeply flawed person. There are many people in his situation who feel deep anger and bitterness towards those they see as oppressors but who could never carry out such an atrocity.  

I find it hard to express how I feel about the sort of people who are easily manipulated by patently absurd propaganda – whether that be religious or political, who have a deformed sense of self and a crude and one-dimensional world view.  I understand and deplore the social conditions that led to some of them becoming so morally and psychologically malformed.  I might even feel pity for them – but probably not as their actions are just too awful and the consequences of them are too far-reaching. 

The consequences of their actions are not confined to the immediate deaths and injuries they inflict – they also serve to support the interests and extend the influence of malign men who would destroy the whole world rather than yield even a little of their power or budge an inch from their ideological position.

So, while I reserve my deepest loathing for the puppet masters who manipulate others from places of comfort and safety – I cannot forgive their puppets. 

And in case you think I am speaking only of radical Islamists –  I draw no clear distinction between the likes of this morally defective young man and the pilot of an attack helicopter who guns down civilians in an Iraqi street, or the operators of a drone that slaughters civilians at a Yemeni wedding. 

They are all props holding up a global system, run by corporate cowards and political poltroons, that depends on bringing out the very worst in people. 

The way to counter that malign influence is to strive to bring out the very best in ourselves. 

Trust Issues

The British Tories' proposal to take personal assets to pay for long term care for the elderly and people with dementia has proved so unpopular they have resorted to buying up Google ads in an attempt to stop people from reading about it and directing them to their website where their spun version of events is available.

Here in NZ there is a government subsidy for aged care which is payable when people have personal assets of less than $220k. Assets include savings and privately owned property, like houses. 

On the surface that seems reasonable – if you have a lot of assets you can afford to pay for your own care which frees up state provision for those who have no assets. However, dig beneath the surface and it’s demonstrably unfair and is heavily weighted in favour of the already affluent who are far more able to, and adept at protecting their assets because they can afford to employ accountants and financial advisors who know all the ways in which tax can be minimised, and access to state benefits can be maximised. 

They do things like create a Family Trust into which they settle their private assets. This can be done by selling the assets to the Trust or gifting them. The settlors may make themselves discretionary beneficiaries, which allows them full and unfettered use and enjoyment of those assets until their death or the termination of the Trust, when their designated heirs – the final beneficiaries – inherit all the Trust’s assets or income from it.

The debt that is created when ownership of property is transferred to a Family Trust is considered to be an asset because the Trust owes the settlor/s the value of the property sold to it.  One way around that is to write off or forgive the debt.  Up to 2011 that could be done at a rate of $27k a year without incurring gift duty. 

So, if you had property worth let’s say, $1.5 million, which you settled in a family trust making yourself and your partner the discretionary beneficiaries and your children the final beneficiaries, writing it off at $27k a year meant it would take 55 years to completely forgive it.   

If you needed care, any monies that were owed to you were considered in the calculation of assets.  So, if you had forgiven $1m of the debt, the Trust owed you $500k which would take you over the asset threshold for aged care subsidy. 

In 2011, the National Party changed the law to allow people to forgive Family Trust debts in total, and to gift additional assets without incurring duty.  One of the benefits of this was that people could transfer assets into a trust and forgive the debt more quickly, leaving themselves free to claim the full aged care subsidy – as long as the bulk of the gifting was done 5 years before claiming the subsidy which currently is in the region of $50k per annum.

It is not uncommon for people in retirement homes to have their license to occupy a unit owned by a family trust which allows them to qualify for the state subsidy and receive a full state pension.  I know someone who, by virtue of having a microwave in her unit, also claims independent living supplement on her pension although all her meals / laundry / cleaning etc are provided by the facility.

My mother (who had assets over the threshold courtesy of the insurance settlement on her earthquake destroyed home) and who did not have the wherewithal to create hiding places for her assets, paid the maximum cost of her care until she died.  She was also personally liable for all the "extras" the aged care sector pile on top of the $890-970 per week government subsidy (depending on area). Pretty much anything that makes life in residential care a bit more tolerable, carries a significant additional charge.

There are other similar iniquities. If a person in receipt of an old aged pension or any other form of social welfare payment, is in hospital for more than 3 months, their pension or benefit, minus a small amount of pocket money, is clawed back by the government to offset the costs of the medical care. 

Only the state pension is treated in this way.  Someone can have substantial personal assets and be in hospital long term and not be expected to pay a penny but a pensioner on the basic state pension will simply have the bulk of it taken off them after 3 months.  

If the loss of that income threatens the person’s ability to maintain their home (payment of rates, insurance etc) they can make a case for those costs to be covered, but as with so much else, the onus is on them to do that, often in circumstances in which their ability to protect their own interests is at the lowest ebb.

So – if the Tories get in again and the UK follows NZ’s lead in forcing the sale of family homes to pay for care, there will be all manner of tax and banking loopholes that the affluent will be able to utilise to protect their assets.

And, if the care system is anything like it is here – the assets that a person is permitted to keep will be whittled away by all the things the state provision doesn’t cover which here includes the premiums imposed by the facility for such things as an en-suite shower room/toilet, a room with a view, a larger or a sunny room etc;  specialist visits (that are not publicly funded); transport to other services or to outside social events; toll calls, private phone or cell phone; newspapers, books or magazines; personal toiletries; recreational activities that are not part of the normal programme; hairdresser; dietician, podiatrist, or other services that have not been prescribed by a doctor and are not publicly funded; glasses, hearing aids and dental care.

Everybody knows that the dice are loaded

Everybody rolls with their fingers crossed

Everybody knows that the war is over

Everybody knows that the good guys lost

Everybody knows that the fight was fixed

The poor stay poor, the rich get rich

That’s how it goes

Everybody knows

-Leonad Cohen