Thursday, February 27, 2014

Treasury, National, and child poverty

Today's Treasury fuckup: they underestimated the number of children living in poverty by 20,000:

A breakdown in communication between Statistics New Zealand and Treasury saw the number of children living in poverty underestimated by tens of thousands.

It also led to the gap between rich and poor being slightly underestimated.

Treasury admitted substantial errors were made in its calculations of disposable income levels in Kiwi families for recent years, but says the results had no effect on the "real world".

"[T]here are no 'real world' impacts on New Zealanders from the miscalculations," Treasury chief economist Girol Karacaoglu said in a statement.

Treasury has one job: adding stuff up. And its clear that they can't do it properly. They can't accurately forecast GDP (they systematically underestimate under it left-wing governments, and systematically overestimate under right-wing ones - almost as if they had an underlying assumption that the economic sky will fall in under the "wrong" government), and now it turns out that they can't even track income distribution properly. And we're paying them $78 million a year to do this. For that sort of money, accuracy is the least we cna expect.

As for the idea that this had no impact at all, think about that for a minute. Sensible governments pay attention to the empirical evidence and use it to shape their policies and judge their performance. The only way such a massive error could have no impact is if National isn't doing that on child poverty - that is, if it doesn't care about it at all. We already knew that, but its useful to have it confirmed by another source.