Ten Myths About Welfare
The politics behind the government’s welfare reform process
by Gordon Campbell
Sometime during the week of February 21, the Welfare Working Group chaired by former Commerce Commission head Paula Rebstock will release its final report on welfare reform in New Zealand. From day one, the exercise has hardly been a wide-ranging or rigorous investigation. The WWG chose to fixate on a symptom (welfare dependency) selected a cause from its ideological kitbag (an alleged lack of personal motivation and of strong incentives to seek work) and shaped its policy recommendations to suit.
A long list of relevant issues have not been part of the WWG agenda. So far, the WWG’s investigations have not involved any substantial analysis of :
(a) the extent of poverty among beneficiaries and low income workers and its effects
(b) whether benefit levels can sustain basic living standards vis a vis rising costs, and the related health outcomes, particularly among children.
(c) the cost and optimum form of work and training schemes for the young unemployed.
(d) the availability and affordability of childcare, region by region
(e) the global recession’s impact on the job market
(f) the adequacy of the government’s current job creation policy.
(g) the job outcomes attributable to the government’s stimulus policy during the recession.
(h) changing social attitude to marriage breakdown and divorce, and the implications for DPB figures.
(i) the social and economic value – including opportunity cost – of parenting carried out by DPB recipients
(j) the net cost of work schemes as opposed to the health costs and law and order costs that are unemployment -related
(k) the extent to which demographic factors such as the ageing population are being reflected in the sickness and invalid benefit numbers…etc etc.
Yes, there is a lot the Welfare Working Group could have considered in depth, but didn’t. Yet the government already seems on board with some of the harsher options even before the WWG’s final report has been tabled. At this year’s opening of Parliament, Prime Minister John Key signalled his intention to enforce a five-year time-limit on benefits, random audits of sickness benefit certification, work for the dole after six months, and tougher conditions requiring paid work for parents (usually, women raising children alone) who are receiving the domestic purposes benefit.
This crackdown will come at a time when the failure of the government to keep its side of the social compact is evident. In December, unemployment reached 158,000, just shy of the 163,000 peak reached at the height of the global recession. Perhaps the people in real need of tougher work tests are the Ministers seated around the Cabinet table.
To soften the image of a government that plans to require more DPB, sickness and invalids beneficiaries to chase after phantom jobs, Prime Minister John Key has begun talking about the need for the state to provide affordable, quality childcare as part of its reform process.
“If we are seriously going to have an expectation that a young mum is going to get off the DPB and into the workforce, even on a part-time basis, we are also going to have to make sure her child is in a safe environment and is cared for and that it is cost effective”.
This concession by Key undermines much of the logic for his welfare reforms. If the work of solo parenting is valuable – and obviously it is, because otherwise Key wouldn’t be saying the country needs to pay someone else big money to do it to anything like the same standard – where is the net social or economic gain in pushing DPB recipients prematurely out to work? At best, the reforms will only replace the parent with a surrogate paid by the state.
For what reason? The current stats on the age of most DPB recipients (the vast majority are aged 25-54) and the limited period of time most solo parents spend on the DPB (see below) do not support Key’s claim that ‘a significant number of very young women [are] going onto the DPB and staying there for a lifetime.’ Really? So many that it can justify the stigmatizing of virtually everyone on the DPB ?
The process is almost entirely about politics. The message of welfare reform is not being aimed at beneficiaries – who are merely collateral damage in this process – but at low and middle income workers. In election year, there are electoral gains to be made from targeting people on benefits, even if only to divert criticism of the government’s own failure to manage the economy. There are precedents in the government of the British Tory PM David Cameron. In January the Cameron-Clegg coalition in Britain used welfare reform as a conscious pitch for what British deputy-PM Nick Clegg has called ‘alarm clock’ Britons who have recently been described by the BBC in these terms:
These are basic rate taxpayers who…. get up in the dark, get their children ready for school and then go out to work. People, who Mr Clegg accepts are seeing their already fairly modest living standards hit by pay freezes, job losses and price rises. [Clegg] points to the government’s welfare reforms which he believes are popular with working families, who perhaps resent claimants on housing benefit who are able to live in homes they cannot afford.
It carries echoes of Chancellor George Osborne’s assertion last year that the government was going to put an end to the “benefits lifestyle” – where he said some claimants were able to lie in with their curtains closed while “hard working families” headed off to work.
How long before the Key government starts singing the praises of ‘alarm clock Kiwis?’ Not long, one imagines. Left to their own devices, low income and middle class voters – squeezed by price rises and job insecurity – might otherwise start to blame the government for the stagnant economy. Far better to channel their resentment against those people who have taken the alleged ‘lifestyle choice’ of being on the dole, or of raising their children alone on the DPB.
The WWG – and government figureheads such as Key and Social Development Minister Paula Bennett –appear to have bought wholesale into a number of myths about welfare and the so called ‘ benefit lifestyle.’ Here are some common ones :
1. Anyone who wants to get off welfare can get a job.
No, they can’t. In the last two months of 2010, the number of people receiving the dole rose by 4,536 to 67,084, and rose again in January to 68, 087. The number of people out of work stands at 158,000. One in three of the people currently on the dole were over 40 years of age – and many of them suffer from age discrimination in the job market. (There were 112,865 people on a domestic purposes benefit at the end of December, 85,105 on an invalid’s benefit and 59,988 on a sickness benefit.)
As one would expect, the dole numbers have risen steeply since the recession began. In the mid 2000s, dole numbers had shrunk to around 17,000 – one quarter of the current number, and solid proof that the problem is not a lack of motivation and/or of strong incentives. The vast majority of people want to work. The history of the last ten years in particular shows that when jobs exist, people work. Conversely, no amount of self-motivation by a solo parent will create a job at her local supermarket when they are laying off staff.
It is a very odd situation. The same politicians who have been unable to manage an economy so that it employs people, are now blaming people for not finding jobs that do not exist. Nothing in this process is directly about reducing or alleviating poverty. It is mainly about reducing costs by making it harder for families to access the assistance they need in adversity – and this is being done in part at least, to make up for the revenue given away in last year’s tax cuts. It is part of the wealth transfer from the poorer to wealthier members of New Zealand society occurring on the government’s watch.
2. People on welfare commit a lot of benefit fraud, at the expense of hard-working people
The evidence for the existence of widespread benefit fraud is paltry to non-existent – despite the fact that a special fraud intelligence unit was set up in the Social Welfare department in 2007 to detect it. Last year, the department checked 29 million records, and found the benefit fraud rate (as a proportion of the total benefits paid) was a miniscule 0.10 per cent. A declining number of prosecutions – from 937 in 2009 to 789 last year – resulted.
Of the $16 million in benefit fraud detected last year, a proportion was carried out by social welfare staff – ten of whom were sacked last year for ripping off the system – and not by beneficiaries themselves. While any level of benefit fraud is unacceptable, the $16 million a year currently being incurred is hardly an intolerable burden. Currently, New Zealanders spend $16,1 million a day on impulse purchases.
Moreover, other forms of unacceptable behaviour leave benefit fraud far behind in the dust without attracting the same negative stereotypes. The major foreign owned banks for instance finally agreed in late 2009 – and only after being pursued at great expense through the courts by the IRD – to cough up $2.2 billion of what they owed in unpaid taxes. Meaning : the settlement figure this case alone was about 140 times greater than the total amount lost in benefit fraud last year..
3. Putting a time limit on how long people can receive welfare is a good idea
No it isn’t – though it certainly sounds like a tough, no nonsense policy doesn’t it? Five years on welfare and that’s your lot. Long before Oliver asked for more, those in power have found it salutary to save the needy from their…needs. In this case, five year term limits were part of the welfare reforms imposed under the Clinton presidency in 1996.
New Zealand officialdom appears to have a strong appetite for US welfare reform models. The last time a National government mounted a major attack on beneficiaries – ie, the “Welfare Time Bomb” exercise of 1997 – the programme included dob-in -your-neighbour proposals and anti-welfare pledges posted to every household. The US state of Wisconsin was the template for that exercise, and several Wisconsin welfare experts were brought to New Zealand to advise officials, and address conferences here on the Wisconsin success story.
One big difference : the Clinton administration (and Wisconsin) imposed term limits in the middle of an economic boom. The Key government is seeking to impose them in the depths of a recession. What has happened to US term limits during the current recession? Late last year Bloomberg’s Business Week magazine reported on the outcomes.
