Friday 24 January 2014

The (Actual) State of the Nation

Yesterday, Prime Minister John Key gave his "State of the Nation" speech in West Auckland, at a $90/head fundraising event. The media has largely focused on the new educational leadership policies that were announced, introducing "Executive Principal", "Change Principal", "Lead Teachers", and "Expert Teachers" to encourage more collaboration between schools and provide further career development and opportunities for our best teachers. Just over half of his speech (roughly 54%) was about education and the new policies, but I thought it was interesting that the media has glossed over most of everything else he said. Other than the direct political attacks against Labour's policies, a number of claims are made about how the nation is improving in a number of areas, and for the most part we've just taken John Key's word for it. So here is a quick look at some of the claims. Skip to the end if numbers aren't your thing. Click on the links for sources.

"The economy is growing"
Conventionally, economic growth is measured through real Gross Domestic Product (GDP) per capita. According to the latest data from the Treasury we are sitting at around 2% annual growth. Looking at data from the International Monetary Fund (IMF), their October 2013 report gives a more optimistic 2.5%, which is still positive. From a selection of 37 "advanced economies", we are tied with Australia for 5th place (with Israel, Singapore, Hong Kong, and (South) Korea beating us), so we seem to be in a good position.

"More jobs are being created"
This is a surprisingly difficult statement to actually verify. Most of the time, people simply look at the unemployment rate and call it a day. However, this doesn't take into account population changes, industry changes, skills shortages, and many other factors that create a difference between the actual number of jobs in the market and the number of people who don't have jobs. Statistics New Zealand uses a combination of tax data and actual business data to measure job creation and job destruction to get a net figure. The latest Quarterly Employment Survey shows that over the last year the number of filled jobs has increased by 1.9%, which was made up of a 3.2% increase in full-time jobs but a 0.8% decrease in part-time jobs.

"Family incomes are rising"
Again, "family income" is slightly more difficult to measure than individual income. Statistics New Zealand provides the relevant numbers; over the last year, average weekly income has risen by $51, around 3.2%. However, we should adjust for inflation to find the real change in family incomes. The Reserve Bank of New Zealand reports an inflation rate of 1.6% (a number I find hard to believe, but that's not really relevant here). This means that real family incomes actually rose at a rate of 1.6% in 2013. It is still the highest post-recession rate, although it pales in comparison to 6.2% in 2002 and 5.9% in 2007, but is still obviously preferable to the -3.4% in 2009.

"Crime is falling"
The December 2013 data is not yet (publicly) available, but we have data from June 2012 to June 2013 available from the New Zealand Police. They report a 7% decrease in crime over that period, which is an appreciable decrease. Unfortunately, this is averaged across the entire country, and masks the 7% increase in crime in Canterbury (which at the same time has the greatest trust and confidence in the Police). However, overall this is a pretty good statistic for the Police.

"More elective surgery is being done in public hospitals"
In the same speech, John Key claims that 40,000 more New Zealanders will get elective surgery than in 2008. The target that has been set is for the volume of elective surgery to be increased by 4,000 discharges per year, so at face value district health boards are (on average) meeting twice their target. The Ministry of Health reported in December that they exceeded their 2013/14 Q1 target by 5% (although 5 DHBs fell short).

"Long-term welfare dependency is falling"
The Ministry of Social Development outlines quite an extensive plan govt aims to reduce long-term welfare dependency over the next three years. It is primarily measured by "the number of people who have been on a working age benefit for more than 12 months". Confusingly, they changed the way benefit counts are defined in July 2013 (which is fair enough since they were bringing them in line with international standards). While the published fact sheets do not differentiate between short-term and long-term, there has been a significant decrease in welfare/benefits between 2012 and 2013 of around 5%.

"More people than ever are getting tertiary qualifications"
The Ministry of Education data compares enrollments between April 2012 and April 2013, and shows that overall there has been a 2% decrease at universities, a 3.6% decrease at polytechnics, a 0.7% decrease at Wananga, and a 1.3% increase at private training establishments (primarily on the back of international students), for an overall decrease of 1.8%. This translates to a real decrease of 5,526 enrollments. However, strictly speaking, the number of enrollments is different to the number of people actually getting the qualifications. Unfortunately the latest data (publicly) available only goes up to 2011, but on that basis the real number has been increasing each year.

"We're making progress in the big task of cleaning up waterways, and protecting and improving water quality right across New Zealand"
There is a lot of old data floating around, and it took awhile to find something recent. The Ministry for the Environment reports that river conditions are either stable or improving at roughly 90% of monitored sites around the country. The vast majority are stable however, with only around 20% improving. To make things a bit more confusing, this is across five different metrics so it is difficult to say if a particular waterway is improving or declining since it may be improving in only one or two metrics. The Parliamentary Commission for the Environment released an excellent report in 2012 about understanding water quality and the science behind it if you are interested. However, overall it seems difficult to believe that water quality has improved "right across New Zealand".

"...income inequality has been declining"
In his speech John Key explicitly says that this is "despite what our political opponents try to claim". Statistics New Zealand has data up to 2012 comparing the 20th and 80th percentile of disposable household income (before and after housing costs). It shows that income inequality has decreased since 2011, but is still higher than 2009 levels. Interestingly, income inequality generally increased between 1982 and 2004. New Zealand ranks 25th out of 33 for income inequality in the OECD (meaning that we have comparatively quite bad inequality).

"We are a steady, centre-right government with the interests of all New Zealanders at heart."
No objective independent data was available to verify this claim.

Most of the claims made by John Key were true, with a couple of caveats. No doubt he has more up-to-date and possibly accurate data than was easily available to me (it would have been nice if he cited his sources). Perhaps some of the more important questions are:
- "Are these significant improvements?"
- "Are these improvements sustainable in the long-term?"
- "Would these improvements have happened anyway under a different government?"
This is unfortunately less objective, and ultimately why we have politics. If there was one correct solution that could be applied to create the maximum "improvement", then every government in the world would employ it. What works and what doesn't ends up being a matter of opinion because we simply don't have enough data to make conclusive decisions, and people are forced to use conjecture.

In more light-hearted news, Jacinda Ardern is still the coolest MP and does a better job of engaging and representing youth than her National and Green Party counterparts. More evidence to add to the pile: DJ Ardern is playing a set at Auckland's Laneway Festival on Monday.

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