Only one week left for submissions to Welfare Working Group

There is just one week to go to make submissions on the Government’s Welfare Working Group’s Options Paper – submissions close on Christmas Eve, unless the Welfare Working Group heed Catherine Delahunty’s call for an extension of the submission date.

It really is ridiculous that such a short time is provided for public submissions on what the Government is suggesting is going to be the biggest reform of the welfare system since the 1970s.

The Welfare Working Group proposals include some options that, if implemented, would have horrendous social outcomes; including time-limiting benefits, reducing the rate of benefits after a certain period of time, and forcing single parents with a child as young as one year of age out to work.  They also propose a few options, such as reducing the rate that benefits are reduced on account of earned income, that are worth exploring further.

To assist you with getting submissions in on time, the Green Team here at Parliament has produced a submission guide with some analysis of the proposals and suggestions for you to include in your submissions. The submission guide is available here on the Green website, or you can download a MSWord copy from here.

You can make your submission through this submission form (note and work around the heavily loaded questions); or by email to

18 Comments Posted

  1. I sort of agreed rimu and so decided to give some advice – within the terms of reference set for the group, just not withing their chosen options direction.

    SUBMISSION to the WELFARE WORKING GROUP “24 December” 2010

    The number of people on benefits is a function of the structural economy and work capacity. Thus benefit dependency cannot be discussed in isolation from full employment policy.

    If I were giving advice to the government on how to reduce benefit dependency I would say that there are two parts to this, full employment and improving the work capacity of those on benefits. Sure benefit dependency, indicated by numbers on benefits has only increased (across the economic cycle) in areas unrelated to any work test, but work testing more people will not create more jobs.

    Managing the cost of welfare because of the lack of full employment
    The increase in numbers unemployed is a consequence of transition from a national economic policy of full employment and a tolerance for inflation to globalisation with an anti-inflation goal directing monetary policy. Thus there will always be a rising level of unemployment with each recession because there is less government capacity or will to prevent this.

    Of course it then grows to worrying levels (unaffordable as government tax revenue falls). This results in these welfare reviews.

    This can be managed by saving money (as we have via the Cullen Fund for future Super costs) when unemployment is low to provide for the budget cost of the higher unemployment in the future. In a sense this has been done in paying down debt – but placing money into an unemployment cost provision fund may prove more the more effective budget planning option. It is standard accounting practice to provide for anticipated costs when assessing whether there is a surplus or real profit to declare.

    RECOMMENDATION 1 – Governments (when with a budget surplus) place money into a reserve fund to provide for any future increase in unemployment cost with the next recession. This balances out the cyclical impact of unemployment on the budget.

    This would end the apparent panic some use as the premise to crush the weak under foot to make “their nation” stronger.

    Full employment and the free market model problem

    The capitalist free market model requires a spare pool of (skilled) unemployed available to take up new positions (allow economic supply transformation to market opportunity demand). So unemployment is maintained even during the “inflationary” peak of the economic cycle. The Reserve Bank model we have converges with this, as if there were not such a pool, demand for scarce labour would bid up wages (be inflationary).

    Naturally business groups support this approach (which suppresses wage demands and leaves a pool of available labour for their on-call demand) and there is regular comment from them in the media, complaining about labour “scarcity” when unemployment gets close to (free market ideal or systemic) full employment at around 3 to 4% unemployed. Similarly they support the RB primary focus being an anti-inflationary regime as this supports such a status quo.

    Thus focus on welfare reform is simply a way of hiding this truth and doing nothing about it apart from implying that it is the unemployed who are the problem.

    A policy for full employment

    Full employment is dependent on measures other than raising the OCR to manage inflation. During the most recent economic growth period the numbers on the UB fell to 30,000 (below 4%). If the RB had not increased the OCR to counter inflation, in part from the bubble in the housing market, we could have witnessed serious pressure on employers to raise wages to compete for scarce available labour. So this is not unattainable.

    To close the wage gap with Australia the government should try and engineer a return to this scenario. Measures that would help to achieve that goal include increasing housing stock levels with investment in new state housing (creating jobs and dampening the housing market). If the new housing is later sold back onto the market it is self-funding. In that way government can mitigate the decline in private sector investment and provide equilibrium to the housing sector. That is so affordable and so useful can we afford not to do this? Such a policy being an economic policy matter is separate to buying and selling state houses to meet changes in demand (or to move on tenants paying market rent).

