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24 January
05
Shifting NZers off
welfare and into work
Welfare
– or more correctly – welfare dependency is an area that
causes unease in most New Zealander. It profoundly affects not
only the shape of our society but the direction and fortunes
of its citizens. As the single largest single area of
government expenditure, welfare also divides the country along
ideological lines separating those wanting big government and
more dependency from those who believe in limited government
and less welfare.
There
is no doubt that our welfare system is now in urgent need of
review. Not only is it riddled with fraud and abuse – to the
point where almost everyone knows someone on the take – but
also more importantly, the evidence is now unequivocal that
growing up on welfare damages children.
In
spite of this, incentives have been created in the welfare
system that mean women with children are better off on the
Domestic Purposes Benefit than they are living with their
partner. By undermining families, the DPB has been disastrous
social experiment. Sadly it is children who have born the
brunt of this political failure, with one child in four now
being raised in a home supported by only one parent instead of
two.
Unfortunately,
facing the difficulties of raising a family on their own,
welfare has enticed far too many sole parents to reduce their
aspirations down to a weekly benefit cheque. It’s imperative
for the well-being of these mums and their children that that
the system is changed so they can lift their sights, get a
job, and get their lives back on track.
It
is also incomprehensible, that in spite of the present
critical labour market shortages, there are still more than
310,000 adults and 200,000 children dependent on
taxpayer-funded benefits. The founders of the welfare state
envisioned it to be a hand up to work, independence and a
better future. It needs to be returned to that original
purpose, transforming what has become a culture of entrenched
welfare dependency into an opportunity society.
Based
on successes both here and overseas, I suggest that the time
has never been better than now to overhaul the welfare system
using the following five principles:
·
Introduction
of a single benefit
·
Annual
benefit re-application process
·
Time
limited work-search period
·
Pro-active
case management
·
Full-time
work-placement programme
Firstly,
to simplify the benefit system and send a clear message to the
able-bodied that welfare is only available for temporary
assistance in times of need, all benefits - including the
dole, the DPB, the sickness benefit and the invalid benefit -
would be replaced by a single ‘temporary’ benefit. There
would, of course, be exemptions, especially for those with
permanent disabilities who will never be able to support
themselves. For that minority of citizens, welfare should
provide on-going security and be generous enough to provide a
decent quality of life.
Secondly,
an annual benefit ‘re-application’ process should be
introduced. This means that on an annual basis everyone will
be required to re-apply for their benefit in order to reduce
the widespread fraud and abuse that presently blights the
system and to ensure that everyone is receiving the
appropriate level of assistance.
Thirdly,
a ‘time limit’ on welfare should be introduced once
beneficiaries are classified as being fit for work. This would
take the form of a six-month “work search” period during
which time they would be free to find a job in their own way.
Step
four of the system is designed to help those people who, after
six months, have been unsuccessful in finding a job. They
clearly need professional support and will be provided with
that through a pro-active programme of case management. The
objective is to assist them to overcome their individual
barriers to work. In some cases, it may be the advice of a
financial planner that is needed so they can get their
personal finances under control, or help with child-care,
transport, relocation, or an interest-free loan to buy the
clothes or tools needed for a job.
This
pro-active case-management process will operate in conjunction
with the fifth step of ‘work placement’. For those who
have spent six months hunting for a job unsuccessfully, work
placement will involve 40 hours per week of work, training, or
job search. This full-time programme will be designed to help
them gain the habits and skills of the workplace as well as to
engage them in the kinds of informal networks that often lead
to a job.
The
key to the success of this five-step process is getting the
incentives right: sending a strong signal that welfare in New
Zealand is there to provide work for those who can and
security for those who can’t. The system is designed to help
people to help themselves into a job and independence from the
State. The key requirement of the welfare department is to
ensure that beneficiaries receive the appropriate level of
professional support that will enable them to become
work-ready and get a job.
Further,
this re-vamped system will eliminate intergenerational welfare
dependency and its associated problems of social exclusion
that for too long has been allowed to blight the future of
generations of children.
Finally,
this five-step process will dramatically reduce the fraud and
abuse that has plagued the welfare system. As a result,
welfare costs will decrease, providing an ideal opportunity to
lower the tax burden on working New Zealanders. This in turn
will boost the economy and improve the standard of living for
all families. It is the key to taking the country onto the
path to prosperity that should rightfully be our destiny.
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