What we know is that more than 3 million people eligible for welfare are not taking part….the reasons people are scared off include rules mandating job-related searches; declining cash benefits, which “have not been updated or kept pace with inflation”; and sanctions tied to the search process. Investigators also discovered state “diversion strategies” to keep applicants from staying on the program. States can steer applicants into taking a lump sum for, say, three months of assistance; then they’re not counted on the state’s regular TANF [temporary assistance] rolls or required to maintain contact with the welfare office.
In other words, tougher work tests and term limits certainly do succeed in dumping people off welfare – in good times and bad, and regardless of the consequences for them and their children. The Clinton-era reforms have slashed the number of Americans on welfare from 4.8 million in 1996 to around 1.7 million in 2008. Instead of receiving monthly cash payments as before, people have had to register in a Temporary Assistance programme for Needy Families (TANF) which has work conditions attached and a sixty month lifetime term limit.
Leave aside the fact that getting people off welfare bears little or no relationship with lifting them out of poverty. ( Pushing people into low income, dead end jobs with no job security is not a cure for poverty.) If work requirements are to have any chance of success, the state also has to make childcare affordable, usually through increased subsidies. (Last year, the Key government cut childcare subsidies but as mentioned are now talking of creating them afresh, for beneficiaries.) Moreover, since the Clinton reformers knew that jobs would decline during a recession, they set aside some $2 billion a year to cope with that eventuality. What similar emergency funding – if any – will Key be setting aside to ensure that families reaching their welfare term limits in a recession will not be abandoned?
Well, the recession has finally arrived in the US and – superficially at least – the consequences have been somewhat surprising. Even where the recession has wiped out jobs, the people displaced have not sought assistance in any predictable or uniform way. Between states, there has been wide variations, as Business Week reported, between the unemployment rate and the requests for cash assistance.
What seems to have happened is that the hurdles erected by welfare reform actively deter people from seeking assistance, even when they and their children are eligible, and are in need. People ration out their term limit period of eligibility, such that even the eligible avoid seeking assistance. It is the industrial version of people not going to the doctor when they are sick, because they feel they cannot afford the cost of the visit. Worse – and more costly social conditions – then tend to develop.
The Business Week report was largely based on a highly relevant March 2010 survey by the US Government Accountability Office, available here.
What the GAO report indicates is that stringent welfare eligibility conditions deter people from seeking assistance during the recession – and have especially discouraged the most vulnerable people, who are suffering from disabilities. For example :
..”Other families may have found it difficult to apply for or continue to participate in the program, especially those with poor mental or physical health or other characteristics that make employment difficult... Research also suggests that, in response to lifetime limits on the amount of time a family can receive cash assistance, eligible families may hold off on applying for cash assistance and “bank” their time, a practice that could contribute to the decline in families’ use of cash assistance.
The pattern is undeniable. Tighter work conditions, low benefit payments and five year term limits not only combine to reduce the numbers of people eligible for assistance – they also deter the people who are eligible from seeking help. As the GAO report continues :
In total, about 420,000 fewer families were eligible for cash assistance in 2005 than were eligible in 1995, according to HHS data. However, most of the decline in the cash assistance caseload—about 87 percent—resulted from fewer eligible families participating in the program. In 1995, about 84
percent of eligible families participated, but over the decade, participation in cash assistance fell dramatically, to about 40 percent of eligible families in 2005.
Primarily, the welfare reform process has served the interests of politicians and bureaucrats – not families in need, or the wider wellbeing of society It has resulted in falling caseloads, even during the recent times of greatest need. Business Week again :
The law has altered the public perception of welfare and the culture of state administrators. It has been a sign of weakness to have caseloads go up, meaning new state welfare chiefs, like Jennifer Hrycyna in Illinois, confront not only their staffs’ reflex to deny benefits, but also the challenge of easing onerous rules….’Work requirements should be structured to provide meaningful opportunities to recipients that will lead them toward long-term self-sufficiency,’ says Hrycyna, ‘rather than pushing people into unstable low-wage jobs that get families off the rolls but leave them in poverty.”
Term limits deter people in need, and systematically cheat people of their entitlements. Why would we want to import such a scheme here when we already know the consequences in its country of origin?
4. People who go off on the dole go onto sickness and invalids benefits. We have to crack down on them, too.
Welfare bashing reaches its lowest form with the stigmatizing of those on sickness and invalids benefits – the bulk of whom are there for valid and ongoing reasons, such as serious physical and psychological ailments. If there is a problem with a minority being mis-diagnosed, surely the blame and policy pressure should be being directed at the GPs concerned, not at their patients.
On the international evidence, New Zealand does not have a problem in this respect. Late last year, the OECD released comparative figures which showed that one of the main reasons for the recent rise in people receiving disability benefit is that New Zealand has been from a very low base – mainly thanks to the pre-Rogernomics policies of full employment and prior methods of institutional care. True, in the wake of the initial carnage wreaked by Rogernomics in the 1980s, unemployment and disability benefits both rose sharply – and since then, unemployment has fallen but sickness and disability benefits keep on increasing.
Even so – and this is the relevant point – the numbers of working age people who receive sickness and disability benefits in New Zealand is still well below the OCED average. In 2008, this ratio was 3.8% in New Zealand, as compared to the 5.7% OECD average. Moreover, the share of people on disability benefits is among the lowest in the OECD for older workers aged 50-64, but fifth highest for young adults aged between 20-34.
Therefore, if there is mis-diagnosis going on here – as Paula Bennett would no doubt suggest – it is among young adults, which represents even worse news for the Key government. It means that the already calamitous figures for youth unemployment are even worse than they currently seem. Either way, the bulk of those people on sickness and disability benefits likely to be re-classified as work-capable by the Bennett reform process (ie, young people on sickness and disability benefits) are going to be tipped out onto the very part of the job market where the shortage is already the most extreme.
To continue : New Zealand’s spending on sickness and disability as a share of GDP was also lower in 2008 than the OECD average – 1.3% to 1.9%. A further sign that if anything, New Zealand has been skimping in this area. Moreover, the unemployment rate for New Zealanders suffering from chronic health or disability was in 2006 (the most recent comparison period available) only 7.4% – which is far, far short of the 13.7% average unemployment rate for such people among OECD nations as a whole. Conversely, the employment rate for sick and disabled people in New Zealand is among the highest in the OECD – 59.5% compared to 43.6%. The sick and disabled are already working in large numbers here even though, as the OECD also noted, such poorly paid work still leaves their incomes lower than that of the general population of New Zealand.
In the light of such figures – that show by international standards we have proportionally fewer of the sick and disabled on benefits, allocate relatively less of our national wealth to meet their needs, have more of them in work, and fewer of them on the dole – Bennett should be deeply ashamed of mounting any further attack on the people who currently receive such benefits.
5. Most of the people on welfare are unmarried mothers – many of them teenagers – who have extra children so that they can get more money
This is a hoary old myth that combines the resentment of beneficiaries in general, with prurient resentment of the sexy young having too much sex. In fact, the US and New Zealand evidence is that young people are having less sex, later than their parents’ generation.
The Salvation Army’s recently published State of the Nation report contains similar positive findings for New Zealand :
Teenage pregnancies and abortions have fallen during 2009, which is perhaps welcome news that there are fewer unplanned pregnancies. The number of 11–14 year olds giving birth or having an abortion dropped from 122 in 2008, to 108 in 2009….Although this decline is on a very small base, this number of pregnancies is the lowest in at least eight years. For older teenagers aged 15-19 years old, there was a 10% decline in the rate of pregnancies between 2008 and 2009
Such figures help contradict Key’s scaremongering use of the young as a pretext for welfare reform. More to the point, the NZ figures on DPB recipients do not bear out Key’s specific assertion about ‘significant numbers of very young women going onto the DPB and staying there for a lifetime.”
In fact, only 3.1 % of those on the DPB are under 20 years of age – and that figure has barely flickered since 2005, when the figure was 2.9 %. Put another way, 97% of the people on the DPB are NOT the ‘very young women’ of Key’s lurid imagination. There are in fact, significantly more people on the DPB over 55 years of age (5.6%) than there are ‘very young women’ receiving this benefit.
The vast bulk of DPB recipients (nearly 75%) are what you would expect : they are aged between 25 and 54. Some 61% of them are caring for children six years or under – a figure that, again, has barely changed since 2005. Nearly half are caring for two or more dependent children.
