A good start

It is widely accepted now that long-term dependency on welfare benefits should be avoided where possible, writes The Press in an editorial.

 Numberless studies have shown that while any benefit system worth the name must provide a safety net for those in genuine need, staying on a benefit for a long time is not good, by many measures, for society or individuals. The aim for policy-makers is to find a system that provides the essential safety net while at the same time giving the appropriate incentives to induce the able-bodied to provide for themselves by getting out of the benefit system and into paid work. Policy in this area should be cool-headed without being cold-blooded.

The policy proposed by National this week, which would alter some of the incentives currently in place, has been, perhaps predictably, denounced by Labour as a return to the policies of the 1990s and an attack on beneficiaries. It is hardly either of those things, although how effective some of the proposals would be and how they would work in practice may be open to question.

As National's leader, John Key, said when introducing the policy this week, it has an unrelenting focus on getting beneficiaries into employment. To this end, it would require single parents on the domestic purposes benefit to undertake 15 hours of employment, training or job-seeking activities once all their children were aged six or more. Similarly, sickness and invalid beneficiaries who have been assessed as being able to work part-time will have to put the same amount of time into either working, training for work or seeking it. Those receiving sickness and invalid benefits will also have to have more frequent assessments by their doctor and a compulsory second opinion from a government-approved doctor once they had been on the benefit for a year.

The policy is considerably less stringent than that National has adhered to in the past. From its 2005 policy, for instance, the party has abandoned the option of community service, or "work for the dole", and dropped the requirement that those on the DPB should work full-time when their last child turned 14. Its proposals on work-testing for those on the unemployment benefit are identical to the policy Labour introduced last year. National has also proposed some carrots to make work a more attractive option for beneficiaries raising the income threshold at which benefits begin to abate from $80 to $100 a week and providing for benefits to rise in line with the inflation rate. Even Labour critics of National's proposals say those are both welcome changes. Further, rather than simply cutting off a benefit to someone who failed to comply with the new rules, National's proposal would provide for a gradual reduction, aimed at nudging the reluctant into doing what was required.

The proposal that single parents on a benefit should at some point have an obligation to begin to look for work, if implemented, would not be extreme. Indeed, it would put New Zealand more in the mainstream of welfare thinking around the world. An OECD study in 2004 said that the DPB created poverty traps for single parents and criticised Labour for abolishing work obligations.

A later OECD study, addressing the notion that allowing single parents to stay out of paid work benefited their children, reiterated the organisation's belief that it was in the best interests of all, including single-parent families, to engage in paid work as this was the most effective way to reduce the risk of family poverty, enhance child development and give children the best possible start in life. Most countries require it. Australia has recently introduced it for single parents of children over six and a similar policy has also just been announced in Britain.

The test of any policy is, of course, how it would work in practice and this policy still needs to be fleshed out. As with the work tests that Labour has introduced for the unemployment benefit, there would be increased administrative costs with National's proposals and it is unlikely that any large savings would be made. If, however, it is likely the long-term social results would be beneficial, as the OECD suggests they would, then the proposals deserve consideration rather than kneejerk dismissal.

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