    RECOMMENDATION 2 – The government build more state houses and finance this by selling them after they are built (as the market recovers).

    RECOMMENDATION 3 – The RB be enabled to apply a surcharge on mortgages rather than increase the OCR. This would mean rather than an increase in the OCR from 3 to 4% next year, a 1% surcharge on home mortgages would occur instead (possibly a higher surcharge on landlord rental properties). The RB Governor has in the past called to have this policy option available. This should keep our dollar competitive in the cross Tasman trade and maximise returns to exporters in general. While this would risk some imported inflation, it should help the government realise a quicker return to a balanced budget.

    Full employment and the training of workers

    Part of the welfare problem that we have is because (apart from educational failure at school level) of under-investment by companies/industry in on the job training (transfer to institution training at public expense). The cost of training falling on the state places budget pressure on the affordability of carrying a spare pool of unemployed workers to enable the market to perform at optimum levels (let’s be blunt hold down wage levels to reduce business unit costs).

    For the same reason that business holds down wage levels to be more competitive in the now global market (which has added competition pressures to all tradable goods and services) government, carrying more of the cost of worker training and the spare pool of unemployed, does the same for budget reasons. Thus we continue to under-pay skilled (in global demand) workers who deliver important public services and have by necessity imported (economic and lifestyle) migrant workers to ensure they can still be delivered (primarily health care). This has enabled business to avoid any need (evade responsibility) to train graduates on the job (or increase pay to retain workers) and now government does the same.

    Thus the welfare end-cost problem results from insufficient government investment and choice of economic labour market policy. If it were the more efficient economic option for the country it would be generating the productivity that the country needs to afford the consequent welfare costs. Well is it?

    Thus focus on welfare reform is simply a way of hiding this truth and doing nothing about it apart from implying that it is the unemployed who are the problem and not the economic settings for the labour market.

    Half of those on the dole under 18 back in 1999 spent 5 of the next 10 years on benefits. The growing number of youth who are Maori or Polynesian, indicates that educational outcome improvement related to successful entry to the workforce is going to be increasingly important.

    RECOMMENDATION 4A – An equivalent subsidy for apprenticeships wages as occurs for students (when not applying the full cost of tuition in the fees charge). This possibly restricted to those choosing this option rather than tertiary study or otherwise those longer term on benefit support (either as an alternative to training benefit courses or in succession to them).
    RECOMMENDATION 4B – The goal of people being in work or education or training till 18 be sustained and implemented in practice. The number of high school students (cNCEA level 2) working part-time for work experience and or work training increased. There be expanded 2 year programmes between the ages of 16 and 18, or one year programmes for those doing only part of NCEA level 3.


    What welfare policy should be, within current wider labour market and economic policy settings (which suit the neo-right free market myth), is however presumably all that the government wishes to consider in this review.

    So ones first criticism here – is that those supporting a continuance of the status quo in the economic model should not just apply the focus on a review of welfare without admitting collective responsibility for the problem existing as it does. Otherwise we would be targeting the consequences of policy choices in isolation.

    The second criticism is that the sole policy guide should be to ensure we maintain a just and humane approach, not sacrificing this to make the flawed economic model work better (for some).

    Only if there is a government commitment to policies that would realise full employment – is focus on “benefit dependency” a valid concern. Otherwise it will have a negative extra cost impact on the budget. If only for the reason that reducing benefit dependency comes at a short term cost that is only mitigated by longer term savings once there is continuing full employment (on the UB).

    There is however a second economic problem.

    The second economic problem – work testing more beneficiaries if the goal of closing the wage gap with Australia is also to be achieved.
    To simply work test those on the DPB, SB and IB would flood the labour market and place downward pressure on wages. As that is not consistent with government policy to increase wages and close the wage gap with Australia, the programme to reduce benefit dependency would have to focus on providing opportunities for people so that they would be able to work, as distinct from simply work testing more and more people.

