An afternoon at the $8.95 Welfare Forum

Yesterday, I went along to the $8.95 Welfare Forum organised by the Alternative Welfare Working Group.  I was pleased to see around 100 people turn out – twice the number I’ve been told were at the $895 Welfare Conference opened by Paula Bennett yesterday.

Minister Bennett was, as I expected, a no-show at the $8.95 Welfare Forum.  She seems to only listen to those she wants to hear, and beneficiaries and those working to support beneficiaries don’t appear to be among them.

I found Alternative Welfare Working Group Chair Professor Mike O’Brien’s address particularly interesting.  He said that several social policy academics had commented to him that the Welfare Working Group’s report [PDF] was one of the most academically unsound pieces of social policy work they had seen.  Professor O’Brien said the Welfare Working Group had started with the “answer” which the government wanted, which was a crackdown on beneficiaries, and then posed the questions that led to that answer.

Professor Paul Dalziel from Lincoln University pointed out that the Welfare Working Group attempt to portray some sort of “crisis of sustainability” in the welfare system was not backed by the evidence.  Welfare payments as a percentage of GDP are actually dropping and will continue to drop, even under the Welfare Working Group’s worst case scenario.  As I suspected, the whole basis upon which the Welfare Working Group’s report was based is flawed.

Kay Brereton from the Beneficiaries Advocacy Federation followed Professor Dalziel, saying that there was a crisis with Work and Income, but that the crisis was operational, not fiscal.  She talked about the difficulties people have getting benefits already.  She produced figures showing that a full 46% of people who attempt to apply for an unemployment benefit haven’t been granted it within 28 days.  That is something I am going to follow up.

Even more bizarre was Kay Brereton’s revelation that people were having their benefits stopped for failing to turn up to job-search seminars because – wait for it – they have taken on some part-time or casual work on the day of the seminar.  And these things are happening now – before any of the recommendations of the Welfare Working group have been considered.

The most inspiring part of the $8.95 Welfare Forum was that so many groups are planning to take action to oppose the Welfare Working Group’s punitive recommendations being introduced. Actions proposed ranged from sending postcards to direct action protests at National MPs’ offices.

And here’s an action you can take right now.  Send Paula Bennett an e-card asking her to reject the Welfare Working group’s report. New Zealand kids deserve access to essentials and opportunities, especially in hard-times. Cutting benefits, work-testing parents, and targeting the disabled will leave many people and their children out in the cold.

15 thoughts on “An afternoon at the $8.95 Welfare Forum

  1. It is troubling that this issue fell below the radar because the Welfare Working Group released it report on the same day as the February Christchurch earthquake.

    Well done Metiria, for trying to get a debate happening. The Welfare Working Group are proposing Stage 2 of the Ruth Richardson / Jenny Shipley reforms of 1991.

    They failed then – beneficiary numbers kept growing and fewer people could find work.

    How come anyone thinks repeating the same agenda will produce a better result in getting people into employment today?

    More likely it will just produce another generation of the Children of the Mother of All Budgets.

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  2. toad and Metiria – if the report is so terrible, please tell me what you don’t like about their reccommnedations for –

    – more help with availability and funding of early child care
    – spending hundreds of millions MORE in job planning and search programmes, and intensive support services
    – more help with accomodation costs
    – more help for unemployed to do terrriary study
    – more help with after school child care
    – additional supplementary payments to help with costs to set up for a new job
    – help with shifting costs if moving to another town for work
    – reducing fraud

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  3. photonz

    No one is attacking the WWG for the focus on improving work capability – critics of the governments work testing regime (myself included) proposed these ideas (and more) as things that would have to be done before work testing can deliver results.

    It’s the unsubstantiated claim of unaffordability and radical ideas for work testing an extra 100,000 people without necessary preparation (or an economic environment where the jobs are available) and insurance modelling (enabling privatisation) that is problematic.

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  4. toad – your graph is nonsense. It says we spend just 2% of gdp on benefits.

    Our gdp is $140 billion. Our spend on social security is $22 billion – That’s 16% of our gpd.

    Take off superannuation, and our spend on other benefits drops to $12.5 billion. That’s still 9% of gdp. (4 times what your graph says).

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  5. Photo, I believe that Toad’s graph only looks at benefits such as the Unemployment Benefit and doesn’t look at all the add-ons such as the Accommodation Supplement. Really, the elephant in the room is those add-ons as well as New Zealand Superannuation.

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  6. @photonz1 11:44 AM

    It is not my graph, it is Professor Paul Dalziel’s graph – sourced from Welfare Working Group material.

    And, yes, as john-ston has suggested, it is just working age benefit expenditure (i.e. unemployment, sickness, invalid’s and domestic purposes benefits).

