Welfare changes: private profit and political posturing

Did I miss something?

Did the Prime Minister say he was going to work with the business and community sectors to create jobs at a living wage for the 27 percent of young people with no jobs?

No. But he did promise to privatise the management of youth benefits for profit via a food stamps system and require sole parents to be in training.

This is a great opportunity for private providers to get into what could be called “the human misery industry.”

Organisations will have power over young people’s benefits and will supposedly provide them with magical solutions – but with funding linked to how many people they move off the benefit, there will be perverse incentives to move young people into inappropriate placements so that organisations can make a profit.

This has all made me think about the contrasting tone and approach towards youth unemployment in a small rural centre called Otorohanga.

There, Mayor Dale Williams is actually serious about the need for youth to get jobs and become part of the working community.

Dale and a team of committed people from across the community work with high schools to help place school leavers in appropriate job opportunities, and help the young people stay in a community where they are valued.

He is far more optimistic than we are about the Government calling for outcomes from agencies who will be working for a cash bonus, because he comes from a community that works together.

This morning, I was inspired to hear a young woman who was formerly on the Independent Youth Benefit speak on Radio New Zealand’s Nine to Noon show.

Felicity Perry spoke about treating young people like adults so they can become competent at managing their lives.

She has very legitimate fears that agencies will simply place young people in any kind of training or work to get the cash bonus, even if the placement is totally inappropriate. Judging by what I have learned from my welfare tour of both islands, “tick the box” placement is already the norm at Work and Income.

John Key said young sole parents would be required to be in work or training. Because bringing up children isn’t work, is it? Seems like child-rearing is work if you’ve got a husband supporting you, but not if you need state support.

I’d love it if all for young parents had access to Teen Parent Units, but I’m concerned if this policy means separating mothers from their young babies. This could cause serious harm to maternal bonding and breastfeeding outcomes.

A better policy change would be to restore the Training Incentive Allowance to support young parents to study at University. That’s how Paula Bennett got her degree, but she has kicked the ladder out behind her.

In his speech, John Key asked if the numbers on young people without jobs was what the architects of the welfare state had in mind.

We need to remind him that the welfare state was built on three principles: state housing, full employment, and fair benefits for people who needed them. His Government has shown no interest in any of these principles and has now committed to scapegoating instead of job creation.

It’s getting more like David Cameron’s UK Government by the day.

24 Comments Posted

  1. I am probably going to have to continue to disagree with you on whether that way is more viable.

    Proposing the amount of money required to bring those in beneficiary family children out of poverty applied across the board is something that should get the response but we could achieve all of that at much less cost by targeting help (by simply puting healthy meal food in schools in poorer areas, ensuring rental property was insulated, realising ell Child and B4 School universality, improved work capability investment, this and that … just go through the party programme …).

    But if you were seriously arguing for that approach what universal provision (in kind rather than cash) would take the children out of poverty.

  2. Adding in the WFF tax credits to the benefit child payments and equalising the amount and dispersing it universally to all children would result in less support to the low wages and those on benefits, not an increase.

    I DID say it would cost more. It has to cost more if it is to do what is intended to do. TANSTAAFL applies here.

    Better off kids get X. Less well off kids get X/3. If all the kids are to get X, then it is going to cost us more than X + X/3… This is obvious. Don’t argue with me.

    The single advantage is that the method would shut the pieholes of the assholes on the right. They would be compelled to be far more obvious in their attempts to rob the kids to pay for the tax breaks for the wealthy.

    Which would make it a lot easier to make the case for the added investment.


  3. Something I have not seen covered yet is the relevant statistics covering these areas.

    How many 16 and 17 year olds have registered as unemployed and looking for full-time work with Work and Income?

    How many have left school at age 16 or 17 and not registered with Work and Income, nor were in any training or work experience?

    How many unemployed youth are truants and left school before the age of 16 (and are now 16 or 17 and not employed or in any training or registered with Work and Income)?

    This government does not seem to even know the extent of the problem it is throwing $20-25M at (money cut from TOP’s programmes being re-allocated).

    How can it give us figures unless they only involve the first group, those who register with Work and Income (or those who fill out household surveys)?

  4. bj chip

    If there are to be consistent principles to in kind delivery, then we would have to either limit it to work tested benefits (excluding super and some of those on the DPB) or to where there were transfers to those looking after children (and that does not involve all beneficiaries and includes WFF).

    However as to universal provision outcomes, I am not sure that they would be better than realised now.

