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Dr Muriel Newman

Outrage at welfare changes

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Poverty advocates are crying foul over the fact that the government is even raising the idea of linking the immunisation of children to benefit receipt, even though it is an established practice that works well in many other countries. This is a discussion that is taking place in the wider context of the government’s initiative to better protect vulnerable children. Requiring beneficiaries to immunise their children – unless they are opposed for conscience reasons – is surely part of their obligation as parents. Those who fail to do so are putting their children at risk.

While immunisation rates have improved markedly over the last few years due mainly to a concerted effort by health authorities and other government agencies, there is still a way to go. For preventable disease transmission to be effectively controlled in a community there must be high immunisation coverage through an uptake of vaccination programmes of about 95 percent. Accordingly, the goal of the Ministry of Health is for 95 percent of two-year-old children to be fully immunised by July 2012. The latest data from June 2010 showed that immunisation coverage for New Zealand children at age two years was 87 percent. For five-year-olds it was only 67 percent.1

By six-months old, New Zealand babies should have had a series of three immunisations – at six weeks, three months, and five months – covering Diphtheria, Tetanus, Whooping cough, Polio, Hepatitis B, Haemophilus influenzae type b, and Pneumococcal.  Statistics show that by March 2010 only 67 percent of New Zealand infants had achieved their six-month immunisation milestone – 72 percent of European babies, 64 percent of Pacific Island babies, and staggeringly, only 53percent of Maori babies.

The fact that so many children are not protected from preventable disease is part of a bigger issue of parents failing to take responsibility for the proper care of their children. Last week stories emerged of children in Northland who were found scavenging for food in slops buckets meant for pigs. An absurd reaction by some do-gooders to this news was to call for a tightening of regulations around pigs’ food – to ensure that such children aren’t at risk of food poisoning! The proper response, of course, is to require parents to take their parenting responsibility seriously and ensure their children are suitably nourished and well cared for.

While scavenging in slops buckets is clearly an extreme case, the incidence of children going to school hungry has become so widespread that increasing numbers of schools are now providing breakfast. In some cases, they provide lunch as well. While the availability of free food will have definitely increased the demand, the issue that is at the heart of this problem is entrenched irresponsible parenting.

Of course cases of extreme hardship will always arise as a result of the most unfortunate of circumstances, but in most of the cases where children are continually hungry, welfare will be part of the equation, and the hardship will be largely caused by poor budgeting and bad decision-making. In too many of those cases, the needs of children are overshadowed by the desire for cigarettes, drugs, alcohol, even Sky TV, rather than food, medical care, and rent.

It is to help these at-risk families re-align their priorities with the needs of their children that the Welfare Working Group – the advisory body established in 2010 to determine the best ways of reducing long term benefit dependency in New Zealand – recommended ‘Income Management’. They suggested that Income Management should be used as a last resort to assist welfare recipients, who have demonstrated on-going difficulties in managing their budgets, to meet their own and their children’s basic needs and get their lives back in order.  This scheme would remove control of a recipient’s welfare payments to a third party, such as a case manager, who would ensure that essential services such as housing, power, and debt repayments are taken care of through direct debit arrangements or vouchers. Funds for food, medical care and other basics would be available on a Payment Card. Access to such things as alcohol and tobacco would be restricted.

Income Management is one of the initiatives that will also be used to assist unemployed youth and teen parents, but in addition, cash incentives will be used as well.

Conditional cash transfers have replaced unconditional cash payments in many countries around the world including Latin and Central America, the United States, Indonesia and Cambodia. The scheme makes use of small payments to reward recipients for achieving specific goals such as ensuring children attend school, have regular medical checkups or pass exams – the sorts of benefits that not only assist the individuals, but improve society as well.

Our government has announced that such cash incentives will be used to encourage teen parents to attend parenting course, complete budgeting programmes, and stay in education. Given that New Zealand has one of the highest rates of teenage motherhood in the OECD, reform of the system to ensure that young people do not stay on welfare must be a priority – especially as almost a third of sole parents on welfare started off as teenage parents, with almost 40 percent of those going on to have additional children.

