Beneficiary bashing just too easy

National wants us to focus on the lazy stereotype of dole bludgers.

I'd like to start this column by making it plain I have nothing whatsoever against those on the public teat taking overseas trips on the taxpayers of New Zealand.

Prince William and Princess Catherine are a lovely couple, and I won't hear a word against them.

As far as I'm concerned, the estimated $1 million cost of their New Zealand visit is worth every cent.

What I can't understand is the Government once again making a song and dance about those other, arguably less photogenic beneficiaries who look to the public purse for their livelihood.

Beneficiary-bashing is, of course, a time-honoured political tradition. Like advertising, it's annoying, but it works. Who doesn't hate being ripped off by fraudsters who try to milk the welfare system?

What I hate more, however, is the dog-whistle to the small-minded, irrational envy that resides in all of us that someone, somewhere, is getting a better deal or an easier ride than we are.

In one of the more gratuitous examples of this, Social Development Minister Paula Bennett recently trumpeted that "more than 21,000 beneficiaries have had their income support cut for travelling overseas" since last July.

Bennett is apparently "staggered" by the number of beneficiaries who are travelling internationally without informing their paymaster.

"Every day we hear stories of how people cannot live on the benefit. Today you're hearing that literally thousands can not only live on it but can afford to travel overseas as well," she said.

Actually it isn't so much a dog whistle as a klaxon.

Bennett is saying, loud and clear, that she doesn't really believe beneficiaries have it tough.

And she's inviting the rest of us to join in and condemn anyone who dares complain.

Why might that be?

Bennett doesn't provide an answer, but leaves us to draw the obvious implication - the bludgers are heading off to lie on a beach under a palm tree.

I suppose it's possible a few may have actually done this, possibly falling to the temptation of easy credit with astronomical interest rates practically rammed down their throats by South Auckland loan sharks.

Given the relentless, grinding poverty most beneficiaries live in, I wouldn't blame them for snapping and worrying about the consequences later.

I suspect the vast majority, however, were seeing their families in Australia or the Pacific Islands; visiting grandchildren or sick relatives or attending funerals. Others may have been testing the job market in Australia.

Bennett didn't say how long these beneficiaries were away. There's a huge difference between a week with the family in Melbourne and shacking up in a South Pacific bolthole while continuing to draw a taxpayer-funded benefit.

She did, however, acknowledge that in most cases it was likely that the cost of the trip was funded by beneficiaries' wider families - which somewhat contradicted her stance that they were obviously getting too much support from the taxpayer.

I have no problem with the Government cracking down on abuse of public money - indeed, I expect it to do so. But I would like some perspective, and a little less histrionics.

It's estimated welfare fraud costs the country between $20 million and $40m a year. Tax evasion, about which the Government has much less to say, has been estimated to cost the country anywhere from $1 billion to $6b a year.

Why the double standard? Could it be that beneficiaries are an easy target? I hope it isn't that simple, because Bennett is a better minister than that, and should have more empathy with those at the bottom of the heap, given her back story.

So why else shout "look over there!" right at the moment? Well, Finance Minister Bill English provided one reason a couple of days later, when he acknowledged that Crown income receipts were about $1b below forecast, blowing a big hole in the Government's books and making it exceedingly difficult for National to deliver its much-anticipated "micro-surplus" in next month's Budget.

Coincidentally, a billion dollars is also the sum of money this government lost to South Canterbury Finance investors when it was forced to make good their deposits under the guarantee issued during the global financial crisis.

Three men who played leading roles in SCF are right now before the High Court, charged by the Serious Fraud Office with lying to investors, and to the Government to get into the Crown guarantee scheme shortly before the company collapsed in a heap of debt.

The massive loss of public funds is highly embarrassing to National, despite Prime Minister John Key's best efforts to blame Labour for setting up the deposit guarantee before it left office in 2008. While it's true the original scheme was Labour's, it applied only to the banking sector - the ill-advised decision to extend the scheme to the finance companies was made on National's watch.*

We all know what happened.

Nine finance companies fell over, at a cost to you and me of more than $2b.

Whether the Crown knew or should have known SCF was in trouble when it handed over the guarantee will be central to the fraud case now under way.

But the Government doesn't want you to think about this, let alone get angry about it. No. It would much rather you focused your attention on an ancient, lazy stereotype.

After all, beneficiaries can't afford defamation lawyers. And they probably don't vote National.


Finance Minister Bill English's office correctly points out that Labour's scheme did originally include finance companies, not just the banking sector. The admission of SCF was made on National's watch, although English's spokesman points out that the new Government had only just taken office, "so it is a complete stretch to say the new Government offered the guarantee to SCF''. 

Sunday Star Times