MONEY.

Why throwing another pile of $$$$ at old people is sheer idiocy

The government yesterday introduced a new winter energy payment for everyone over 65, no matter how well off they are. If Jacinda Ardern and Grant Robertson are serious about alleviating hardship in New Zealand, this is the very last group they should be splashing cash on, argues Eric Crampton.

According to every existing assessment of hardship, New Zealand’s elderly are the least hard done by.

In July of this year, the Ministry of Social Development ran the numbers. By any measure, hardship rates among the elderly are one fifth of those among the broader population. Hardship rates among kids under the age of 17 are nine times higher than hardship rates among the elderly. If we look at the least well-off quartile of the population, only 4% of that group is aged 65-plus. Meanwhile, 29% of the most well-off quartile are elderly. After-housing-cost relative income poverty among the elderly is lower than that among any other age cohort as well. And all of that winds up meaning that the elderly are the least likely to report feeling cold to keep costs down to pay for other basics.

So if you were looking to throw a pile of money at people to help with heating costs, those aged 65 are the last cohort we should be looking at.

Tables from the MSD report “The material wellbeing of New Zealand households: trends and relativities using non-income measures, with international comparisons”

Maybe you could make a case for it if public health costs resulting from cold old people were massively higher than those from other cold cohorts. But even then, the policy is stupid. If you wanted to make sure that low income seniors had more money, you’d means-test the payment rather than just making Superannuation more generous. Then you could make sure that whichever hard case people want to make sure to help is helped, while saving a giant pot full of money to help those who are in more need.

If you’re struggling to get together your deposit for a house because old people keep showing up at town hall meetings to object to any possible increase in housing supply, hit Nana up for help. She now has some to spare.

 

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