Many of these women are caring for children alone because of a marriage breakdown, which is rarely a lifestyle choice. They have not only borne the opportunity cost of foregoing career opportunities to raise a family but are also now doing the bulk of the parenting alone and – if one can believe the child support payment figures – very often without the financial support that is due to them. Even so, more DPB recipients are engaged in part-time work (16%) than those on the dole. Far from being left at home to look after their children in ways that low income workers cannot, people on the DPB have since last September, faced a regime of work tesing.
These are the women that the WWG and the Key government want to stigmatise? Even Paula Bennett’s own department doesn’t believe the real problem here is a lack of personal motivation, or an absence of strong incentives. The Social Development Department’s December fact sheet on the DPB blames the economy instead :
The number of clients receiving a Domestic Purposes Benefit at the end of December decreased from 106,000 to 98,000 between 2005 and 2007, then increased to reach 113,000 in 2010. This pattern reflects changes in economic conditions. (My emphasis.)
One further crucial piece of evidence shows there is no social or economic crisis in the country’s current DPB figures. The ratio of those on the DPB – if taken as a percentage of the working age population – was actually lower in December 2010 (at just over 4%) than it was when National left office in 2000, when the figure was heading for 5%.
6. Lots of people are on welfare for years and years, and then their children and grandchildren become welfare dependent.
This myth is based on stereotypes about the chronically shiftless and teemingly fertile poor. Lets stick with the DPB for a moment. Since the DPB involves the care of children who are dependent at least until they are 18, you’d think it would reflect lifetime dependency very strongly. Yet instead, over two thirds of DPB recipients (67.7%) are on the DPB for less than four years. More than a quarter of them (26%) are on it for less than a year, even during the recession. If this is a lifestyle choice, it is hardly a fashionable one.
Looking across all forms of benefits, 61.4 % of recipients are benefit dependent for four years or less. Only 14.3 % are on benefits for more than ten years – and since those figures include people with chronic physical and mental disabilities, the ratio of those staying on benefits because it is a “lifetime, lifestyle choice’ is lower again. In an excellent piece last year, Tim Watkin made much the same point :
Of the 28,701 people who have been on the sickness benefit for a year or more, 40% of them have psychological or psychiatric conditions. Given that we have to run ad campaigns to reassure New Zealanders that even people with depression, let alone more serious mental health issues, can be good workers, does that number seem outlandishly large to you?
Again, people who are temporarily in need of assistance – and who are using that help and moving on as quickly as most of them can – are being stigmatized in the cause of fixing what is virtually a non-existent problem.
Finally, there is a serious definitional problem with the whole notion of generational welfare dependency – the very existence of which usually turns out to be anecdotal. Namely, what is to be counted as generational dependency? When a child of low income parents in state housing accommodation loses their job and needs the dole temporarily, is that to be taken as generational welfare dependency? What it more often reflects is that the children of parents on low incomes are more likely to go into badly paying jobs that offer little in the way of job security. For similar reasons, the children of parents on high incomes find it easier to find stable, better paying jobs. Personal motivation is a minor factor in this process. For that reason, perhaps the government would be better advised to focus its efforts on fostering an economy that offers employment prospects and skills training for the people most at risk.
7. Making unemployment insurance compulsory would be a good idea.
It would certainly be a bonanza for insurance companies. It might also seem like a good idea to Finance Minister Bill English – who could not only shift much of the cost of welfare provision onto employers and beneficiaries, but could count the gigantic fund this scheme would quickly generate on the positive side of the nation’s accounts, and thus lower the cost of borrowing. That’s what has happened in Canada, where the federal government has been able to count the unemployment insurance scheme surplus on its books.
The Canadian experience with UI has been – surprise , surprise – that access hurdles rise, and payments don’t keep step with rising cost of living. In Massachusetts, the UI scheme has also exploded in rising costs to employers during the recession :
That’s the sticking point, politically speaking. UI amounts to a new tax on firms and their employees – and employers would make the loudest noises about it. The provision of welfare by private operators and insurance companies also opens up fresh avenues for fraud and abuse. For all that, UI schemes could well appeal to the far-right side of the government’s support base and to many entrepreneurs who would reap millions from the benefits trade. Given the way the economy is being managed, welfare does look like a growth business.
But the levy on employers? A levy that would keep on climbing as economic conditions got worse – and which would make employers gun shy of taking on new staff – would have the perverse effect of generating more ‘clients’ on the dole and keeping them there for longer. Some harmful outcomes of UI for employers in Washington state during the current recession are spelled out here :
Under the state’s unemployment-insurance formula, companies pay higher taxes if anytime in the previous four years they laid off employees who then received unemployment benefits. And all employers, regardless of whether they let go workers, pay a “social cost” tax to cover the workers of businesses that have closed.
The depth and breadth of the Great Recession have meant all employers are being hammered by increases in the social-cost tax. Printcom, for example, has seen its rise 316 percent over the past two years to just over 2 percent of payroll
Similar problems exist in Massachusetts such that in mid February, the Massachusetts Senate voted 36-0 to impose a ‘freeze” on UI levies to help employers to survive the recession – because the scheduled level of the levies was likely to send many firms to the wall.
For these and many other reasons, trying to introduce such a system in New Zealand would be likely to cause a political revolt among National’s support base in small and medium size business. Its a non-starter.
8. People on welfare are bludging on the rest of us.
Yes, some people do bludge – just as some people cheat on their taxes and some people don’t pay their parking fines. Arguably though, many more people on welfare are receiving the help they have already paid for. After all, one reason people pay taxes is to ensure that an adequate safety net exists for them and their children, if and when they need it. In that sense, they’ve already paid for such help – taxes are a form of social insurance – and it is outrageous that the state that has cheerfully taken their taxes in the past, should now be reluctant to meet its part of the social bargain.
People are usually in hardship for economic reasons, and not due to a lack of moral fibre. The churn of jobs and the likelihood of multiple careers in one’s working life – ie the labour ‘flexibility’ so beloved by Treasury and its corporate friends – means that it is more and more likely that at any given time in their working lives, more people (and their children and grandchildren ) will be at risk of needing temporary welfare assistance during thedir job transitions. Making such assistance miserly and more difficult to access is in no-one’s personal interest. It is also damaging to the economy (because beneficiaries spend their benefits on essential goods from retailers) and detrimental to the country as a whole.
9. Young people need welfare reform in order to teach them the value of work.
In fact, nothing exposes the hollowness of the current rhetoric about welfare reform than the cavalier treatment of the young. Just under a third of the people on the dole are aged 18-24 – again, and not by choice. Yet the government has just axed one of the most successful work schemes for young people at risk :
The Community Max programme was introduced by the Government last year and aimed at unskilled 16 to 24-year-olds with few or no qualifications.
It provided thousands of youths with six months’ work placement on a community or environmental project. Work and Income subsidised each person’s wages and also provided a training component of up to $1250 a person. It cost the Government $40.3 million.
But with all 3000 placements now filled, the scheme is no longer available, except in Northland, Bay of Plenty, Waikato and the East Coast, where the Government is offering a further 1500 placements due to high unemployment.
Greater Wellington regional council had 15 youths placed with them for six months up till June. The group helped maintain the region’s parks and resources and were given training in various aspects such as health and safety.
“It was a great success really,” council biosecurity manager Wayne O’Donnell said. “There were huge benefits for all parties involved. We are really disappointed that it’s not continuing.”
There is one other deadly outcome of the current treatment of young job hunters by New Zealand politicians. As the OECD notes, New Zealand and wealthy Norway are the only OECD countries where the rate of suicide among the young is higher than among older people.
10. Thank goodness the Maori Party is at the Cabinet table, to ensure the genuine needs of Maori are being met.
The meltdown between Hone Harawira and the Maori Party is not simply over the foreshore and seabed legislation, serious though that be If the Maori Party endorses the government’s announced plans for welfare reform, Harawira would find it very difficult to remain in its ranks. The current rate of Maori unemployment is a catastrophic 36.7%*. That is hardly a platform for punitive measures that would fall disproportionately upon Maori – who are not only being left behind by the current economic policy settings, but are most at risk from cutbacks in social services. In addition, the dismal level of funding for the Whanau Ora scheme is not much of a figleaf for Taraiana Turia and Co to hide behind.
