Editorial: Proof will be in employment stats

Last updated 05:00 29/02/2012

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OPINION: The first Labour government's landmark social security legislation, passed in 1938, was driven by the noble ideal that people who are temporarily unable to support themselves are entitled to a reasonable standard of living.

Those pioneers of the welfare state would never have envisaged the benefit system New Zealand has today.

They would have been appalled by the thought of thousands of perfectly healthy adults spending more than a decade on the dole and thousands more 16- and 17-year-olds being paid to sit around and do nothing.

To them, figures showing one out of every seven people of working age is on a benefit, with 220,000 children living in welfare-dependent homes, would not have been a sign of the success of the system they championed, but of its abject failure.

National's welfare reforms, due from the middle of this year, aim to address this sorry state of affairs by placing new requirements on all beneficiaries who are fit to work. The requirement on them to make honest efforts to find work is a welcome move to restore the balance in the social contract that underpins the welfare state. Whether it genuinely addresses the most worrying aspects of benefit dependency, however, is far from assured.

There is reason to expect that measures to tackle the pressing problem of teenage unemployment, which can too easily lead to a lifetime of benefit dependency, will have an impact. Direct payment of essential costs such as rent and power and the introduction of smart cards for other living costs will be a wake-up call to those who thought dropping out of school and going on the dole was a good choice. At the same time, additional payments for undertaking further education or training will provide incentives to learn the skills young people need to be competitive in an increasingly technical employment market.

It is also likely that plans to require sole parents to start looking for part-time work once their youngest child is 5 and fulltime work once the youngest is 14, with payments for childcare and other incentives, will help encourage more of them to move into paid employment – something countless studies have shown will result in far better social outcomes for their children.

Critics who have branded the reforms "nasty" or claimed they spell the end of the welfare state as we know it have either not studied the detail or are deliberately misrepresenting the facts. The reality is that the Government is not threatening to cut or stop payments for beneficiaries who fail to get work, but simply requiring them to make honest attempts to look for jobs and accept reasonable offers that come their way.

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There lies the rub when it comes to the prospect of the changes succeeding. The claim that the reforms will directly lead to an additional 46,000 people moving off a benefit in the next four years, on top of the 20,000 expected to move into work anyway as a result of the economy eventually improving, seems wildly optimistic at a time when jobs remain scarce. The proof in the pudding will be how many of the 170,000-odd people who have at present been on a benefit for more than five of the past 10 years are in work come 2016.

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