Editorial: Welfare system past just patching up

Last updated 05:00 14/06/2010

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OPINION: A society can be judged by how well it looks after its most disadvantaged members. It is equally true that there is no such thing as a free lunch. Both are good reasons why it is past time for the Government-appointed Welfare Working Group's re-examination of welfare in New Zealand.

Despite the $4.8 billion that New Zealand spends on welfare each year, it is not caring well for its disadvantaged.

Something is clearly wrong when 324,814 working-age people – 12 per cent of the total – were on a main benefit on March 30 this year. Worryingly, nearly a third of those had been on the benefit continuously for four or more years.

New Zealand cannot afford to leave things as they are, either financially or socially.

As the population ages, and pension and healthcare costs climb, and the proportion of the population that is of working age falls, the current levels of spending on welfare will become unsustainable. Nor is it healthy for society to have a fifth of children brought up in homes in which the breadwinner is a welfare beneficiary. That is to risk creating generations of welfare dependency.

It is facile to say that the problem is too many bludgers. There are some who believe they are entitled to choose the unemployment benefit as an alternative to paid work, and some who regard solo parenting as a legitimate career choice, and some who enjoy the fact that being sick enough to get the sickness benefit does not make them so sick they cannot pursue a career in crime.

There should be no compunction in removing benefits from them – it should never be forgotten that the money for the welfare system is taken from working New Zealanders, and the Government has a duty to make sure that it is not handed over to the wilfully indolent.

However, the vast majority treat welfare as a last resort. The problem is that it can also become a trap, too hard to escape.

The working group will have to be more practical than the much-ballyhooed Royal Commission on Social Policy, which reported in 1988, but which resulted in nothing beyond a five-volume report regarded by most as useful as a doorstop but little else.

Working group chairwoman Paula Rebstock is wise not to rule anything out. That leaves open changing the eligibility criteria for benefits – something some believe is the best way to reduce the number of long-term beneficiaries – or imposing time limits.

There is also the option of moving to a two-tier system based on a social insurance model with a secondary minimal safety net. That is the approach taken through much of the rest of the developed world.

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There are fish hooks in all those. On top of that, it will require that hard political choices are made for radical change to happen.

Although it is easy to create new entitlements, it is inevitably unpopular to tell people that something they had is to be taken away from them.

Radical change is what is needed, however. An ad hoc approach of patches to the present system is not working.

- © Fairfax NZ News

3 comments
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trish   #3   05:42 pm Jul 09 2010

Having to rely on a benefit is not the first choice for many of us!!! Who in their right mind would throw away a job of $35,000 PA to exist on less than $11,000 pa. Beneficiaries DO actually contribute to the tax take, & due to the minute size of their income spend it all weekly and therefore contribute. GST, ETS and all the other taxes the govt throw at us. We are not supposed to own a private motor vehicle, but rely on the goodness of others to help. Govt again taking advantage of the volunteers in our community. UP NATIONAL, they need to get a real job or even life.

Bruce   #2   07:10 pm Jun 14 2010

There is a parallel between the claims made about benefits and the minimum wage. Those who say that people are only on the minimum wage for a short time, so it does not need to be increased, also say the same about the benefit levels. The same people who say of the hundreds of thousands on around $15 an hour or below (half the median income) are only there a short time, then say that we have a beneficiary problem because of the number on benefits. Yet, in fact, the turnover on benefits is actually higher. I suppose no committed ideologist lets the facts get in the way of a radical reform.

There is a parallel between the claims made about benefits and the minimum wage. Those who say that people are only on the minimum wage for a short time, so it does not need to be increased, also say the same about the benefit levels. The same people who say of the hundreds of thousands on around $15 an hour or below (half the median income) are only there a short time, then say that we have a beneficiary problem because of the number on benefits. Yet, in fact, the turnover on benefits is actually higher. I suppose no committed ideologist lets the facts get in the way of a radical reform.

Those advocating reform based on the numbers on benefits, relative to the size of the working population, have to consider the principle of consistency in the matter of Super cost. Particularly when the increasing numbers on IB and SB are related to ageing of the population. They should also note that we are not alone in facing the demographic pressures involved. It is not honest to single out beneficiaries as a wedge for a radical reform to prepare the way for the (for now untouchable) Super issue later.

We all know how the numbers on benefits can be reduced: it’s by creating jobs and making available opportunities for people to train. We recently had fewer than 30,000 on the UB and the numbers on the DPB were falling as well. If growth were not checked by the RB response to the housing bubble we would have progressed further.

Getting mean is not a policy it's an expression of an attitude towards an underclass. So some want to use impersonal market forces (term limits etc) to wash our hands of these people and let private investors build more prisons ... . Why did we contend against one foreign anti-human ideology during the Cold War to succumb to another afterward?

Miles Lacey   #1   12:55 pm Jun 14 2010

Oh great, another lecture about welfare bludging by a self-righteous prick who hasn't got a clue what it's like to find work while on welfare and yet another working group set up by the government made up of bosses, senior bureaucrats and others who are clueless about the problem who'll produce yet another doorstop that will simply say "Kick the bludgers harder". ENOUGH ALREADY!

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