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11 February
06
Transforming
welfare
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Jamie
is 20. He has never had a job. He didn’t really have an
education either: because his mother never bothered with
preschool, he always lagged behind the other kids, and so
right from the beginning started playing truant whenever he
could.
Jamie
still lives with his mother and siblings. She’s on a
domestic purposes benefit, and has been on it for all of his
life. His real dad has been in and out of prison. Jamie
doesn’t really know him.
His
mother’s boyfriends have come and gone over the years. They
have never really liked him and whenever they moved into the
house, he tried to stay away as much as he could. Home was
always pretty chaotic – lots of booze and drugs, and never
enough to eat.
Jamie
is on the dole. His caseworkers say that he should go on a
training course, but he doesn’t want to. They can’t make
him go on the course.
Jamie’s
had a couple of job interviews, but he hasn’t been offered a
job. The employers don’t like his attitude.
He’s
got an “attitude” because he believes that he’s hard
done by. The dole is his entitlement, but it doesn’t pay him
enough to run a car and have a cell phone, CDs, booze and
drugs. As a result, he’s ‘forced’ to do some petty crime
on the side. He brags to the younger kids about the “jobs”
he’s done, and they look up to him. Doing crime makes him
think he’s cool. It makes him feel like a man.
Unless
Jamie gets a real job he has no future.
He couldn’t provide for a wife and children - no young woman
keen to make something of herself would want a partner with no
prospects.
But
Jamie is not alone. He lives in a state housing area where no
one works for a living. The children growing up in that
neighbourhood have no working role models. There is no one who
has achieved in education.
For
people like Jamie, the welfare system should offer a lifeline.
It should provide a helping hand into employment. It should
not allow Jamie to accept a lifetime of dependency. Nor should
it condemn taxpayers, struggling to make ends meet themselves,
to have to pay endless benefits to people who could and should
be working.
This week’s Household
Labour Force Survey (click to view
>>>) hides the truth about people like Jamie.
Although he’s on the dole and been there for some years, the
HLFS doesn’t count him as unemployed. Instead he is labeled
as “discouraged” and is not reflected in the official
unemployment figures.
Jamie’s
mate Matthew is almost 30. He too has been unemployed since he
left school, but because the local publican paid him for an
hours work unloading some crates from a truck, the HLFS counts
him as being “employed”.
The
Government crows about
New Zealand
’s low unemployment rate – currently 3.6 percent - but the
reality is that the picture painted by the HLFS is
ridiculously over-optimistic. By counting anyone on a benefit
who works for an hour or more a week as being employed the
number in employment is dramatically overstated. And, by
failing to count those on a benefit who have not been actively
looking for work as unemployed, the number of unemployed is
greatly understated.
Using
the HLFS figures, if the 75,500 “officially unemployed”
people are added to the 69,200 people like Jamie who are out
of work but don’t fit the HLFS definition of being
unemployed, then the number of jobless people in
New Zealand
rises to 144,800. Using that figure, the ‘unemployment
rate’ would be a more realistic 6.8 percent. If all the
beneficiaries like Matthew, who were only working a few hours
a week, were then added in, the unemployment rate would be
even higher.
Another
way to look at the state of welfare is to examine the benefit
figures published by the Ministry of Social Development (click
to view
>>>). The December quarter statistics reveal that
there are 302,083 working age people receiving welfare:
106,083 on the Domestic Purposes Benefit, 74,500 on the
Invalid Benefit, 51,426 on the Unemployment Benefit, and
46,862 on the Sickness Benefit. Of those, more than one in
four are Maori, and one in five have been on a benefit for
longer than ten years.
If
those DPB parents whose children are at now at school are
added to the number of unemployed, we are paying over 100,000
people who are able-bodied and capable of working to be on
welfare at a time when small businesses up and down the
country are crying out for workers. It is a dreadful
indictment of a welfare system that is clearly failing to
reduce dependency.
Welfare
should give people a hand up to work, independence and a
better future. It was never meant to allow Jamie and others
like him to choose to waste their lives and become a long-term
cost on taxpayers.
