The centre-right’s enthusiasm for forcing people off the benefit and into paid work is matched only by the enthusiasm (shared by Treasury and the Reserve Bank) for throwing people out of paid work to curb inflation, and achieve the optimal balance of workers to job seekers deemed to be desirable to keep the economy humming.
In a throwback to the 1970s, National, the ACT Party and New Zealand First are competing for votes over who can concoct the meanest, most punitive set of policies to impose on people that rely on benefits for survival. The sick, the disabled? Make ‘em get out there and compete for work!
Supposedly, the transition to paid work can be achieved by imposing more stringent work tests more often, by devising harsher penalties for non-compliance, by placing restrictions around what benefit money can be spent on, and by placing term limits on how long people can access welfare support during their lifetimes, before they and their children are forced to fend for themselves.
Needless to say, there is no evidence – beyond the anecdotal – that a harsher welfare regime will help more people to become self-sufficient, but that’s not the real purpose of these proposals. The real aim is to reap political gains by tapping into the resentment among many underpaid, overworked voters that some-one else may be having an easy ride at their expense.
All up, we do seem to be quite a miserable, mean spirited bunch when it comes to welfare. The benefits we pay are already known to be grossly inadequate for people to feed and shelter their families – and we know this from the research conducted years ago by the Welfare Working Group. Also, as the work of Victoria University academic Lisa Marriott has shown, the justice system routinely continues to treat benefit fraud much more harshly than tax evasion, even though white collar tax criminals steal far more money from us. (To help pay for its tax cuts, National will provide relatively less funding to the Serious Fraud Office to chase down tax cheats.)
As mentioned, imposing a less accessible, more humiliating welfare system on low income New Zealanders will result in significant extra hardship for people already doing it tough. (Anyone who thinks it’s easy to live on a benefit should try it sometime.) In the process, the centre right’s plans would create a bigger, more dis-empowered, cheap labour pool. Under National, this more compliant workforce would also be vulnerable to being hired and fired at will by employers after 90 day “trials” before they can qualify for workplace protections and entitlements.
Keep in mind that overall, much of the labour market is shifting to less secure, more casualised forms of work. This is increasing the difficulty for those on benefits to find stable employment. Meaning: the tempo of movement back and forth between paid work and benefit reliance is steadily increasing – even as National is proposing to punish people (with stand-down periods) for not remaining in paid work.
In addition…. The centre right is also proposing to freeze the minimum wage for three years. The Fair Pay Agreements that have enabled the likes of bus drivers and nurses to organise collectively and bargain more effectively for better pay and conditions are also due to be scrapped by National and ACT.
What I’m getting at is that these harsh welfare regimes being devised to drive beneficiaries into paid work have to be seen in tandem with the harsh workplace policies that aim to dis-empower workers. Together the welfare/workplace policies being promoted by ACT, National and New Zealand First amount to an Exploitation Charter. No real surprise though, to find that the centre-right should be acting so nakedly in the interests of its corporate donors.
Footnote One. As mentioned, Treasury and the Reserve Bank have been actively seeking to raise and maintain the jobless numbers, even while the political system actively punishes the unemployed. Treasury’s ideal “natural” rate of unemployment (aka the NAIRU) sits somewhere between 4% and 5.5% which is slightly above the current jobless rate.
However that jobless rate is now rising in response to the Reserve Bank’s attempt to curb inflation by diverting household spending into higher mortgage rates, and by inducing firms to retrench by deferring investment and firing people. Economists have estimated that as many as 50,000 jobs could be lost in the process. In addition, and to help pay for National’s tax cuts, another 15,000 public servants are reportedly at risk of being thrown out of work.
That’s the cruel paradox. We have engineered, structural unemployment that the politicians are blaming on the feckless actions of individuals. Central government – and the central bank – are pursuing policies that will inevitably generate unemployment, increase mortgage payments, reduce wages and make access to the welfare safety net more difficult and more temporary.
Basically, the privileged are no longer bothering to hide their contempt for the poor. Bottom feeders, as our likely next prime minister once called them.
Footnote Two: So much for my hopes expressed earlier this week that New Zealand First – thanks to its hostility to neo-liberalism – might turn out to be a moderating influence on the centre right. NZF’s crackpot proposal for welfare term limits (Also advocated by the ACT Party) would impose a two year maximum on welfare access over the course of anyone’s lifetime.
This raises the inevitable question – and then what? What happens to solo mothers, to the chronically sick and disabled, to workers laid off during a recession etc. Etc after they have exhausted their arbitrary period of access to welfare support? These kinds of policies punish children for the actions of their parents. Does anyone really want to live in the society being envisaged by Christopher Luxon, David Seymour and Winston Peters?