    Of course the WWG might feel the government was not really committed to increasing wages – the government has already indicated it wants to work test more and more people – so need not be bound by that constraint.

    I have raised some objections to the governments approach on welfare reform. This is either because it is inconsistent with their other stated policy goals or without a necessary and prior commitment to full employment. Having noted that I will proceed.

    The obvious on work testing

    Where work testing and providing opportunity to the benefit dependent meet, is in the area of realising work capacity.

    ACC has expertise in the assessment of value, in making people work ready rather than continuing to provide a non-work income. This applies in the area of medical intervention costs – the use of private hospitals in treatment of those on waiting lists unable to work because of temporary (SB) or permanent (IB) incapacity.

    This focus should include addiction treatment, but we have a pressing need for more investment in the provision of addiction treatment centres (for those in the criminal justice system, let alone those on benefits as well).

    So again, improving work capacity comes at a cost and without policies to realise full employment there will be no savings resulting from the cost/investment. Yet there are qualitative gains (hard to quantify) from reduced crime and improved family circumstance (where parents on welfare are addicts).

    In the case of those on the DPB, there may be incapacity issues apart from need for after school care.

    Part-time work for those on the DPB (those with primary school age children) will only take families and children out of poverty if there is an exemption from abatement. I note some submissions call for an end to any exemption from abatement – the Business Roundtable presumably think this would cut benefit costs and think having working parents raise up children in poverty is good for business as if business is unrelated to the society in which it operates.

    Widespread availability of after school care and access to training places (including adult education) and tertiary education (TIA) develop work capacity.

    RECOMMENDATION 5 – That there be investment in after school care and training and education opportunities for single parents.

    RECOMMENDATION 6 – Where those with addiction issues leaving them unable to work (SB) or (IB), then treatment could become a condition for a work tested benefit.

    Improving public health policy as a long term investment in reducing incapacity

    There is a significant public health issue underlying the growing number of the population with work incapacity problems – and this is not solved by work testing.

    Investment in Addiction Programmes

    A part of some employment problems (and associated welfare dependency and or crime and imprisonment) comes from addiction problems. Our lack of investment in this area is holding back the economy, undermining attempts to reduce recidivism and exacerbating the welfare problem. The longer the problem is not managed the more likely people are to end up on SB and even the IB.

    RECOMMENDATION 7 – That addiction treatment for parents is a condition for any benefit wherever this problem was identified as a family welfare concern (as distinct from work testing) and otherwise be available for those who wanted it.

    RECOMMENDATION 8 – Helping CYF Improve Performance (see 7)

    When CYF makes home visits – they should be empowered to carry a stick – short of taking the children out of the home – empowered to recommend that WFF tax credits (thus includes working parents) and the child credits paid to beneficiaries be withheld and used in direct support for the child until there is an improvement in parental responsibility. The adult part of the benefit covers the rent and power and where it does not this can be managed by a targeted supplement out of the child component for this purpose. This means the discretionary component is utilised for family purposes that ensure child well being – medical visits/nutrition etc. The hope is that the stick being available would ensure more successful family home visits to resolve problems more quickly. The term trial programme comes to mind. This may realise reduction in child poverty and improvement in child wellbeing, even before benefit dependency and or unemployment status ends.

    RECOMMENDATION 9 – Improve the uptake of the delivery of the Well Child programme. There is a need to ensure all children are enrolled with a GP and Well Child provider. The B4 School component compulsory for those starting primary school.

    Healthy People/Nutrition

    We suffer a rising SB and IB welfare problem as a consequence of salt, fat and sugar intake.

    RECOMMENDATION 10 – There is a need for limits on salt levels in processed food and a strong consideration of either a saturated fat tax (to encourage change to other fats) or regulatory moves. We should intensify public health campaigns warning about the diabetes problem resulting from fat and sugar intake.

    Healthy Homes

    RECOMMENDATION 11 – Make a regulatory change requiring rentals to have basic insulation and heating capability standards.

