by Metiria Turei
Despite overwhelming opposition to the Bill by submitters, the National Party used its majority on the Select Committee to report it back largely unchanged. They even decided to recommend a harsher reduction of benefit regime for beneficiaries who are deemed to have failed a work test than had been proposed in the original Bill.
Here’s my minority report from the Select Committee on behalf of the Green Party:
The Green Party believes that this Bill will hurt New Zealand’s most vulnerable families, increase their housing and food insecurity, encourage discrimination against beneficiary families, and exacerbate the growing gap between wealthy and poor families.
Of the 71 submissions to the Social Services Select Committee on the Bill, only four were in support of it proceeding. The Green Party shares the concerns of many of the submitters that the Bill is ideologically inspired faith-based legislation that lacks evidential support for its most significant provisions.
That concern is also reflected in comment in the Ministry of Social Development’s Regulatory Impact Statement on the Bill:
“There is no research currently available which accurately quantifies the size of the behavioural response from these changes in policies. This prevents estimates, with the degree of accuracy required, from being made of the number of people who will move from benefit to work over a year, as a result of the proposed changes.”
The Green Party does not share the “Work First” ideology that underpins this Bill. The ideology – that any paid work, however menial and at whatever conditions and pay rates, is better than no paid work – both risks causing real financial and social harm to some of New Zealand’s most vulnerable citizens and fails to recognise the value of the unpaid work that beneficiaries undertake caring for children or disabled and elderly adults and providing voluntary contributions to their communities.
Work testing domestic purposes benefit
The Green Party believes that parents themselves are the people best qualified to make the decision as to how, or if, they balance their childcare responsibilities with paid employment. The Bill will deny parents that choice if they are in receipt of a domestic purposes benefit and their youngest child is aged 6 or over. They will be required to work 15 hours a week, if such work is available, whether or not they consider this is in the interest of their children
Many parents will find it difficult to obtain quality and affordable childcare, particularly during school holidays when they will still be expected to be working but their children will not be at school. There are significant risks to child welfare of children being left “home alone” under the policy that were identified in a 2002 evaluation of the 1999 reforms that previously imposed a work test on sole parent beneficiaries. That evaluation recommended that further research be undertaken on this risk, but no such further research was done.
The “work first” approach, coupled with the abolition of Training Incentive Allowance for tertiary education, risks parents being moved off domestic purposes benefit into lowly paid, temporary, and/or casual employment to satisfy the work test. The Green Party fears this is likely to increase labour market churn, with negative implications for both employers and the individuals concerned who are forced into such employment.
The Green Party also asserts that there is no evidence from the previous occasion when domestic purposes benefit was work tested subsequent to the 1999 reforms that supports the view that a work testing regime has any significant impact in moving domestic purposes beneficiaries into paid work.
Prior to the 2008 election the National Party pledged to relax the income tests for benefits so that all income less than $100 a week was exempt from income testing. That was a proposal that the Green Party supported. However, the Bill retains the current income testing threshold of $80 for unemployment and sickness beneficiaries. The result is that all unemployment beneficiaries who earn $100 a week or more will be $14 a week worse off than if the Government had fully implemented the National Party’s pre-election pledge in this regard. This will not only impact negatively of the personal finances of unemployment and sickness beneficiaries who work part-time, but will act as a disincentive for them to undertake additional part-time work.
Work testing sickness benefit
The proposals in the Bill to work test sickness beneficiaries appears to be a knee-jerk response to increasing numbers of sickness beneficiaries, but the Green Party is concerned that the Social Services Select Committee was provided with no evidence that it is likely to be successful in stopping the growth in sickness benefit numbers.
Several submitters referred to a similar approach taken in Australia in 2006, to an evaluation of that policy that revealed that it was spectacularly unsuccessful reducing Australian disability support pension numbers, and to comments earlier this year from Australian Minister for Families and Community Services, Jenny Macklin, that “The big stick approach had no impact on the number of people on disability support pensions. In fact, the numbers kept going up. It was a simplistic approach to a complex problem.”
The Green Party believes the Australian experience would suggest that work testing sickness beneficiaries is unlikely to achieve its objective of reducing the growth in sickness benefit numbers.
Furthermore, the Green Party is concerned work-testing of sickness beneficiaries could have significant negative impacts, including the added stress of an expectation to look for work, under threat of sanctions such as reduction or loss of benefit, being likely to be detrimental to the health of beneficiaries, particularly those suffering from mental illness.
The Green Party is also concerned that there will be reluctance among employers to employ people with poor employment records due to ill health or disability. Many of those who are employed are likely to get only casual and/or temporary work, so their work test obligations, and the stress they cause, will be ongoing.