In sum, we face real options in the current welfare reform process. If we regard poverty – and its causes – as the basic problem (whether that be among beneficiaries or low income workers) we could at least make a united start on solutions, and would frustrate the current attempts by politicians to divide us against each other. We elect them, and we pay them to manage the economy in a way that fosters sustainable employment. Good jobs are the best pathway out of poverty. Perhaps it is time the government acknowledged it has failed to honour its side of the bargain – instead of trying to divert public criticism by harassing the very families it is failing the most.
ENDS
* Correction The departmental December 2010 figures list 35.7% of dole recipients as being Maori. The unemployment rate for Maori in December 2010 however was 13.7%, at a time when the unemployment rate in general, was 6.8%. As mentioned, the impact of punitive welfare reform measures would therefore be likely to fall disproportionately on Maori.
Tags: Dole, DPB, Economy, Employment Insurance, Invalids Benefits, Paula Bennett, Paula Rebstock, Salvation Army, Sickness and Disability Benefits, Social Welfare, Teenage Pregnancy, Term Limits, Treasury, Unemployment, Unemployment Insurance, Welfare, Welfare Reform
Great stuff. Shame it doesn’t get a wider hearing. It must be time for Campbell live to have some discussions around this, must include Child Poverty Action, instead of all the junk they have now moved on to showing us.
Ka nui nga mihi ki a koe Gordon, thank you for taking the time to write this enlightening analysis of the real issues underpinning welfare reform. Lets hope voters are ready to take a stand at the next election, but not much point hoping for that I spose.
This was great, and I agree with Bronwen, this should be getting major exposure. But alas, none so blind as those who shall not see. Call me cynical, but I really believe that the talkback shows, the stuff.co forums, and all the other usual cesspits of hivemind and wilful ignorance will just listen and repeat the usual catchcries, and discuss how it was “really a great moment when that nice JK minced down the catwalk” and “I wonder what he had for his valentine’s dinner?”, all the while ignoring anything that takes more than a handful of braincells to process. NZ’s tall poppy syndrome seems to me not to be about chopping down anyone who gets too big for their boots, but rather, anyone who dares not to play along with the majority. As much as I think NZ needs to be paying more attention to writers like Gordon, I’m not holding my breath. Still, I’ll keep posting the links on my FB page and encouraging people to read them. I can’t see this level of logic and clarity anywhere else in NZ media.
This is an excellent overview, yet I am sure this will only get a fig-leaf of a hearing in the media, drowned out by the inevitably unbalanced rhetoric. I have linked this article to my facebook page, so hopefully two or three other people may choose to read it. Many blessings
I think you haven’t addressed ‘myth five’. That one doesn’t say that most people on the DPB are young women, rather that many young girls go on the DPB and then keep popping out kids to stay there. Your answer addresses the former, not the later.
To counter this myth you’d need an argument that shows what proportion on women under the age of 25 are on the DPB, and also data about how long people stay on the DPB.
Thanks Gordon… a impressive report…
Outstanding article! Well done!
And who exactly would I vote for if I wanted to take a stand at the next election?
+1 on Scott’s comment. I can hear the Kiwiblog commenters latching on to this line: “Some 61% of them are caring for children six years or under – a figure that, again, has barely changed since 2005. Nearly half are caring for two or more dependent children.”
and taking it as evidence that women on the DPB are having more children (at the expense of the state).
excellent facts and figures, exposing the truth behind the govts need for reforms – NOW what is needed as a follow up is an equally in-depth article exposing tax fraud at the highest corporate level down – expose how govt don’t enforce this like they do ordinary people – and beneficiaries,
the money these multi million dollar corporates de fraud the people of NZ could pay for welfare alone
A time limit of 5 years on a benefit. For consistency do you think they will also set a time limit on the lower tax brackets?
Thank you. And to Ideologically Impure for posting the link to this article.
Just…thank you.
Wonderful article – I agree that it should be getting a wider hearing! Was very refreshing to read, as I am one of these lovely people who made the ‘lifestyle choice’ of requiring the invalids benefit.
One thing that I find incredibly appalling is the lack of help that is given to people on the Invalids benefit to enable themselves to get off it. I have medical certificates to prove that I require to see a psychiatrist weekly. The cost of this is anywhere between $95 – $250 an hour, often plus GST. WINZ is only able to give people $58.90 for this kind of help! If they want less people on benefits, they need to do more to enable people who want to work to get help.
[...] Ten myths about welfare. Actually not via the mutants, but this is getting around. If you are in NZ you probably need to [...]
Sadly, TV3 have been hammering Community Max in recent days. The garden with one pumpkin…
Deb
One of the best articles about Welfare Myths I’ve ever read. Very comprehensive and informative.
National are showing their true colors now. It’s brand new beamers for the old boys and a stick for the downtrodden members of society.
I have an excellent academic background and work history, but I’m getting close to the 40 mark and have started to feel the effects of what I believe is age discrimination. I’m always overqualified, incorrectly qualified or told I would be bored with the job. This gets infuriating after a while.
I can agree with some of your assertions but others show a fundamental misunderstanding of the data.
http://lindsaymitchell.blogspot.com/2011/02/some-fundamental-misunderstandings.html
Gordon: Mature, balanced and absorbing. It even provided me with a new and necessary understanding of welfare and your approach in identifying its varying myths/shadows was enlightening and objective.
To other commentators: Vote with your fingers and send this link to your friends and colleagues and or post/discuss it on your own blog –
I’ll be back for more brain food.
Re Scott (and Repton) : There is no statistical evidence to support your fantasy that large numbers of young women have babies to get on, and stay on the DPB. To repeat : there is no statistical evidence of very young women making the DPB a lifestyle choice. The ratio of very young women on the DPB is very low and has been since 2005 at least ie. it is not a fashion trend. As for the claim that these young women then have more babies to stay on the DPB – again, there is no sign of this in the data. In fact, the ratio of DPB recipients with two or more children FELL between 2005 and 2010, from 51.5% to 47.9 %. Nor is there any sign of a statistical bubble elsewhere in the DPB figures, as would be the case if the myth was true.
Sadly, Ministers of the Crown and officials at MSD and Treasury understand well the causes and impacts of the low levels of benefit on beneficiary households particularly those with children. There has been plenty of independent analysis (and even my own work as a beneficiary advocate/soical policy analyst) showing to niggardlyness of the benefit rates and even with maximised supplementary assitance it is difficult to pay the accommodation subsidy to the landlord, heat the home and purchase decent food etc.
When the figures MSD use as “standard costs” in their third tier hardship assistance are assessed the fraud by the state on its poorest is exposed. The result is poor/declining child health and educational performance, rising indebtedness among poor communities, and dare I say it, a recruitment ground for organised criminals.
A great article Gordon.
More standard rubbish.
eg: ” the last two months of 2010″ unemployment rose…
Wow gee whiz, that just happens to coincide with when the universities close and the Government allows them to register for support aid. Either as new unemployed without jobs lined up or as students who are looking for temporary positions until the next year. Also it can often include a surge from people coming of seasonal retail work (for xmas rush).
So what are the answers?
You write the article coming across as an expert, and you’ve got some supporters who think you’re so wonder. Lets hear how you think you could support and make your reforms work. Then we can plaster them up and knock holes in them. It would be nice to put a bunch of your supporters together and make them live through your answer, and have you fund the system. Because money doesn’t just magically appear to support welfare … something which many welfare and workers don’t understand. Need does -not- equate to income. No matter how much your “wishes”/fantasies would have otherwise.
Also a large number of low income earners and unemployed don’t want to have to work. If you were an employer, and paid people from your pocket, and had to employ these staff you would understand. especially with the thefts and no-shows and the constant asks for more hours.
Been there when the welfare mums are shopping for more babies. It happens. Why strawman it by saying it’s prevalent.
And Welfare NZ has a _policy_ of poverty for the benefit people. It’s _Policy_ if you had half a clue you would know that. Why does it exist? Sure it makes it damned hard to get off the benefit. But it is used to stop it being a valid lifestyle choice. And Benefit and Welfare support should NEVER be a valid lifestyle choice. ever. Try visiting a few of those welfare mums, and making some suggestion – communal living, low cost housing, alternative income generation (admittedly the latter is usually pointless with the WINZ etc rates of deductions, but that’s a separate problem). And you’ll find no they don’t want to do it, it’s not what they want, they want their own place, no they dont want to take responsibility for their own lives, no they dont want to have to think out of the box. And dammit the government owes them a living (and a decent living standard at that) and they dont give a shit about what anyone else has to go through to make that happen.
