In the seventies, the famous writer and philosopher Ayn Rand described the pervasive danger of the welfare state:
Morally and economically, the welfare state creates an ever accelerating downward pull. Morally, the chance to satisfy demands by force spreads the demands wider and wider, with less and less pretense at justification. Economically, the forced demands of one group create hardships for all others, thus producing an inextricable mixture of actual victims and plain parasites. Since need, not achievement, is held as the criterion of rewards, the government necessarily keeps sacrificing the more productive groups to the less productive, gradually chaining the top level of the economy, then the next level, then the next.
There are two kinds of need involved in this process: the need of the group making demands, which is openly proclaimed and serves as cover for another need, which is never mentioned—the need of the power-seekers, who require a group of dependent favor-recipients in order to rise to power. Altruism feeds the first need, statism feeds the second, Pragmatism blinds everyone—including victims and profiteers—not merely to the deadly nature of the process, but even to the fact that a process is going on. 
Ayn Rand could have been writing about New Zealand. Driven by power-seeking politicians, the welfare safety net has been manipulated over the years to the point where instead of alleviating hardship, it is creating unimaginable harm to some recipients, and widespread damage to society and the economy as a whole.
With New Zealand’s total welfare bill for benefits and pensions expected to top $20 billion next year, a massive 30 percent of all government spending, the burden on taxpayers and the drag on the economy is huge.  What is worse is that instead of living up to its promise of helping people to get back on their feet, the present system encourages far too many beneficiaries to remain on welfare as a lifestyle choice.
The figures speak for themselves. Over the last decade, in spite of exceptional economic growth and a massive shortage of labour, the number of people on welfare benefits other than the dole grew from 240,000 to 255,000. In other words, the welfare department was unable to move people capable of working off the Sickness Benefit, the Invalid Benefit or the Domestic Purposes Benefit into the many jobs that were available. In fact, over that period, the numbers on the Sickness Benefit increased by 55 percent and the numbers on the Invalid Benefit by over 60 percent. While numbers on the Domestic Purposes Benefit remained pretty static at over 100,000, more than 50,000 able-bodied working-aged women with school-aged children between 6 and 18 years old, opted to stay on a benefit rather than get a job. This means that while concerns mount at the growing numbers of unemployed – presently numbering over 100,000 – there is little focus on the more than quarter of a million working-aged New Zealanders entrenched on these other benefits.
The reality is that far too many beneficiaries who could and should be working are abusing the system. Doctors have alleged that social welfare staff have been directing difficult ‘work-shy’ beneficiaries onto sickness and invalid benefits where they are not subjected to work tests. And there are on-going allegations that welfare fraud is rife throughout the system with one cheat alone able to establish more than 100 different identities to collect over $3 million in fraudulent benefits.
But a far more serious concern is the rapid growth of the underclass.
Just last week we were given an insight into this dangerous world through a Radio NZ interview with a Mongrel Mob member. The matter being discussed was the eviction of five state house tenants with gang affiliations from the Lower Hutt suburb of Pomare, following on-going complaints of severe anti-social behaviour and intimidation. The situation led to both the complainant and the Housing NZ staff member having to be relocated under police protection and nine Mongrel Mob members and associates being arrested for charges which included intimidation.
The whole situation was undoubtedly made much worse by both Housing NZ and the Police having handed confidential documentation to the Mongrel Mob, containing the new home address of both the complainant and the Housing NZ staff member, as well as full particulars of the Police operation including the names and responsibilities of the 50 officers working on the case!
In the radio interview the Mongrel Mob spokesman denied that death threats had been issued against the Housing NZ manager or that the complainant had been bullied and intimidated. He was also at great pains to claim that Mob members were not living in the houses: “Let’s get something straight. It wasn’t actually the Mob members that got the eviction notices. It was their wives. Housing New Zealand said they breached their tenancy agreement by having Mob Members living with then. It wasn’t Mob Members that got the eviction notices it was their girlfriends. Mob members are not living at the houses involved, just visiting there to see their kids. There are 15 kids involved in this situation so there are lots of … domestics to be sorted out”.
As the Tui billboards say, “Yeah Right”!
These sorts of arrangements can be very lucrative. The wives or girlfriends rent the state houses for say $50 a week, receiving the DPB for a total of 15 children, with their Mob member boyfriends or husbands pretending not to live there so they can get the full unemployment benefit. In other words, fathers fit enough to intimidate the neighbourhood are clearly not fit enough to get a job so they can provide for their wives and children!