    The labour market and incentives (non-financial)

    The largest disincentive for those on benefits to take up work is the risk of an unsatisfactory placement. This risk only exists because people who leave jobs are stood down from benefits. This sometimes results in workers citing a personal grievance claim against an employer so they can get the benefit. Notably some employer advocates (and BR) seek to deny the right of those taking personal grievance claims from obtaining the benefit – that would not only increase the disincentive, it would also place workers in an untenable position if bullied in the workplace.

    So I strongly urge reciprocity for workers and employers with both able to test out the working relationship for the first 3 months before committing to it. This means the employer will get an employee they want and the worker can try out for positions on full working pay or go back onto a benefit should their placement not work out. This equivalent right for the worker would also be available to existing workers transferring between jobs and thus would improve labour mobility.

    RECOMMENDATION 12 – That all workers be able to receive a benefit after choosing to leave employment provided this occurs within 90 days of taking up the position.

    Work and Income and employers (financial incentives)

    The old wage subsidy idea would work well with the 90-day rule – in reducing both cost and risk to the employer in trying out a person on a benefit as a worker.

    Selective use of a wage subsidy should change as circumstances in the labour market change. While unemployment is high and the cost to the government is large, there should be targeting to those who have dependent partners and or children. This not only takes children out of poverty it also reduces the benefit cost the quickest. I would suggest a 6 month wage subsidy period, with a 6 month renewal at a lower rate.

    RECOMMENDATION 13 – Beneficiaries with dependent partners and or children should receive the wage subsidy to direct employers to hire them first (for societal reasons).

    RECOMMENDATION 14 – This wage subsidy being extended to the longer term unemployed when unemployment falls to lower levels and when most higher cost beneficiaries (with dependent partners and or children) have already been employed.

    Part-Time Work for the dole

    Working for less than the minimum wage is in breach of ILO regulations (so part-time work is the available option).

    So where is this a viable concept? Where work experience is of itself of value – for those who have not been in work. And where the work comes with on the job training. Where there is value to the worker on top of the dole they are receiving. This implies an aspect of voluntary choice.

    The problem is paid employment position displacement (which is why public work/NGO programmes are generally preferred in practice).


    Work for the dole – Work experience (generally for those under 20).
    Work for the dole – On the Job Training (including graduates as unpaid “interns”).

    “Work and Income” compete in the market to provide workers to employers

    Work and Income offer placement of multiple candidates to employers to compete with private employment groups supplying labour.

    Employers who want to try out a range of employees before settling on a candidate, or who can accept a changing roster of (part-time) workers (some unable to work holidays replaced by others on the UB who can etc).

    The latter positions would be a help to those on the DPB who are available to work part-time and those with health issues who can only work some of the time. It would certainly improve their chance of finding work.

    This allows Work and Income to work test people and also their “clients” to get paid work. The two concepts work best together, rather than removed from each other as happens now – training for work by specialising in the field of looking for a job and being accountable for ones effort in failing to find work is dehumanising (probably has an adverse impact on peoples well-being).

    Work and Income has a clear speciality role to perform in the labour market that it has yet to take up.

    RECOMMENDATION 16 – Work and Income establish a core related business float, an employment agency for the above purposes.

    No name, nor number. In sympathy with all those at risk if they made submissions under their own names. You all know who they are and why that is. “SPC”.

  2. Having reviewed the heavily loaded questions and the equally heavily loaded ‘options’ that are presented as possible answers to those questions I have deduced that the outcome of this ‘consultation’ is pre-determined. There is no point submitting, except to state that.

  3. Allowing workers to resign within 90 days of taking up a job and going onto the dole – would allow workers to change jobs with lower risk and beneficiaires to try out jobs at no financial risk.

    It balances out the employee/employer rights in the first 90 days – makes it a two way relationship, where each is able to move on with no risk. Allowing beneficiaries to try out jobs at no financial risk reduces barriers to employment.

  4. Those yet to make submissions might like to contest the advice of the Employers and Manaufactuers (northern) who want to end the right of employees who take out personal grievance to get the dole – generally there is a 13 week stand-down for those leaving jobs voluntarily, but this is not applied if they take out a personal grievance claim.

    The Employers group says this encourages people to take out grievance claims.