This is a really thought-provoking article, thank you for writing it. I just wanted to know where you got the Maori unemployment figure of 36.7% from?
[...] has an excellent article busting more benefit [...]
Dear Gordon,
I am sorry if I offended you, but my comment was not purporting any ideological fantasy. I do not agree with the myth, and are concerned that you took from my comment that you did.
I honestly agree with the thrust of this post, and thought I was making a constructive comment. Let me try again. Rather than all of myth 5 I am referring to Key’s assertion that “significant numbers of very young women going onto the DPB and staying there for a life time.”
The data needed to overcome this myth isn’t about how many of DPB recipients are young women, but rather data that shows how many young women are on the DPB, as a proportion of the group. If only a small proportion of women under 25, for example, are on the DPB then that, when also combined with the exisiting data about length of time spent on the DPB will defeat Key’s assertion.
If only a minor precentage of young women go on the DPB (as opposed to study, employment, other income support) then its back to the proponents of the myth to explain what they mean by ‘significant numbers.’
So I’m recommending get that data to add strenth to your argument. Because the argument needs to be heard, and needs to be as watertight as possible.
Hi Gordon
Most people agree that in a civilized society, some form of State funded welfare is necessary. The problem we face in New Zealand, is the overwhelming numbers of Kiwis who have become dependent, either fully or in part upon welfare.
If you take a thirty year view, then I’m sure you will agree that the trend is entirely in the wrong direction, and is ultimately unsustainable.
Are we for example, that much sicker as a nation than we were thirty years ago?
Secondly, it is a simple fact that we get more of the behaviour that we financially reward. For a teenager with no academic qualifications, coming from a family of welfare dependence, the DPB along with housing and other allowances can look quite attractive.
While only a small percentage of *current* DPB beneficiaries are teenagers, the fact is that 30% of new DPB beneficiaries are teenagers. While we can afford the capital cost of the DPB, what we can no longer afford is the downstream cost of the dysfunction that is generated as a result of fatherlessness, and children raised in State funded poverty.
What percentage of last year’s child abuse victims do you think were being raised in welfare dependent homes?
What percentage of last years child neglect and abandonment occurred in welfare dependent homes?
What percentage of social workers are engaged with people dependent upon welfare?
What percentage of those who pass through our courts and justice system are products of welfare dependence?
Of the four separate recent incidents where police were beaten to within an inch of their lives, how many of those violent perpetrators do you think are associated with welfare dependency?
Now I do not have evidence in answer to all of the above questions, but there is enough evidence in the public domain to draw some very clear conclusions; that overwhelmingly child abuse, neglect, abandonment, and violence against the police is perpetrated by those with a background of welfare dependence.
This is no way to build a stable civil society.
Now good on you for attempting to expose myths where they exist, but let’s not pretend that a growing culture of welfare is anything other than destructive for medium to long term ‘beneficiaries’, and those on DPB in particular.
Functional families where the biological or adoptive father is present, is the best defense against poverty and abuse that any society can provide. Perhaps its time we begin reaffirming this model once again in our schools and communities, rather than the current message that states all forms of ‘family’ are of equal value, and by implication generate the same outcomes.
They don’t.
An excellent read, a pity this is not in the mainstream media. I guess they have more trivial issues to pursue.
Issues of unemployment, sickness and the DPB will always be with us to a lesser of greater extent. The underlying issue is how do you deal with such issues effectively? While I agree we need a welfare system, something tells me that giving people money for nothing is the worst possible option.
Peter Cresswell at NotPC blog cuts through Campbells spin and bolsters Mitchells response…
…”Sadly, in this first debunking of Campbell’s ten “myths,” neither mention either the minimum wage or the level of welfare payments themselves, which between them set a “floor” for wage payments above the market-clearing price that virtually ensures that labour markets will never clear. (Price any product above what the market will bear and you’re going to have truckloads left on the shelf.)
And in their fuller pieces neither Mitchell nor Campbell mention the three biggest welfare myths embraced by left-wing and right-wing welfare enthusiasts alike: i.e,
1. the notion that the economics of welfare states is sustainable; and
2. the idea we can all vote to make ourselves rich; and
3. the immoral assertion that you and I are our brother’s keepers.
It isn’t, we can’t, and we aren’t.”
http://pc.blogspot.com/2011/02/debunking-welfare-myths.html
@ Brenda
..”overwhelming numbers of Kiwis who have become dependent, either fully or in part upon welfare…..”
I think Gordon’s article clearly addresses that myth. There are NOT overwhelminmg numbers..
As for “…What percentage of last year’s child abuse victims do you think were being raised in welfare dependent homes? etc etc etc
What’s your point? That more crime is committed by poor people? Not true.
That benefits cause crime? I’d be interested in your research.
That providing a benefit to a person makes them violent? Are yo an Alchemist as well?
It’s a sad sort of world that Peter and James inhabit. Guess i should just buy a shot gun, build my fort and hunker down.
Jessica asked; I just wanted to know where you got the Maori unemployment figure of 36.7% from?
Good question. The official December 2010 figure is 15.5 percent according to the HLFS December quarter 2010 tables at NZ Statistics.
Also over 27,000 people on the DPB had added children to their existing benefit at June 2006. I have blogged the relevant table.
Hi Gordon,
Mostly I agree with what you have to say, but I’m always critical of anything I read, so I felt like sharing some thoughts.
Firstly, Myth 1. Welfare state opponents claim that more and more people are going on the benefit, and this is unsustainable. The response here is that the numbers merely reflect employment opportunities. You’ve given some figures for benefit recipients, but not for those in employment or unemployed for all the relevent periods. We’d need to be able to compare a ratio of employed:unemployed:benefit for a number of years in order to conclude that the number of people recieving a benefit was directly related to the availability of work. Tracking this against average wage, minimum wage and the value of the benefit would add clarity as to a cause and show whether or not people were on the benefit because it had greater comparable value to working.
Your reasoning around myth 3 seems to basically argue “Putting a time limit on the benefit means fewer people go on the benefit”. I understand the overall idea of trying to combat poverty, but for those on the other side of the political spectrum, this is -exactly- what they want to achieve. If people can survive without government money, why give it to them? I suppose the effects of poverty are beyond the scope of the article, but a brief summary of what you stated followed by a brief economic comparison of money spent on welfare vs money spent correcting problems associated with poverty wouldn’t go amiss here.
I too had to have a bit of I think about Myth 5. It seems to me the actual data needed to prove this is the age at which women FIRST went on the DPB, not the current percentage of women in a particular age bracket. It should be obvious that if “significant numbers of very young women [are] going onto the DPB and staying there for a lifetime” then you would see a small number of women in the young age gracket, and similar numbers in the age brackets to come. More information is needed to prove the point either way.
I think I could have a few more points, but I’ve probably already written enough for the moment.
It’s interesting that so many critics of Gordon’s position assume that the jobs that pay a living wage “must be” out there. In fact that’s the hard core of the opposition to Gordon’s arguments and conclusions. But in fact there is no “must be” at all, quite the opposite. If the wealthy in this country have invested in real estate for thirty years and let all our industry go to the wall, there’s no “must be” at all (and automation and Chinese competition have also played a big part). In fact, it’s remarkable that we have this much unemployment and low pay when a million NZers have already left http://thestandard.org.nz/the-next-million/; it shows the country must be really sick. So to put it brutally, we have too many mouths for the current economic structure, a bit like Britain in the hungry 1840s. Maybe we should encourage wholesale emigration to Australia while we still can? Of course ironically it would mean the decamping of most of NZ’s Maori population, but then the feral right think they’re the laziest of the lot and probably wouldn’t mind such an economicall-driven ethnic cleansing of New Zealand, assisted no doubt by Law’s eugenic policies. For isn’t all this just the old “lazy Maori” stereotype of 100 years ago? There are so many dog whistles in this ‘debate’ that it must be driving Fido crazy.
Do we get to vote Peter Cresswell off?
Is he allowed to translate that into English? Basically we should be on Chinese wages as this is what employers wish to pay? Is that your summation Peter?
The idea that we should be judged by how we treat and judge our weakest and most desperate is not a mythical concept, it was a central notion to NZ society.
And sorry- Brendan, did you read Gordon’s article? One thinks not.
What a great debate. Thank you to the internet, and Scoop. I choose to believe that despite the calamities discussed here we are today living in a far better world than that of even 20 years ago. Where then would this conversation have attracted its audience, and responses?