In a speech entitled “The Kiwi Way: a fair go for all”, Prime Minister John Key, when he was Leader of the Opposition, made a commitment to New Zealand that he would sort out the mess that welfare had become. In particular, he condemned long term welfare dependency and vowed to halt the advancement of the underclass with its “dangerous drift towards social and economic exclusion”. 
He described communities around New Zealand that have become so dysfunctional with “lawlessness, disarray and deep despair” that Posties had refused to deliver mail there. The only people that stayed in such communities were those who had nowhere else to go. “The worst are home to families that have been jobless for more than one generation; home to families destroyed by alcohol and P addiction; home to families where there’s nothing more to read than a pizza flyer; home to families who send their kids to school with empty stomachs and empty lunch-boxes; and home to families where mum and the kids live in fear of another beating from dad”.
In his speech, John Key promised to take action: “We have to do better. Because, left unchecked, the problems of a growing underclass affect us all. These are tough problems – very tough problems. But I have no intention of being a Prime Minister who tackles only the easy and convenient issues. I don’t pretend I’ve got all the solutions. But I can tell you that dealing with the problems of our growing underclass is a priority for National, both in opposition and in government”.
The point is that the children born into underclass families are all too often the very children that are abused and killed by their dysfunctional families. These children have virtually no hope of living happy, “normal” and successful lives. Instead they will more than likely become imbued with hopelessness, despair and hate.
What’s worse is that we know that the only reason that this dreadful situation is allowed to persist – with the problem getting bigger year by year – is because no politician has had the guts to change the incentives in the welfare system that have allowed the underclass to flourish.
This is not rocket science. It is simply a case where policy that was designed to help people is now causing dangerous harm – or as Ayn Rand has described it, deadly harm.
The Mongrel Mob case highlights how state welfare is being abused by people who have no intention of ever taking responsibility for earning a living – unless they are forced to. If no-obligation cash payments are not stopped, their children have virtually no hope of ever breaking the cycle of intergenerational welfare dysfunction that they have been unlucky enough to be born into.
A look back at how we used to provide state support highlights the folly of our ways.
Before the DPB was introduced, a single mother used to receive time-limited social assistance from when she was around 8 months pregnant to the time her baby was either three months old if she bottle-fed the baby – or six months if she was breastfeeding. Emergency assistance was also available to women whose relationships had broken down, so that they had support while they sorted themselves out and found their feet. These are the sorts of schemes that are working well in most other western countries. These schemes – unlike our stand-alone Domestic Purposes Benefit – ensure that children are raised in homes where there are working role models and are not just a means to a welfare lifestyle.
This week’s NZCPR Guest Commentator, welfare reform campaigner Lindsay Mitchell explains in her article “Welfare Reform in a Recession”, that there is no bad time to be trying to reform welfare:
“The period under the last Labour government would have been an ideal time to radically reform welfare because jobs were plentiful… but look at it another way. If increasing resources are going to be needed for unemployed people, an effort to reduce dependency on other benefits is doubly urgent.
“The current benefit system does young people no favours by allowing them to default to welfare with relative ease. The rate of teenage birth has been rising since 2003 and so has the percentage of DPB recipients who are aged 16-19. These newcomers to welfare present a double whammy because they tend to stay on welfare the longest.
“Surely now is the time to be saying enough is enough. TheDPB should be replaced by a return to what happened in earlier times; financial assistance provided for a short specified period only. Thereafter, single parents who cannot find work should be subject to the same payment rate andwork tests as any other unemployed individual. If the expectation of a life on welfare, no questions asked as long as there is a child in tow, was removed, behaviour would change. As one English commentator has suggested, take away the subsidy and the steam would go out of the single mother industry over night”.
While opponents of welfare reform like to argue that the sky will fall in, if welfare is changed, they should remind themselves who are the real victims. It is children like Nia Glassie, Chris and Cru Kahui, Lillybing, and all of those other children of the underclass. And for every child that has died, there are hundreds of others that are alive but maimed.
1. Ayn Rand, The Preview – Ayn Rand Letter, I, 23, 1.
2. Treasury, Core Crown Expense Tables
3.MSD, 10-year Benefit Time Series
4.ODT, Police leave secret files with the Mongrel Mob
5.RadioNZ, Housing NZ managers details revealed to the Mongrel Mob
6.John Key, The Kiwi Way: a fair go for all