    Of course if an empoyee has a grievance and cannot get the dole for 13 weeks if they leave the workplace, then they are in a situation where they may face lack of safety (various bullying etc) in the workplace and financial destitution if they leave. Not having the welfare system providing for this will result in real harm to workers – it leaves them vulnerable to bullying – more so with the 90 day hire and fire in place as well.

    Maybe we should submit that employees can resign within the first 90 days and go back onto the dole or go onto the dole?

  5. nzmr2guy, as you have stated you have choices as to whether you put your time into your child or assets. You will have to come to your own decision as to what will present the best outcomes. The highly inflated cost of housing is in my opinion the largest social issue we face. I am disgusted that the last Labour Government chose to subsidies caregivers to work rather than do something about the great pyramid scheme we call the housing market.

    Young children need their caregivers on an on hand bases in order that they develop good emotional regulation abilities. This debate needs to move from who has the money to have kids to how we can ensure that every new human being is provided with the best quality care. A babies brain is thought to be only 15% developed at birth, with most development happening by the age of three. You have only three years to help your baby to grow a healthy brain. You will not get another chance.

    The First Three Years Last Forever

    A baby’s brain is unique and precious. The way it develops will determine who he or she will become. Genes may establish a child’s potential, however it is the day-to-day experiences that will help the child to fulfil that potential. … In particular it is relationally-rich experiences which provide children with the ‘brain-food’ they need to grow into happy, secure and well functioning adults. …

  6. solkta – wow so if the studies are true and accurate then we should expect all working couples to ditch one income for 6 years, mabey sell their home and live in 1 room apartments as home ownership on single income is not possible ?

    Mabey unemployed single mums are the best people to be having kids since they dont have to worry about things like mortgages or earning their own money.

    Perhaps working couples need to forget about having their own children and just suck it up and pay thier taxes so unemployed people on DPB can do all the breeding.

    Thanks for opening my eyes, off to take the wife to the abortion clinic tomorrow.

  7. … or here at the British Psychological Society’s blog:

    Does it matter that young children are spending increasingly more time in day care, as more women than ever before are choosing to return to work soon after giving birth?

    Yes, according to Jay Belsky in his round-up of the main findings from the NICHD Study of Early Child Care in America – “a unique and massive collaborative enterprise”, in which over 1200 children from 10 communities were followed from birth through to starting school.

    Critics of earlier research had suggested the problem of day care was all to do with poor quality, but the new study found that even when controlling for the quality of care, the quantity of day care still mattered. Children who spent early, extensive and continuous time in the care of non-relatives were more likely to show later behavioural problems, such as aggressiveness and disobedience, as indicated by ratings from their caregivers, their mothers and eventually their teachers.

    The type of care mattered too. The study found children who spent more time in a child care centre (as opposed to in another person’s home with a non-relative, or in a home with a relative other than their mother) tended to show benefits in terms of their cognitive and linguistic development, but to also show more behavioural problems, being more aggressive and disobedient.

    Finally, and not surprisingly, the quality of care was also found to be relevant, in terms of how attentive and responsive carers were, and how stimulating the care environment was. Low quality care was particularly detrimental to the children of mothers who lacked sensitivity. High quality care on the other hand was associated with later superior cognitive-linguistic functioning.

    Given these results, and similar findings from British studies such as the EPPE Study, Belsky concluded that policies should be introduced to discourage parents from putting their children into day care for too long, including the expansion of parental leave, and tax policies to reduce the economic factors that encourage parents to leave their children in the care of other people. “Of significance is that all of these conclusions could be justified on humanitarian grounds alone”, Belsky said.

  8. Anway I sent my submission this morning and my emphesis was on part time education and more child minding centers.

    Exactly the opposite direction to the governments current policy!!!!

  9. nzmr2guy, you could start by looking here:

    The Neuroscience Data on Childcare

    …To date, many studies have examined the link between the stress hormone cortisol and the use of childcare in children.

    Research Summary

    • Their main finding was that “at daycare children display higher cortisol levels compared to the home setting.” In some studies the higher levels were obvious in the morning and across the day; in others it was confined to the afternoon levels (cortisol was tested at multiple points).

    • Even with the highest quality of care, an increase in cortisol was still present, though higher quality acted as a protective factor so that the lower quality centres had a higher rise than the higher quality ones. (Quality was assessed on two prongs, one assessing the environment and the other assessing the caregiver interaction and attunement.)