For me, Brendon highlights what I think is a common fallacy when he asks, “What percentage of … child abuse victims… child neglect and abandonment… of social worker engagement …of those who pass through our courts and justice system are products of welfare dependence?” – implying that it’s welfare dependency that creates these behaviours.
I don’t think this is so. Why should the state giving you money make you more likely to (for instance) abuse your kids?
Rather, welfare is more often a flag of one or more behavioural issues. If for instance you were yourself abused and have tried burying it under a carpet of drugs or some other escape mechanism, there’s an increased likelihood that under the stresses created by trying to cope with the added responsibility of children you may from time to time crack and act in ways that you yourself later find inexplicable and totally indefensible, and by the way, be less capable of finding and keeping a job.
Looking at it this way it is easy to see that people who are likely to abuse, neglect or abandon their children, or commit many other crimes, are likely to be over represented in the welfare system – but this doesn’t mean the welfare system made them this way. It just stands to reason that a greater proportion of life’s problem children will end up on benefits. That doesn’t make it their fault.
In the context of this discussion my key point is, playing with the welfare system isn’t actually likely to ever make the problem go away. Less or more welfare ain’t going to fix it. You’re addressing the symptoms, not the causes. We need to stop blaming the “welfare system”, and have the courage to look closer.
My belief is that the core issue is one of a now almost complete lack of a sense of community – with the communal peer pressure to ‘do the right thing’ that this old fashioned value creates.
The rapid growth of personal rights to the point where the international declaration on human rights is now held up as a new age secular bible, encouraged by a consumer based system that relies on growth (and don’t we have a RIGHT to a TV in every bedroom?), and cut lose from conventional morality by the proposition that in the pursuit of individual personal fulfillment ANY kind of behaviour is defensible – provided it’s not illegal – has resulted in an ultimately selfish world where every beneficiary is labeled a deliberate bludger, and every businessman a selfish prick – because the default position is, it’s everyone for themselves!
The largest changes are created by the smallest actions, repeated. Open a door, pick up that discarded bottle, ride a bike, smile at a stranger, believe in the power and importance of simple goodness.
We need leaders with true vision. No – we need to live in a SOCIETY with a vision, greater than any one person. I am in mo way religious – but I acknowledge the role religion has played in this respect in the past, and find it ultimately sad that there is no glue holding us together any more.
Welfare dependency? I’ll give you a real oxymoron: Economic leadership. Hah.
Thanks for this kind of honest report that we still have some sensible media in this country. While the leading TV channels, papers and online services are pre-occupied with stories of bias, the latest rape, murder and hold-up, the wedding between Prince William and Kate Middleton, the stories that really matter are only read by a few.
This article publishes what I know, am convinved of and that is really important. Does anybody else in this dumbed down country care though? That is the real problem we have. Ignorance, brainwashing, selfishness, materialism, bias and total indifference of far too many! Is this all to do with the brain drain to Australia and other desired destinations, I dare to ask?
On Scott’s comment about point number 5…
My flatmate is a solo mother of a two year old and is reliant on government money to keep her and her daughter alive. The notion of having another child to get more money would be laughable to her, because raising children is stressful, difficult, exhausting and life-consuming. Any extra money she would receive to raise her second child with wouldn’t come close to outweighing the difficulty of having two needy infants to deal with. Seriously, have you ever been in the presence of a baby or toddler for a few hours? I’m surprised this ‘hoary old argument’, as it was so nicely put, even needs debunking.
Hi Gordon,
Thanks for a great article backed up by stats. I really enjoyed reading it, and it was a breath of fresh air to hear something other than the scaremongering of the current political arguments against beneficiaries.
Greatly appreciated.
Carl – ‘a large number of low income earners and unemployed don’t want to have to work’? Lots of people don’t want to have to work, but that’s not usually the reason people are on benefits! Have you conducted a survey of some sort asking people on benefits why they are there? This sounds like your opinion, backed up with nothing but your opinion.
I’m surprised this ‘hoary old argument’, as it was so nicely put, even needs debunking.
Agreed Stephanie. Then there is the idea that the DPB is for the mother, and the mother requires punishment.
The DPB is for the child being raised by the mother. Cutting off funding to that child may well punish the mother, but it would be far worse for the child.
The children supported by the DPB are citizens, not their parent’s chattel.
Thanks so much for this well written article! i will share it round
I think another thing to consider is the very utilitarian system of valuation being used to measure the worth of lives, as if people are only valuable because of the revenue they create, as if the only reason anyone should receive social welfare payments is because they are physically and or mentally incapacitated or need to use the hours of their lives that should be sold to someone with power to care for someone less capable. Life has inherent value, a system that does not recognise this is a system that stands against all life. Life is not expendable, but the system is, its time to broaden our analyses.
And Andrew Geddis brings the research to John Key’s latest on ‘lifestyle choices’ and benefits at Pundit.
I guess poverty, difficulties in paying for basics, causes tension. I have been bemused about the TV ad where the child knocks over a carton of milk…. the mother simply buys another…. If there are no funds the reaction may not be as placid as displayed in the TV ad.
The interplay between the adequacies of the main benefit and supplementary assistance (both on-going and one-off) and judging of WINZ case-managers (needed for discretion on hardship decisions) lead to stressed parents. It also leads to debt with loan sharks, poor diet, overcrowding… and media claims these realitiees are a function of life-style choice.
425,000 people on some sort if hand out.
Cunningly there is no mention for balance of the total number of people in work.
425,000 would be 10% of the whole population? 20-25% of the workforce?
Excellent, informative article rather than the hysteria you normally hear. Thank you – hope it’s widely read.
http://www.stats.govt.nz/browse_for_stats/work_income_and_spending/employment_and_unemployment/HouseholdLabourForceSurveyEstimatedWorkAgePopulation_MRDecember10quarter.aspx
ok so I stand by the comment 3.4million workers. But again if I’m being picky just hiw many people in the 3.4m are on WFF?
And why is that acceptable.
Thank you for a well documented article. We probably all know the basics of all this korero, one does not have to be a rocket scientist to know this, as we live this daily, and are more experienced in the knowing about this than those in government. To see, what is in our minds written out by people that can explain it, is great. The comments added, asked, ‘the missed’ questions or queries. They are very good reading too. So a big thanks to you all, for the great read. I got to this page from Face Book off Annette Sykes page.
Just wondering whether the EMA benefit was considered – its the same as the DPB but for solo parents 16 and 17?
Excellent article, Gordon. I’ve linked to it on http://www.brianedwardsmedia.co.nz where there’s a debate going on about ‘poor choices’.
[...] read heavily from an excellent blog post of Werewolf.co.nz entitled Ten Myths About Welfare: http://werewolf.co.nz/2011/02/ten-myths-about-welfare/. Please check it out as it is a detailed and brilliant [...]
“Do we get to vote Peter Cresswell off?
Is he allowed to translate that into English? Basically we should be on Chinese wages as this is what employers wish to pay? Is that your summation Peter?”
Peter supports FREEDOM…not entitlement based slavery of some to others justified by so called “need”.
“The idea that we should be judged by how we treat and judge our weakest and most desperate is not a mythical concept, it was a central notion to NZ society.”
So what do you call it when some Kiwis are enslaved to others simply because they are better off materialy? A truely civilised society protects peoples individual rights from force and fraud….even if the force and fraud is commited in the so called “public good”.Theres no need for a state welfare system….most Kiwis give over and above the tax theft now privately without needing a gun held to their heads by the bleeding hearts.If allowed to make the choice about where and with who their aid dollars are spent Kiwis would ensure no one in genuine need would go without…but the bludgers and professional dependents would get short shift.
James there is no need for privitising social welfare.
if you lay claim to be civil then don’t call people that do not want the” welfare reforms”/cuts and privitisation, bleeding hearts.
Empathy and understanding does not require an insult, just as the poor do not deserve your use of the bludger label.
Maybe you can also save words like ‘professional dependents’ for the players in the big financial bailouts and the recipients of the Kiwi taxpayers generous guarantees.
@ James, #50
“…most Kiwis give over and above the tax theft now privately…”
Just so we’re clear, you are claiming that most kiwis give more in donations, than they are taxed? Or I have misunderstood?
great article, being shared around.