    Adding in the WFF tax credits to the benefit child payments and equalising the amount and dispersing it universally to all children would result in less support to the low wages and those on benefits, not an increase. Any improvement could only come from any in kind component to the delivery not from the universal provision – in cases of poor parental care.

    It’s easier to reduce child poverty with targeted healthy food meals in some schools and the required insulation of rental property. That and better Well Child B4 School programme “universality” and less failure in schools.

  5. SPC

    If some old fart like me screws up and goes broke while on retirement, the person hurt is the old fart, not some kids who need a fair shot in life.

    That’s the difference as far as I can tell. The kids. As for your confident predictions, I can confidently say that you’re right in that there’d be stuff all in the way of support for doing it.

    Doesn’t mean it isn’t a right way to do it, because the WFF supports and other supports would go into the overall support and then you’d have to raise the level so that the kids who are currently middle-class and upwards who benefit from WFF would not see a reduction of services and the ones who are currently holding the short end of the stick would see an improvement in their situation.

    Which is how it gets done right, non-discriminatory and the kids get fair shares.

    We aren’t anywhere near that level of fairness or and National has not even the ambition to move in the direction of fairness.

    I am more to the point of pointing out that however we “oppose” this we have to be damned careful to NOT appear to be wanting to hand money to people who will simply waste it.

    We don’t want to do that really, and it doesn’t happen all that often really, and it isn’t the problem the right makes it.


  6. The government should be developing the in school programmes for those who don’t want to continue with formal NCEA education, but need help with gaps in their education, some relevant life skills, and training focused on getting them into work – related to work experience placements. Thus fewer 16 and 17 year old school leavers without jobs etc.

    As for the the over 10,000 school leavers looking for work and not yet 18 and getting the IYB or UB, how many are finding it now (with or without Work and Income involvement) without paying incentives to anyone? Apparently they have no idea, yet say 9/10 go onto the UB at age 18 (9/10 of those on the IYB or teen mothers not yet getting DPB?).

    ps The 1600 on the IYB can be required to do TOPS course now, so this changes little. They cut funding for TOP’s courses and now incentivise private groups to establish separate programmes for those under 18. I wonder how many will get money for passing an 18 year old onto their TOPS course?

  7. In addition to the 1600 on the IYB there are others, not mentioned in this reform, supported by the Away from Home Allowance paid to carers while 16 and 17 year olds are in employment related training or tertiary training. How many of these situations are there and will the same payment system be used for them now?

    Also how many cases of teen mothers are there under 18, we know of the 1000 18 year old’s on the DPB covered by this, but how many younger mothers are there (supported by parents) and can they be required to do anything?

    It’s entirely reasonable to seek to identify and remedy the gaps in education for the over 10,000 youth aged 16 or 17 not in school or yet able to receive the work tested UB (seek information from the schools) – but this can only work if there are incentives to accept further education and training and there is no ability to require anything of those supported by their parents. Private providers “to obtain the cash bonus” will have to attract participants from this group.

    One might add how many under the oficial school leaving age of 16 are also absent from any education or so often truant it is much the same thing.

    The idea of providing paid child care opportunity to teen mothers to continue their education and or training is a good one but any requirement to work would be inconsistent with the regime on older mothers (and what is the assessment on the right amount of time for the mother and child bond to occur before such course placements are made?), providing similar opportunity to older mothers comes via maintaining TOPS places and hopefully a restored TIA.

  8. bjchip,

    I confidently predict that there will not be much support for

    1. a universal level of support for all children, because of the greater cost of across the board provision and lack of need in many cases. It would result in less support for those in most need and thus not directly impact on child poverty.

    2. support for delivering in kind support for all “transfers” whether benefits or tax credits via WFF. And why exclude tax paid super from payment in kind just because the payment is universal and not based on need like the others?

    Reducing transfer payments to in kind is suggestive of ensuring the poor are deserving of their support and cannot be trusted to use the money properly (wherever they are on less income and or have more children than those providing the transfer payment).

    PS Are not 1 and 2 mutually exclusive?

  9. why am i going into moderation…

    ..and does everyone else have to re-log-in most times they come here..?

    ..(as in multiple times in a day..)

    ..keith locke isn’t running moderation/the site..is he..?


  10. these (degenerate) 16-17 yr olds on benefits…

    …should be able to walk straight into budgeting-advice jobs..

    ..or jobs as economists…

    ..on just $167 per week..they are able to house/feed/heat/transport themselves..

