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3 December 06
An Inconvenient Reality 


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Trying out new things is a normal part of everyday life. Whether it’s a new recipe, a quicker way to get home, or a different system of tracking emails in the office, if the initiatives work and produce positive benefits, they are continued, but if they don’t, they are rejected.

The problem with government, however, is that such common sense review and monitoring systems have little place. Once a programme or legislation is introduced, it takes on a life of it’s own, with vested interests working overtime to protect it from objective scrutiny. As a result, completely ineffective or even harmful initiatives are funded from the public purse for year after year.

As President Ronald once said: “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!” He added: “The most terrifying words in the English language are: I'm from the government and I'm here to help”.

That is why some big government programmes like welfare, arguably do more harm than good. Their associated vested interests are very powerful. They come up with persuasive arguments to block the calls for reform, including, it appears, the manipulation of statistics.

The result of this welfare policy failure is the emergence of a permanent underclass of welfare recipients – largely Maori – who exist on welfare and the proceeds of crime. Their very existence is an indictment of the duty of care of successive governments, who have refused to adequately address this dangerous and growing problem.

This tragic state of affairs, whereby taxpayers are forced to fund the growth of a criminal community who live on welfare, is in no way inevitable. When Michael Joseph Savage first introduced our welfare system back in the thirties, provisions were included in the legislations to ensure that the hardworking taxpayers were only required to support claimants “of good moral character and sober habits”. Legislators back then could not countenance the thought of taxpayers being forced to support people who were layabouts or criminals.

That is why welfare worked so well for more than thirty years, providing help and support to those who were genuinely needy, with minimal abuse from the ‘undeserving’. It only went off the tracks when the Kirk Labour Government intervened in the seventies to change welfare into a universal entitlement, available to anyone who didn’t want to work. By embracing unconditional welfare, Labour fuelled a pervasive and destructive belief that the government ought to support anyone who failed to support themselves. The result was predictable: there are now almost 300,000 working age adults receiving welfare, only a small proportion of whom are genuinely “needy”, with the vast majority quite capable of contributing through work.

It also needs to be said that in subsidising single parenthood, the welfare system has also exacerbated the gap between rich and poor, as welfare families continue to have higher birth rates than others. 

Advocates for the poor have long argued that more welfare is the only way to help people out of poverty. But in a report entitled “Work and Marriage: the Way to End Poverty and Welfare”, authors Ron Haskins and Isabel Sawhill of the Brookings Institution, found that the key reason that most people are poor is a lack of work – either they do not work enough, or they work too few hours to move themselves and their children out of poverty. They further found that a much larger proportion of the poor are not married, did not finish their education, and had more children, than those who were not poor. 

In their report they concluded that: “the poverty rate among families with children could be lowered by 71 percent if the poor completed high school, worked full-time, married, and had no more than two children”. They recommended a series of policy proposals aimed at young people: “They would be expected to stay in school at least through high school, delay childbearing until marriage, work full-time to support any children they chose to bear outside marriage, and limit the size of their families to what they could afford to support. Existing policies would be aligned with this set of expectations. Income assistance would be conditional on work with some exceptions for hardship cases, including serious disability. Benefit programs would be capped at two children per family. This policy would not deny people the right to have more children, but it would require that they do so at their own expense.” (To read the report click here>>>)

It is interesting to reflect on the effect that such policy proposals would have on New Zealand . Firstly, it would signal that welfare support had returned to its original purpose of providing security for the genuinely needy and a hand up to work for everyone else. Secondly, it would re-affirm the critical importance of education as the key to a better life. Thirdly, it would send a strong signal to young people that if they want to establish a stable partnership for life, marriage is a good way to do it. And fourthly, it would remind couples that the choice to have children is not only one of the most important decisions they will ever make, but that it also comes at a significant cost!

Stuart Birks, Director of the Centre for Public Policy Evaluation at Massey University , this week’s NZCPD Guest, examines this theme in his commentary “Thinking of the Future”. Stuart reflects on the detrimental effects that some of our legislation is having on young people: in particular equal employment laws, which have forced men from their traditional jobs in the workforce, and family laws, which have significantly interfered with the dynamics of family life, creating instability and pushing men out of their traditional roles as fathers and breadwinners for their families (click to view ).

These are critical issues. If we look at what is happening overseas, we see that many countries are finding their populations are dramatically shrinking, as young people delay or forgo having children. For example in Italy a quarter of women now have no children and another quarter stop at one.

In two articles published in September in the International Herald Tribune, Elisabeth Rosenthal writes that “children are no longer thought of as a blessing but as an economic liability” and that "In Italy they don't have children, they have dogs and cats" (to read two articles by Elisabeth click here >>>) 

With the Labour Government continuing to over-tax the nation as it rakes in massive surpluses, it is surely time to look at the impact that those policies are having on the young. Excessive taxation makes it almost impossible for young couples to raise a family on one income, to pay off their student loans, or to save for their own home.

As Elisabeth Rosenthal warns in her article about Italy : “Over time, the decisions of young people to delay or forgo having children have had a ripple effect, changing the texture of Italian society and its values. Courtyards from Rome to Naples , once filled with children, have fallen silent. Economists say communities in time will struggle to find enough younger workers for certain tasks: police officers to enforce the law, ambulance workers and nurses to keep hospitals staffed, dock and factory workers to keep the economy going”.

In other words, the overbearing financial burdens that have been placed on today’s young people by government policy - that has created a high tax, low growth and low wage economy - may well be deeply regretted by future generations who will view the legacy of Labour, as a Government that has put its own greed ahead of the good of the nation.

The poll this week asks: Do you believe the income gap in New Zealand is increasing or decreasing? Click here to vote >>>

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