    It doesn’t take into account accommodation supplement – if the Welfare Working Group proposals are adopted and people are shunted off benefits into minimum wage jobs (assuming those jobs exist, which under current policy settings is unlikely) they will still be eligible to receive accommodation supplement.

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  7. Invalids benefit numbers have increased around 1000% in 30 years.

    Sickness beneficiaries 500% in 30 years.

    The problem with these benefits (and ACC) is they concentrate on what can’t be done.

    As the WWG says, that need to be changed to what CAN be done.

    Why do we let people stagnate on ACC or an invalids benefit for decades, when they could retrain into a different profession where their disability has little consequence.

    We have people in wheelchairs, and people missing limbs, with successful careers.

    And we have people with just a fraction of those disabilities who are written off for life.

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  8. toad says “it is just working age benefit expenditure (i.e. unemployment, sickness, invalid’s and domestic purposes benefits).”

    Even if it missed out all the supplemetary benefits like accomodation, the figures for only what is on your list above, would still come to nearly twice what your graph says.

    And if you are counting the real cost to the taxpayer of what it costs to keep people on a benefit – WHY would you omit their accomodation supplement (and numerous other supplements) unless you were trying to distort the figures?

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  9. photonz –
    Toad @ 12.05pm yesyerday said:
    ‘It doesn’t take into account accommodation supplement – if the Welfare Working Group proposals are adopted and people are shunted off benefits into minimum wage jobs (assuming those jobs exist, which under current policy settings is unlikely) they will still be eligible to receive accommodation supplement.’

    Which part of that don’t you understand? Ordinary low-paid working people get that as well as unemployed, etc beneficiaries.
    Those supplements are not in favour of the beneficiaries – they keep income flowing to landlords, they keep the price of rentals up (if the accom benefit faded overnight, landlords would have to reduce rents due to falling market…) and they subsidise employers who are not paying a living wage.

    Obviously, landlords and employers must not have their profits damaged – so those supplements are kept outside of all of the WWG discussions – which are merely about decreasing the amount beneficiaries can spend on food, heating, telephone, medical, school costs, clothing for growing children (many of us relied on rich people throwing out clothes to the charity shops, you can’t buy fabric & sew clothes as cheaply as you can get them in some opp shops).

    Our whole economy is skewed by this insistance that the very rich pay little tax, they get subsidised hugely by the state to pay workers low incomes, and then they invest in residential property, not industrial or commercial property, so the state gives them a top-up again by subsidising the expensive rentals charged to the ‘un-homeowning’ classes.

    Why aren’t there any jobs? Because employers and investors have no incentive to take the risk of growing industrial capacity in NZ, when they can cream income from residential rentals in this economic climate.

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  10. @photonz1 12:06 PM

    Invalids benefit numbers have increased around 1000% in 30 years.

    Invalid’s benefit numbers are always going to track upwards because the qualification for this benefit is that a person has to be “permanently and severely” incapacitated for employment. So once someone goes onto it, he or she usually only goes off it by either reaching the NZ Superannuation qualification age or by dying. So the inflow is always going to be significantly greater than the outflow, hence the significantly increased numbers.

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  11. toad says “Invalid’s benefit numbers are always going to track upwards because the qualification for this benefit is that a person has to be “permanently and severely” incapacitated for employment. ”

    Why then did they trend downwards or remain static for 35 years, then skyrocket?

    Why do we have ten times more invalids today, when working conditions are much safer than in the past? And about 7 or 8 times more than we had at the end of the war.

    katie – it’s obvious from your comments that you haven’t actually read the report.

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  12. @photonz1 2:35 PM

    This research may assist your understanding, photonz1:

    # In the period of full employment, many people with poor health and disabilities were “carried” within the employed workforce. These people had incapacities sufficient to qualify them for incapacity-related benefits but, given the labour market context at that time, these did not stop them from working.

    # With economic recession, people with poor health and disabilities were more vulnerable than others to job loss. Some went directly on to incapacity-related benefits, but others who viewed their status primarily as unemployed took up unemployment benefits. Many in this group remained at the back of the queue for new jobs because of their poor health or disability, particularly when this was compounded by low qualifications, older age or other disadvantages. They remained on unemployment benefits for long periods as a result.

    # Through disillusion with their prospects as job seekers, or as a result of being moved by the employment services or by benefit administrators, they progressively moved on to incapacity-related benefits.

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  13. toad – thanks – good info. It appears there was also some benefit swapping because of higher rates and work testing.

    I think the EEG report should be looked at seriously rather than be used as nothing more than a political football – it contains a significant amount (hundreds of millions of dollars) of recommended extra spending to help people get into work.

    It’s not the one-sided document that some try to make out, presumably for their own political purposes.

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