Professor
Peter Saunders and his colleague Phil Rennie of the Centre for
Independent Studies have authored a paper on the status of
welfare in
Australia
(click to view
>>>). What it shows is that the Australian
Government is more willing than ours to ensure that
beneficiaries, who are capable of working, get jobs.
Having
said that, both
Australia
and
New Zealand
have a long way to go to catch up to other countries around
the world that have taken a far more pragmatic approach to
welfare and put in place systems that work far better then
ours.
As
a Parliamentarian, my ambition was to become the Minister of
Social Welfare so that I could get our welfare system working
properly. However, the election and the democratic process put
paid to that goal! But for the record, you can read what I
would have done to fix the system (see below) – my
mission would have been to replace our dependency culture with
an opportunity society, providing a strong and generous safety
net for those in genuine need, and requiring people like Jamie
who are capable of working to get jobs!
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This
weeks poll. Do
you believe
New Zealand's welfare system is doing enough to eliminate
welfare dependency?
To take part in our online poll
>>>
Five
Steps to Transform Welfare
With
the present abundance of jobs, there has never been a better
time than now to completely overhaul the welfare system. We
need to urgently return it to the original purpose envisioned
by its creators of being a hand up to work, independence and a
better future.
Based
on successes both here and overseas, I recommend that the
following five principles to reform welfare be implemented:
-
Introduction
of a single benefit
-
Annual
benefit re-application process
-
Time
limited work-search period
-
Pro-active
case management
-
Full-time
work-placement programme
Details
include:
1. Introduction of a single benefit
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 domestic purposes benefit, the sickness benefit and
the invalid benefit – should be replaced by a single
‘temporary’ benefit. This will be categorized according to
the status of the beneficiary: jobless, a single parent with
dependent children, or unable to work due to sickness or
disability.
Exemptions
from the need to look for work will be applied to single
parents with very young children, those who are too sick to
work, and those with permanent disabilities who will never be
able to support themselves. For that minority of citizens,
welfare must provide on-going security and should be generous
enough to provide a decent quality of life.
Further,
due to concerns over the dramatic rise in the number of people
of working age who claim they are unable to work due to
sickness or disability, a designated doctor programme will be
introduced along with intensive case management which, like
ACC, will be able to access capacity in the private sector to
fast-track people back into the workforce where appropriate.
2.
Annual benefit re-application process
Secondly,
an annual benefit ‘re-application’ process will be
introduced. This means that on an annual basis everyone will
be asked 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.
3. Time
limited work-search period
Thirdly,
a ‘time limit’ on welfare will be introduced once
beneficiaries are categorized as being fit for work. This will
take the form of a six-month “work search” period during
which time they will be required to find a job in their own
way.
4.
Pro-active case management
Step
four of the system is designed to help those people who have
been unsuccessful in finding a job during their six-months
free ‘work-search’ period. They will be provided with
professional support through a pro-active programme of case
management. This will help them to overcome their individual
barriers to work so that they will be successful in getting
and keeping a job.
In
some cases, the support of a financial planner will be needed
so they can get their personal finances sorted out and under
control. In other situations assistance may focus on
child-care help, transport, relocation, or even the provision
of interest free loans so they can buy the clothes or tools
they need for a job.
5.
Full-time work-placement programme
Finally,
this pro-active case-management process will operate in
conjunction with the fifth step of ‘work placement’. For
those who have spent an unsuccessful six months hunting for a
job, work placement will involve forty-hours-a-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 enable them to engage in the informal
networks, which more often than not, lead to a job.
An approach designed to
eliminate dependency
Based
on approached that have been implemented overseas, 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 provided 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 professional
support to enable them to become work-ready and get a job.
Further,
this re-vamped welfare system will ensure that once again, the
majority of New Zealand children can look forward to a future
where they are no longer trapped in families plagued by
intergenerational welfare dependency and its associated
problems of social exclusion, but are brought up by parents
who value work.
Finally,
this five-step process will eliminate much of the fraud and
abuse that has for too long plagued the welfare system. It
will enable the cost of welfare to be significantly reduced,
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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