Wouldn’t it be great if there was mainstream media discussion of this?!
to the rednecks why dont we bring back work houses.Under these rightwing reforms that were supposed to bring greater economic growth we have seen nothing but stagnation the export of jobs and the import of debt.During the 1998 economic meltdown argintina followed one of the above rednecks solutions got rid of welfare altogether including the pension, unemployment went from 6% to 38% good one.hitherto they ditched that idea and many other silly rednecked unresearched policies that are still pushed by act and others
I’d love to hire more people. Wouldn’t that be a good thing.
But I don’t make enough margin to cover the cost.
I got lots of bits of jobs. But how to find staff who have the skillsets? That for once will actually see the job through? And properly, not the usual kiwislackness. Who will actually concentrate on the business needs not themselves.
But gosh, I’m sure taxing me more should give me plenty of extra funds to pay the bills and hire more staff?!?!?
Anyone get the feeling this is just the beginning of the squeeze? All these people who bemoan beneficaries will inevitably find themselves in the same position. By 2050 they say the planet will be unrecognisable. (NZ Herald) The best chance of survival is compassion and helpfulness towards each other.
I find it ironic that most modern people would agree nowdays that a woman shouldn’t stay in an abusive relationship and yet women are looked down on for being on the DPB. As for working, it has to be worthwhily, the childcare needs to be free and the maximum child-support obtained.
In my situation it is no longer worth trapsing off to work as my expartners child support payments were reduced by IRD after he succesfully applied for a review to include his 2 stepchildren as dependants, therefore significantly reducing his payments to me. (His partner doesn’t work.) The huge disparity between our incomes got even wider.
I have to ‘go without’ in financial terms, but the silver lining is I get more precious time with my 2 year old son.
Here are my thoughts on this: There brief because I am at my lunch break. I would be interested in your feedback – especially if you disagree.
I read a bit of it. Sounds like the Stephen Jones ( the rugby writer). Use something that is true and sneak in something that is untrue – then put your spin on it. He is drawing some assumptions from his research. a few people have pointed this out on his forum . Here is my view on some of his points:
a) the extent of poverty among beneficiaries and low income workers and its effects .
walk into most of these peoples homes you will find the sky decoders, and 3000 lounge suites on HP. Just people making bad decisions. If this is not the case there is always something WINZ can do as long as the bad choices stop.
(b) whether benefit levels can sustain basic living standards vis a vis rising costs, and the related health outcomes, particularly among children. See above.
(c) the cost and optimum form of work and training schemes for the young unemployed.
If they show up to jobs and can’t be employed, and there is evidence of this then I would bet my house that they won’t be penalised.
(d) the availability and affordability of childcare, region by region . Again, if its obvious there is a shortfall , WINZ can do something. Why – because its cheaper to subsidize a fulltime worker than support a fulltime beneficiary.
(e) the global recession’s impact on the job market – If there is evidence of no jobs then I am betting the job seeker will not be penalised.
(f) the adequacy of the government’s current job creation policy.- See E
(g) the job outcomes attributable to the government’s stimulus policy during the recession.- See E
(h) changing social attitude to marriage breakdown and divorce, and the implications for DPB figures. Good point.
(i) the social and economic value – including opportunity cost – of parenting carried out by DPB recipients Good point.
(j) the net cost of work schemes as opposed to the health costs and law and order costs that are unemployment –related. So if we make you look for work then you threaten us with committing crime.
(k) the extent to which demographic factors such as the ageing population are being reflected in the sickness and invalid benefit numbers…etc etc – Tell that to the paraplegic in a wheel chair that wants to work.
Thank you for a well reasoned and thought out argument Mr Gordon Campbell.
Oh our poor country! The hatefulness and vengefulness and blame! More and more people in jail for longer, squeezing beneficiaries tighter and tighter… What has happened to the mood of our country?
I’d like to subscribe to werewolf, any chance of a changing you bank account to Kiwi bank?
Simple. if the poor are poor and wish to be rich, get off your ass and get a job. I work 2 jobs so i have a little extra, but id gladly give it up if someone wanted it.
Interesting article , unfortunately you seem to be the only true thinking investigative journalism around.Interestingly I see that even with our unemployment figures that “skilled” workers are still being brought in from overseas. According to my MP it is because they cannot find the skills here. When I pointed out to him that I could find those workers but the firms involved would have to meet their “market” rate he suddenly stopped believing in the market setting the rate , apparently employers set the market rate…interesting way to turn the capitalist catchcry.
Ever thought that pollies salary increases should be tied to the lowest wage rise instead of the highest salary rise…suggest it to your MP , after all , you are his/her employer
Yeah, they are planning to wipe out a certain percentage of the world population to prevent global warming(this is bill gates pet project)and if people won’t work as slaves they’re already making robots that will.
The people who claim we need to squeeze beneficiaries have got the equation entirely the wrong way around. We don’t need to punish the victims of our poor economy, we need to invest more in growth and help create the jobs that will lower unemployment. When labour were last in government, we had record low unemployment. That was because the economy was doing well and there were jobs to get. Unemployment has not shot up because everyone’s suddenly become lazy and morally corrupted, it has shot up because jobs have dried up. That shouldn’t be hard to understand, but the conservative mind world-wide seems to prefer slapping a quick label on a problem (‘dole bludger’, ‘PC gone mad, ‘nanny state’) rather than spending the time to actually think about any problem in any real depth. And these people vote – which is the real key to why we get this moronic rhetoric from the government.
National stopped the Research and Development funding that Labour had put in place. National has stripped funding for early childhood education. National stopped the national superannuation fund in the first instance and has subsequently stopped investing in the Cullen fund – these funds provide a lot of capital to invest in NZ companies. All of these things promote growth. But what do we get? Borrowing for tax cuts, a ‘job summit’ that was a pure toothless talk fest, a non-existent cycle-way to cure our ills and pointless spending like replacing the govt BMW’s. Next, we’re going to sell of our (currently very productive) state assets. What a bunch of morons.
“Wow gee whiz, that just happens to coincide with when the universities close and the Government allows them to register for support aid. Either as new unemployed without jobs lined up or as students who are looking for temporary positions until the next year. Also it can often include a surge from people coming of seasonal retail work (for xmas rush).”
It also coincides with the aftermath of the Sept 4 earthquake…..
Unemployment Insurance seams a good Idea. But when one becomes unemployed will the payment be taxed? Like when one borrows money from the bank, then latter the loan is reassessed you pay “Income Tax” if the overall loan is reduced.
Welfare Reform is only part of the solution. What about Tax, Education and Welfare together?
What about Single people (mainly males (25-55)) do we exist? It seams that the government thinks that. I my self am unemployed, the recent tax change made no difference at all. If Labour Party gets in; Phil Goff said that he [may] cut PAYE for the low income earners (<$5,000 pa) so what? Does it mean that I will receive an increase (Currently the tax I'm paying on my benefit) as my increase, I don't think so. I may still receive the same now even the same next year…
No privitising or bringing in Unemployment insurance doesn’t seem like a good idea.
Unrelated….
blue/green russle proposing a new levy right now is not a good idea.Instead why doesn’t the lottery commission do a lotto with all proceeds to Christchruch quake rebuild fund.
Thank you for some balance in your article,it’s something you never get from the MSM.I found this article online the other day about Neoliberal Capitalism and i found it VERY illuminating especially the last point as follows-
ELIMINATING THE CONCEPT OF “THE PUBLIC GOOD” or “COMMUNITY” and replacing it with “individual responsibility.” Pressuring the poorest people in a society to find solutions to their lack of health care, education and social security all by themselves — then blaming them, if they fail, as “lazy.”
http://www.globalexchange.org/campaigns/econ101/neoliberalDefined.html
I had a very sucessful business which relied on financing so with the collapse of those companies prior to the recession down went my business.I am not prepared to jump through hoops for a benefit so i do my best to support my family with odd jobs and my wife works 2 partime jobs as both of us were unable to find fulltime work.Even if i could have found work it wouldn’t have supported the debts i had previously($2k per week).I am so sick of people harassing me for money i don’t have and even affording the basic needs of life are a real struggle.The people on the other end of the phone care nothing about me or my family,i am at the point where i just want to withdraw from this corrupt corporate controlled world and i feel Gerald Celente is right”when people lose everything and have nothing else to lose,they LOSE IT!
It all reads like it came out of a US comic book about Clinton and welfare. America did a very poor job of taking care of its needy people. Do not fall for the “crap” that happened here. A friend in the US.
