The domestic purposes benefit should be axed to discourage young women from getting pregnant, a Business Roundtable paper on Maori and welfare argues.
Other radical options discussed by its author, Wellington welfare commentator Lindsay Mitchell, include replacing state-funded unemployment benefits with private insurance, replacing some benefits with loans, and regionalising and privatising Work and Income.
Under a privatised system, competing operators could be given incentives to reduce the number of beneficiaries, she suggests.
Prime Minister John Key had not read the report yesterday but said it sounded "pretty draconian".
Social Development and Employment Minister Paula Bennett said none of the ideas were on the agenda for the Government.
The report is the fifth working paper on Maori from the Business Roundtable, which represents the interests of large businesses and whose membership is dominated by the chief executives of major firms.
Previous papers have looked at the Maori seats in Parliament and Maori economic development.
Mrs Mitchell said yesterday the welfare system had "hurt Maori more than other New Zealanders, and will continue to do so".
"In particular, the practice of paying for single parenting, substituting the state for whanau, has perverse effects on people who will continue to feature heavily in statistics that describe the worst aspects of life today."
Her report links a Maori marriage rate "much lower" than the general population to higher reported rates of child abuse. It also points to teenage birth rates among Maori being higher than Pakeha.
She says the priority for Maori should be stopping the flow of young people into the welfare system. "Crucial to solving dependence and all the attendant problems is preventing more young girls from entering the system that traps them.
"That means discouraging them from getting pregnant in the first place. To that end, the DPB should be abolished."
She describes DPB recipients as "a job-creation opportunity going begging", saying about 50,000 have only one child, while New Zealand has a "serious shortage" of private childcare.
But Susan St John, a Child Poverty Action Group spokeswoman, said the ideas were radical and punitive.
Educating young women about family planning and giving them increased opportunities to train were more helpful.
43,258 Maori were receiving the domestic purposes benefit at the end of June 41 per cent of all recipients.
In total, 97,814 Maori were receiving one of the main benefits 32 per cent of all working-age benefit recipients.
Of 104,400 people on the DPB, nearly 90 per cent were female.
49,557 of all DPB recipients had one child. About 40 per cent of one-child parents receiving the DPB were Maori.
SOURCE: Social Development Ministry, figures to the end of June 2009.
- REBECCA PALMER/Dominion Post
Would you vote for Lianne Dalziel for Christchurch mayor?Related story: Christchurch mayoralty race heats up