    • The effects were greater for the younger children, especially notable for the children under 36 months (yet still significant for children up to age 6).

    • It should also be noted that the findings are very statistically significant, with a 95% confidence interval and without publication bias. As the authors note in their statistical analysis, “it would need another 19 unpublished studies with null effects for the association of cortisol and daycare to turn the current combined effect size into a statistically non-significant effect.”

    The Hypothesis

    There is a two-fold hypothesis in the field as to why childcare could create elevated cortisol levels in children.

    • One part is thought to be from the stress of separation from the mother/mother figure and the likelihood that it is the mother’s regulating presence that buffers HPA activation in the child, especially for young children.

    • The second part is due to the increased challenge of peer interactions, again especially for younger children (especially under 3’s) who require much more from a regulating attuned consistent mother figure than their older peers who can derive much more goodness from peer interactions. In other words, for a very young child, peer interactions themselves can be a stressful event to be managed, especially before they have reached an age where parallel play has transformed into intentional interactive play.

  10. DNFTT, especially when they’re regurgitating into the hyperbole they’re eating from. Beware the Troll AKA Gerrit because he’s super totalitarianism man… Faster than a crashing stock market, more cunning than a ships rat on the titanic. “Help me Captain Capitalism”, cries the elitist right wing fascists tired from carrying all their loot; “save us from the disgusting unwashed poor”. Gerrit smashes the evil beneficiaries with a whap bop pow of fiscal responsibility! After saving the haggard international whore’s innocence AKA mo money, Gerrit rides off into the distance on his trusty stead named der Fuhrer, never to be seen again…

  11. gee gerritt..that’s a logical/rational connection to make…

    to connnect what those scumbags did with other sole-parents/beneficiaries…

    ..and reason to ‘deal’ to…?

    gerritt…are you one of those paid-rightwing-trolls we have heard about…?

    your yellow-journalism surely can’t be voluntary…eh..?


  12. Many mothers don’t have any money left over after paying for childcare, so there’s not much point working. Might as well stay home and save money.

    Many mothers have children BEFORE becoming single. Those who talk up fears of abuse of the DPB by single women who choose to have more kids never go into much details about the different circumstances that may have led to a women being on the DPB.

    If people didn’t have children in case their partner left them at some point in the future then no one would ever have children.

  13. solkta – I dont think having children in child care from 8:30am to 5:00pm on weekdays is in anyway detrimental to the upbringing of a child, unless you can show me studies to the contrary.

    Id rather freehold my house first and save up some $$$ for the childs education then go down to 1 income. These are important things for a child to have as well.

  14. How does one get a welfare system which offers people a help up – when the TIA is abolished, training places for those who are on benefits are cut back, and the cost of child care goes up (how can women on the DPB with children under 5 take up work?). And these areas are not part of the Working Groups areas of interest.

    As for the media case – the real (child) welfare issue is not whether the parents were on whatever benefit or working, but how CYF can be working closely with the family and yet be reliant on police answering a domestic to reveal what was actually going on.

  15. mzmr2guy, why are you bothering to have kids if you have no intention of raising them. Best left to someone who is prepared to give some time, eh.

    And the “focus” is already on the middle classes with WFF. Are you paying attention?

  16. I hope the paucity of comments on this thread means that lots of people are busy preparing submissions.

    The alternative is that the beneficiary bashers will prevail, because you can be sure they will be advocating people being cast into the streets and children being put into “care”, despite the fact that the only issue for the family is insufficient income.

  17. Oh boo hoo poor parents having to goto work before the child is one. Its called “if you cant afford to have children then dont have them”. My partner is only taking 6 months off then going back to work.

    How long is NZ going to keep paying for these mums to have child after child to loser boyfriends or the ones who pop kids out at the rate of 1 per year so they can get more DPB.

    If anything the focus needs to shift onto middle income people that dont have kids becuase they are to busy working paying for mortgages and feeding their income tax into a system that rewards welfare people for having kids.

    These are the New Zealanders that we want breeding, people that raise good kids and dont rely solely on handouts to do it.

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