Friday, 4 March 2016

Ganging up on gangs

My column this week in The NBR looks at that "Costs of Gangs" study. A snippet:
Appeals to the social cost of someone’s preferred way of being are a pretty standard way of rallying voter support against them. People like me might be sympathetic to gangs so long as they stick to selling illegal drugs. But if gangs actually cost me through the tax system, that might change my mind about them. And it might make people like me more supportive of anti-gang measures.

In the twenty-two years studied, from the start of 1993 through the end of 2014, MSD tells us that 92% of gang members spent some time on benefit, with an average duration of 8.9 years. Older gangsters spent more time on the benefit as they’d had more time to be able to be on benefit. The total lifetime fiscal cost of main benefits and other assistance provided to gang members and their relations over that period was $714 million.

Now that’s a nice big fiscal cost number. The Dominion Post this week told us that summer costs ACC $2.2 million in sun, sand, barbeque and ice-cream related injury claims. Gangs then cost the country 325 summers, if we follow this general line of reasoning.

But we should pause for a moment and go back to some classic Australian television: Hollowmen. That dark satire of Australian politics had boffins warning a politico against rolling many years’ spending into one big headline figure: “It might get you some headlines, but who needs that?” So the politician of course rolled all the annual numbers together into one big headline figure, because politicians need headlines. 
One minor slip-up on my side: the per capita measure of $6000 per year attaches to the welfare assistance component of $525m, not to the total fiscal cost of $714m. The per capita (over 22 years) figure I'd grabbed was just on the welfare assistance component, not on the whole she-bang. The annual per capita cost that goes with the $714m figure should have been about about $8200. Still far cheaper than NZ Super.

Update: NBR's kindly corrected things in the online version. Subscribe!

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