Yes great article, I read all the comments and I would just like to say to Heather that I was on the invalids last year, and I’m still an invalid!, but at winz I got a bad angry case worker, she sent me for work assessment doctor 200k away from my home who without my medical records, or consulting my GP said you are going to be put on sickness which is $50.00 less, At this assessment he told me that my hands were curled from arthritis, This directly conflicts with my specalist, who said that it was caused by a neck accident and the nerves will never recover, and the muscles are weak and to not over stress them as this will directly cause cramping. Like after 5 mins even walking instant cramps. Cannot hold anything for long in hands,very weak.
So I am left with intractable nerve pain,IBS bowel/bladder problems, Fibromyalgia and chronic myfascial pain syndrome, and yet I am on a temporary sickness benefit, They can and do take people of the invalids benefit, so dont think that, if you have permanent condition, winz can change that, saying that you are well enough to work, as my case demonstrates. I have been to 3 of their designated doctors over the last 12 years and they say that I should not be working but now This new work assessment doc says Im cured, Im told by winz that I cannot agrue with their assessment.
Wish I could afford to study to be a lawyer because I would sue their backsides.and the doctor for breaching the Medical codes about desigated doctors who dont consult with the patients GP. No one is safe from the unfair case managers, at winz so Please Heather be careful and be prepared to defend what you do get, I am not coping on the $194 a week I get, this can be you!!!!
Would be great if this was in the mainstream media…
..if we want people to become ‘stupider’.
There’s a subject that deals with this very issue, its called economics – you should read about it some time. There’s even a section on welfare! No way! Takes all the guesswork out, they’ve used maths and calculators and everything! Apparently government intervention (welfare) slows down job growth.
http://en.wikipedia.org/wiki/File:GDP_PPP_Per_Capita_IMF_2008.svg
What do the countries with high GDP have in common?
Your hearts are in the right place wanting to help people, but welfare doesn’t help. Remove barriers and let the innovators get on with making everybody better off.
http://www.youtube.com/watch?v=0TCH_VYHd2c
Hi Steve
What do the countries with high GDP have in common?
I don’t know. Not what you’re implying, as far as I can tell.
You can compare a variety of national statistics at http://www.gapminder.org. I can’t find a welfare spending there. If you use, for example, ‘Government share of total health spending’ as a proxy you get what looks like not special relationship. You’re welcome to try and find something better.
I won’t list the countries that, on their (2006?) data, seem to have the highest per capita gdp – it looks like it helps striking a whole lot of oil but but welfare is not a huge factor.
Steve “Remove barriers and let the innovators get on with making off”…what reality you live in?
You are talking about increasing social suffering, and you think you your taxes or costs will drop as a result?haha thats insanity…. your costs are, and will continue to, increase with the feconancial sqaud now roaming around greedily looking to privitise and control all public assets.
Its called economics(real not fabricated figures with the costs shifted under the mat) stevie.
Create jobs! …..thats inovative Steve why isn’t it being done now there?
No barriers to the govt creating jobs.
So show me the inovation Steve, show me the Jobs.
http://www.odt.co.nz/news/national/150846/changes-ece-size-raises-concerns
And now the good government having promised quality childcare for our women being forced out to find work, cleaning toilets that is ever so much more important than looking after their own children, is now going to change the rules so that the 50 babes in arms/children can/will be increased to 150 per childcare centre – that’s right folks – get your chain gang baby care here.
Also, I read there’ll be one minder to 50 babies and children.
PS Notice I said ‘minder’ not quality care teacher.
.
Is that their idea of innovation… “get out the way and let us remove jobs of skilled childcare coupled with creating unsafe care of NZ children”.
Selfish corporate greed is not innovative – these proposed reforms are antisocial .
These so called welfare reforms might save the government money in the short term, but will cost the country in the long term. If people are unable to get welfare a small amount will turn to crime to get it and the cost of insurance, policing, legal costs and running prisons will go up. Of those that do not turn to crime the cost of heath care for them will dramatically climb due to lack of nutrition and due to them not getting minor heath problems seen to before they get worse. National Governments in the past have cost this country a lot of money by selling off our valuable assets to their rich mates at bargain basement prices to fund tax cuts for the rich and then having those assets run into the ground as the buyers rake in the profits and return very little if any back into keeping them running. Just look at how Labour had to buy back kiwi rail to prevent it being run into the ground any further after it was raped of all its money by so called investors who spent little on reinvesting in it infrastructure.
Joe you are quite wrong and you know it. Opposition and critisism of policy that forms our society (and have no benefit to the national economy) is the citizens duty. It is not for you to decide who’s feedback is contributing.
You didn’t listen to what I said anyway in your rush to vindicate and defend stupidity.
Politics is a lifestyle choice driven by will to power. I imagine you build up stress then vent at the little citizen, the smaller and more defenseless the better.Like the welfare reform ideology.
At last, an evidence based article to combat the stigmatisation of single mums. I am so sick of being stereotyped. Well done. Please, please, try and get this out into mainstream media. There are not many people batting for us. Julie.
I was on the dole last year for 12 weeks after loseing my job i eventually found another one which lead me to full time employment unfortunley some of the other people their decided that 2 weeks would be enough for them or they just wouldnt bother turning up at all sometimes and were only doing it so they could stay on the dole. I was quite dispointed as even though i did not enojoy the job i kept at it as i needed the money and i hated not working, yes my wage was minimum but i was quite able to with good budgeting survive quite comfortably on it.
Gordon – Thank you so much for this article.
I wish policy makers/breakers would attempt to be as vigilant with their ‘interpretations’ of the facts.
@Steve – your cynicism and belittling is ingenious. really. Yet you quote wikipedia and youtube, two of the most reliable sources available.
wow….interesting reading. and full of some very scary opinions for someone like me. i had a major stroke as a result of an accident ending up in critical care, my hospital stay was 3 months. i had to be taught how to swallow, how to cough, how to speak, and how to ‘walk’ again. in a 5 minute test requiring me to name as many animals as i could i named one…an aardvark oddly enough.i have to sleep every afternoon or at least lie down or i become dangerously fatigued…i can’t cook safely without supervision…i was left with very little short term memory and my brain damage makes me slow thinking, over-emotional and slow reactioned meaning i can’t drive or learn amongst many other things. i’m on the invalids benefit…but not for long if paula bennett has her way. i was forced to supply winz with 5 years of medical records, neuro-psychology records, and neurologists records to prove my inability to work….it wasn’t enough for them and i was promptly sent to a doctor to fill out a medical report. the doctor of course thinks i am able to look for work now…and i’m certain in time they will force me to apply for jobs i haven’t got a shit show of getting. i’m 44 and very disabled….will someone give me a job please?
LOL – the thing is, all Governments cannot afford Welfare programs in the long run.
And yet, there are not enough jobs for everyone to have.
All those who believe the majority of welfare recipients are lazy and don’t want to work are deluding themselves.
But thats what happens when the system itself is flawed and ends in collapse.
Enjoy the ride downhill, everyone!
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Some great points. Bring in the 90 day trail period for politicians!
Our own government banks with Australian owned banks, leaves the legal door open for Australian business to make money in NZ without paying tax here (big loopholes that everyone knows about) and wants to introduce a lower youth wage – then complains about people leaving to live in Australia!
Rather than picking on the disadvantaged and poor(it’s easy to kick those at the bottom of the ladder….they are more likely not to vote….or perhaps some vote on the Maori role) here are some ways the politicians could generate revenue and at the same time and make things fairer
- the phoenix company law. Only ONE business has been charged with breaking this law since the law come in somewhere in the early 2000s. Yet, 100′s of business have done exactly that… a great deal of them Australian businesses wanting to get rid of their NZ tax debt so they can continue to generate NZ profits without having to pay.
- the parking fines law. While we can’t leave NZ without paying our small amount of parking fines, people and business that defraud the system and avoid paying (often millions of dollars worth) taxes can come and go freely. Stop these people being able to travel until they have paid. As you can imagine those finance company Directors would suddenly cough up the money if they weren’t able to travel to their Hawaiian beach houses.
- help fix the superannuation problem by reducing cash payments but keeping state assets and using them to give our old or sick people free power, phone/internet, public transport, water etc. These state owned assets are ours and should be used in the public interest.
There are many more suggests that I could add to the obviously ones like Capital Gains tax, but I don’t have time right now….
The point is if NZ really wanted to get tough on system abuse, then the most income generating place to start would be (John Keys friends) corporate tax avoidance and corporate crime….especially overseas companies/overseas trusts etc.