by Metiria Turei
At page 60 of its report (PDF) the Welfare Working Group suggests:
From the modelling reported in Chapter 10, we are of the view that the evidence from welfare reform in New Zealand and overseas indicates that a reduction of around 100,000 people [in receipt of working age benefits] is very ambitious but feasible.
Let’s put that into context. In the two years between December 2008 and December 2010 the number of people on working age benefits increased by 67,000. So the Welfare Working Group’s target for reducing the number of people on working age benefits over 10 years is only one third more than the increase in beneficiary numbers over the last two years.
And in the five years between December 2000 and December 2005 the number of people on working age benefits dropped by a whopping 90,000 (or 90% of the Welfare Working Group’s 10 year target) from 392,000 to 302,000. That was without the punitive measures the Welfare Working Group is proposing to introduce – in fact the work-for-dole schemes and work-testing of single parents that had been implemented by the last National-led Government were abolished early in that period.
So much for ambition! The Welfare Working Group doesn’t have any more ambitious target for reduction in beneficiary numbers than would seem likely, given past experience, to occur anyway given reasonably favourable economic conditions and sound economic management.
So why is the Welfare Working Group proposing its beneficiary bash-fest? One clue can be found at pages 155 and 156 of its report:
Some submissions on our Options Paper argued that Government should be more proactive about creating a vibrant labour market that generated more jobs. For example the New Zealand Chambers of Commerce argued that ‘reforms to increase flexibility of the labour market and remove barriers to employment are possibly the single biggest thing the Government can do to reduce benefit dependency’.
Mandating minimum terms and conditions – for example through minimum wages, dismissal provisions and minimum leave entitlements – involve a balance between job creation and protection of vulnerable employees. The OECD urges care in the use of such policies as they sometimes have the unintended consequence of reducing employment, often among the vulnerable workers the policies are designed to address.
We are of the view that employment growth is an important area, and Government should undertake an investigation into whether labour market barriers to employment need to be addressed as part of a strategy to reduce welfare dependency.
The agenda they are promoting is that of the far right. It’s all about forcing upwards of 100,000 more people into the labour market to compete for jobs that don’t exist. More competition for the same number (or fewer) jobs helps to drive down wages. That dovetails nicely with National’s other policies, such as its 90 day fire at will law, its restrictions on union entry to worksites, and its nil (real) increases in the minimum wage. Nicely for employers, that is.
People in employment on low and middle incomes have as much to fear from the Welfare Working Group as beneficiaries as they will all be forced to compete for the McJobs these policies will create.