    ..and to spend their days/nights either pissed off their heads…or off their tits…on a cocktail of illegal drugs…

    ..or a mix of the two…(!)

    ..how they are able to manage all this on just $167 per week…

    ..has me flabbergasted/in awe…

    ..at their economic-management skills..

    ..and how they are as a matter of fact..

    ..setting new benchmarks in stretching-dollars..?

    ..every day/as we speak…

    ..(or..are there some untruths being told/spun here…?..

    ..some black-propaganda…as it were..

    ..maybe even up their with farrars’ nadir…?

    ..his fake-beneficiary…(maori..of course..!..)

    …sitting around with her other sole-parent mates..

    …drinking beer…and waiting for the takeaway pizzas to arrive…

    ..and laughing out loud at her mug-neighbors as they leave home to go to work…

    ..methinks there is more than a touch of that yellow-journalism-farrar-black-propaganda in these urban-myths of 16-17 yr olds on a benefit..

    ..both having their (dope)-cake…

    ..and being able to eat it…


  11. Sure there are teenagers running around getting pissed and into trouble.

    I seem to remember, back in the dark ages, our employer having to look the other way over some of our shenanigans when we were apprentices also.

    I’ve had lots of the same kids on work experience and as apprentices.

    Give them a tough job and some responsibility they shape up fine. Just like we did.

    Funny how few chose to remain unemployed when the work is there.

    MS wants to blame the unemployed for the fact there are no jobs.

    A situation caused entirely by the incompetence of those in power.

    Should sack them and leave those jobs open to someone who can do them properly.


  12. The 30 million was from a Government department.

    Not to mention that most fraud and overpayments are the fault of WINZ staff.

    I don’t like my taxes to be given to the indolent unemployed either, but right wing Governments seem to like giving money, to ex politicians and failed financiers.

  13. Kerry’s simplistic comparison of “16 Million in welfare fraud. 30 million by one whitecollar fraud alone” fails on several points: the first is that fools chose to put their money into finance companies, but taxpayers have no choice about the money taken from them and given to the indolent.

  14. There should be no discrimination, benefits in general can be provided in kind rather than in cash, both to the “beneficiaries” and to the folks getting “working for families”.

    This should ONLY be done by the State. The administration of it accountable to the parliament and the people. The “private enterprise” religious experience for the right wingnuts be damned.

    There can be no bonus in pushing people into jobs. If the jobs are there, people will take them. Arranging things so that the jobs ARE there can be done by smashing the “free trade” zombies and actually protecting NZ industries. This makes things we commonly get from China now, cost more.

    The overall level of support has to be significantly raised, so that every child of every family gets a similar level of support.

    I am no believer in “beneficiary bashing” but the ease with which this ragged notion is used to mislead the majority of New Zealanders makes it a dangerous dangerous issue, which we can misstep on far too easily.

    We have principles which CAN be upheld as we lift beneficiaries and their children out of poverty, either in cash OR in kind. National has no “lifting” in mind save the boot up the bum, but they’ve grabbed this rag and they are waving it wildly and it will make good politics for them with middle New Zealand.

    Even as reprehensible and ill-thought a policy as it is.


  15. National is not going to do anything serious to reduce beneficiary numbers because it will mean reducing the tax cuts for rich thieves.

    16 Million in welfare fraud. 30 million by one whitecollar fraud alone.

    All this bennie bashing is to take attention from the people who are really taking taxpayers money off them. These beneficiaries.

    “Politicians who accept an income from the people of NZ, while they sell them, and the country out, to their sponsors from private corporates”.

  16. a question that bennet should be asked is:

    ..how many of those 1600 targeted teenagers were state wards….

    ..who have gone from state care onto the benefit…

    ..and don’t they already have ‘case-managers’..?

    ..so why this new privatised/profit-driven ‘scam’…?

    ..twenty-five million…eh..?

    ..that’ll be a nice little earner for some gummint-friends..

    ..(form an orderly queue – on the right…)



    I agree the scrapping Training Incentive Allowence is absolute hypocricy comming from Paula Bennett and she was very lucky to have that assistance to help her get where she is now.

    If I remember correctly at that time the TIA was only for available to single parents? I was critical of it for not being available to everybody but it has been scrapped. Sad!

    As for these job agencies they won’t give a stuff I know which way this is going; ‘get the mass of school leavers to go straight into low paid unskilled work for the large foreign cartels pushing junk food!!!’