The reality is that New Zealand has one of the most generous sole parent benefit levels of all western nations along with some of the weakest work expectations. Is it any wonder that 113,000 sole parents are presently receiving the Domestic Purposes Benefit and that some 222,000 children live in benefit dependent homes? Such are the perverse incentives inherent in the system that there is ample anecdotal evidence of parents not only splitting up to access the DPB, but of mothers having more children to increase their benefit payments.

It is in addressing this latter problem that National has created yet more outrage from poverty advocates. Following the recommendations of the Welfare Working Group, National has already announced that women on a benefit who have an additional child will be expected to be available for part-time work once the baby is a year old. This will align the welfare system with requirements of the workforce, where a mother is entitled to take 12 months of extended parental leave after the birth of her baby, before having to go back to work.

But the second part of this policy recommendation is to provide women on benefits with access to free long-acting, reversible contraception in order to help them make better family planning decisions. This policy is expected to cost $1 million and will also be extended to include teenage daughters in benefit dependent households – another group at serious risk of poor life outcomes.

With free contraception readily available in New Zealand the response of the various parties to the policy announcement was quite remarkable. Labour objected because they said that access to the contraceptives should be free for everyone. The Green Party feigned outrage, yet hypocritically promote a population policy based on the need to limit population expansion by regulating the size of families and the spacing of children!

The approach of the Maori Party to this issue, according to Clare Trevett of the New Zealand Herald, is “refreshingly blunt”. Their policy consists of “encouraging people to go forth and multiply, especially if they are Maori”.2

Similar outrage erupted a few weeks earlier when a Labour Party Private Members’ Bill to extend Paid Parental Leave for working women was drawn from the Parliamentary ballot. The bill proposes to extend the leave provisions for mothers with new babies from the present 14 weeks to 6 months. With Paid Parental Leave presently costing taxpayers around $150 million a year – up from the $57 million estimated by Labour when they introduced the policy in 2002 – Sue Moroney’s extended entitlement would cost in the region of $300 million a year.

National said extending the leave is unaffordable and gave notice that they would invoke a financial veto on the bill on the grounds that it would have more than a minor impact on the Crown’s finances. Such a veto would come into play at the third reading of the bill – if it gets that far.

The matter of whether Paid Parental Leave is good policy is an interesting one. At a time when the disastrous situation in many Eurozone economies – where government spending programmes have grown to unsustainable levels – is clear to see, it is important to examine the deeper implications of such policies. While it is undoubtedly a big help for families with new babies to have the $459 a week coming in to their household courtesy of taxpayers, the fundamental issue of whether it is right that taxpayers should be paying new mothers to stay at home and care for their babies, should be considered.

This week’s NZCPR Guest Commentator, welfare analyst Lindsay Mitchell, questions the wisdom of such middle-class welfare, asking whether families should accept responsibility for their own affairs in her article Paid Parental Leave – time to take a step back:

“Paid Parental Leave, a relatively recent innovation, is an example of social spending ‘creep’ across the developed world. When advocating for PPL protagonists  play countries off against each other describing  various provisions as  ‘generous’ or ‘inadequate’ creating an upward race. But why should New Zealand be blindly emulating welfare states whose high taxes and generous entitlements are currently coming home to roost?

“Extended PPL is essentially more middle class welfare (in the same vein as Working For Families which John Key once described as “communism by stealth”.) Because it is not means-tested high income mothers qualify. This results in upward income redistribution. That is, a low-income single person or small business owner is paying tax to fund relatively wealthy mothers to stay at home with their newborns. These circumstances are unjustifiable.”

The road to reform in major areas like welfare is far from smooth. But it is a necessary path for New Zealand to go down. Generous welfare entitlements have created a debilitating dependency culture with a hard core of families that may say they care about their children, but fail to provide even the basics for their well being. If the reform initiatives currently being promoted by the government can ensure these at-risk children have a better chance of achieving their full potential in life – and if at the same time they can transform our future in a positive way by reducing the cost burden on New Zealand society – then surely these changes should be supported.