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Lindsay Mitchell

Another Working Group: Another Waste of Time and Money

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The Welfare Expert Advisory Group has delivered what the Green-driven government wanted – a recommendation to wildly increase wealth redistribution – an ideological affirmation. The group advises, “The fiscal cost of improving the adequacy and design of income support is estimated to be around $5.2 billion a year.” That’s an increase of around 50% on current costs.

The report overflows with conceptual phraseology, much of it drawn from Maori culture; words like equity, fairness, justice abound. It lacks however any concrete suggestion as to where an extra  $5.2 billion is to come from. The only justification for such a massive hike comes in the form of:

“It is important to recognise that the current system has costs of its own – those associated with the broader negative effects of poverty including lower educational attainment,imprisonment and poorer health.” Which is exactly the approach National had taken under Bill English’s actuarial analysis, but without front-loading savings.

Unsurprisingly then, only two policies were announced in direct response to the report and have been scheduled for introduction in April 2020. 1/Scrapping the penalty for not naming the father of a benefit-dependent child (a 180 degree turn from the last Labour-led government’s stance), and 2/ an increase in what beneficiaries can earn before their benefit is affected (which National quickly approved without considering  more people getting trapped in a part work/part benefit regime) .

The Minister for Social Development, Carmel Sepuloni, says, “The Government can’t deliver on every recommendation at once.” Indeed. It can only deliver on two of forty two in a year’s time,  just months before it stands to lose any ability to do more.

In that respect alone this working group has been another waste of time and money.

Many of its recommendations are pie in the sky. It wants core benefit levels raised by up to 47 percent. On top of higher abatement rates, paid work for the unskilled would become uneconomical. People respond to economic incentives. For sole parents benefit ‘packages’ already rival income from employment despite the report’s claims about grossly inadequate levels of welfare.

Some recommendations are a straight reversal of the last National government’s welfare reform measures. Single parents should only have to work part-time when their youngest is 6 – currently it is 3 in line with eligibility for free early childhood education. Removal of the ‘subsequent child’ policy, introduced to prevent sole mothers from adding children to their benefit to avoid work-testing, is urged. The compulsory ‘money management’ aspect of youth benefits should be scrapped with a return to  handing out unconditional cash to 16 and 17 year-olds

Especially cheered by the Greens no doubt, the panel calls for removal of obligations and sanctions for “… pre-benefit activities, warrants to arrest sanctions, social obligations, drug-testing sanctions, 52 week reapplication requirements, sanctions for not naming the other parent, the subsequent child work obligation, and the mandatory work ability assessment for people with health conditions or disability.”

Under such a scenario New Zealand would have parallel worlds whereby one group of people – the producers and risk-takers – are constantly expected to meet work, tax, health and safety obligations – to name a few – while the other avoids any and gets paid for the privilege.

Increases to Working For Families tax credits and eligibility thresholds are advised. Child support payments to beneficiary parents, currently kept by Treasury to offset benefit payments, should be passed directly to the custodial parent.

With regard to Job Seekers, here’s an odd one: “Establish an effective employment service of the Ministry of Social Development so it is better able to assist people to obtain and keep good, sustainable work.” Surely the Ministry has an effective employment service already (though on currently increasing Job Seeker numbers, you may wonder). What constitutes “…good, sustainable work”? I am reminded of a previous Labour Minister Steve Maharey who protested against “dead-end jobs” for beneficiaries. Exactly who is going to do the unskilled yet vital work required by this country’s economy? And why a downer on those who do the least desirable jobs? I am thankful for them everyday.

There are multiple vague wishy-washy recommendations like, “Improve the health and wellbeing of people with health conditions and disabilities, along with carers of people with health conditions and disabilities who interact with the welfare system by providing financial support that is adequate to live a life with dignity and is equitable across the social sector.” Meaningless.

A call to “increase public housing on an industrial scale” conjures visions of future ghettos based on past experience.  And then of course demands for heavier regulation of landlords feature as if that will magically make rental property cheaper when evidence points to the opposite outcome.

One recommendation makes sense: to index benefits to the cost of living, as is Super. That would be fair inasmuch as beneficiary income would keep pace with inflation. That is the solitary saving grace amidst an utterly unworkable, utopian/dystopian manifesto (take your pick).

Instead of this charade the Green’s 2017 welfare policy could’ve easily been printed and circulated saving over $2 million in the process.