    Is that the vision the NATS have for the young of this country?

    Don’t we want as many of our youth at university and technical training institutions as much as we possibly can?

    ‘Oh but that might increase the tax bill on our mates’ they will retort.

    And so New Zealand like the UK will have a generation of youth without skills and without a future.

    And what will be the underclass’ response to that?


  18. On the issue of teen parents (16-18 and probably 16 to 19 within 3 years), it is to be hoped that every effort is to be made to have the childcare on-site with the training/education, but not all teen mothers will be living near these centres (existing and or new ones). There is sufficient evidence that those supported to complete secondary schooling at teenage mother centres can go on to tertiary study and the TIA was a key part of this success.

    However reducing the incidence of unplanned teen pregnancies is as importand and here there needs to be a double safe campaign – the condom is not enough (it is in addition to birth control).

    Of course some teenage mothers are not intent on tertiary study or of even completing secondary schooling, and clearly the government is determined to end the incidence of planned pregnancies by teens who drop out of school for a life on the benefit.

    It seems the deterrent is required work or training (most likely covering gaps in their education at first) and the restraint on their use of the benefit money. One hopes that Well Child (B4 school) progamme is part of the package.

    This is all modelled on the USA concept that solo mothers work for their welfare – given their low minimum wages this is an accurate description, but it leaves them unskilled workers dependent on learning new skills in the workplace and can result in a lifetime of poverty for them and their children (and some hope they will be induced to adopt out their children under the adversity of the experience).

    Applied in New Zealand to those 16 to 18/19 and unable to attend “urban” teenage mother centres there will be “whanau” care providers for the child or “whanau ora/private” providers that will both care for the child and provide schooling/training for the mother.

  19. Of course this may just be the start of a new round of ‘beneficiary bashings’ ?
    Its one thing to say “get a job” but, when 3000 people line up for a hand full of supermarket jobs paying minimum wage, it is time to start wondering “where the hell are these jobs.. of which they speak ?”
    If Key & co. are genuine about getting beneficiaries back to work, they need to start answering this question.. “WHERE THE HELL ARE THE JOBS Mr. Key ??”

  20. At least we know that the money from cuts in funding for TOPS is to go – for training programmes for about 10,000 people who are 16 and 17.

    The TOPS programme has been managed by cutting funding if not enough people go onto tertiary education or work, now private groups get a bonus if people are so placed (how many will simply move onto a TOPs course when they turn 18 – a great way for these providers (if they can get involved) to get to make some money prioritising places on their TOP’s programmes.

    As for the funding – apart from the 1600 who get the independent youth benefit (many ex CYPS) there is also an existing system called the Away from Home Allowance (a weekly payment to carers to cover the living costs of 16 or 17 year olds who are living away from home while on a tertiary or training course/approved employment related training).


    As for those youth renting, paying for power, land-line phone and or cell phone (and internet?) one wonders if and how limits on these costs will be set, let alone how advance payments of benefit to these people will be regulated.

    Advance Payment of Benefit
    We generally pay the supplier for the goods or services you need (eg appliances, furniture, bedding, rent or school uniforms). You’ll need to pay us back but may be able to do this in instalments.


    PS My advice on a policy for 16 and 17 year olds who are out of the school system is they be offered (some of the time) to employers as free work experience labour, get gym membership (and or assistance into team sport/fitness training/outdoor activities), are used in work schemes, otherwise receive help with any gaps in their education and are guided towards preparation for some form of vocational training/apprenticeship.

  21. So the State is going to pay childcare so young mothers can work.

    Childcare is only work, apparently, if you are paid to look after someone else’s toddler.

    Why not just pay the young mothers to look after their own children and send them to school at the same time.

    Key even went to the opening of new classrooms for a, very successful, school for young mums in Whangarei. (Funding was approved by Labour).

    Unfortunately funding to extend successful educational programs is not a priority with National.

  22. “John Key said young sole parents would be required to be in work or training. Because bringing up children isn’t work, is it? Seems like child-rearing is work if you’ve got a husband supporting you, but not if you need state support.” Exactly! That’s the way they’ve always thought…

  23. Mr Key has said he was going to move away from the ‘Nanny state’ & NOT increase GST ! Looks like he has broken both of these ‘promises’ to the people.
    I’m sure this N-Act Govt. is intent on creating an under-class in Aotearoa.
    Look at what has just happened in UK ! Revolt (riots & looting) by the underclass. Watch Out…

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