Welfare Reforms and Inequality

I’ve been reading the great book by Max Rashbrooke “Inequality a New Zealand Crisis” which should be compulsory reading for anyone concerned about our moral, social or economic welfare. Two quotes in the first chapter stood out for me in relation to the welfare reforms that have just come into force:
Adam Smith recognised over 200 years ago that ‘the essentials of life are not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people… to be without.’
The economic historian RH Tawney stated that ‘a good society is not just one in which people can rise, but also one in which ‘they should be able to lead a life of dignity, whether they rise or not.’
Under the most recent welfare reforms, the potential for a life of dignity for beneficiaries is even further eroded. This government is making it increasingly clear that those who require the assistance of the state are of no worth.
Income support levels in New Zealand were consciously set below the income poverty threshold in the 90s as an incentive to get people into work. Apart from being adjusted in accordance to inflation, income support has not since changed and the gap between benefit levels and the average wage has increased. There are many negative consequences of this: the driving down of wages and work conditions; an increase in part time and casual jobs meaning people struggle to afford to cover the costs of working (childcare, transport, etc.); over ¼ of a million children in poverty, which has lifelong consequences; people with serious disabilities and illnesses no-longer being able to participate in society… the list goes on.
This has consequences for all of us. It means we are missing out on the contributions of thousands of people, undermining the potential of a large segment of the future workforce that we are going to be increasingly reliant on as the population ages, and fomenting discontent and ill health that will harm us all.
Beneficiaries are already the most discriminated against group in New Zealand. We all know the myths that beneficiaries are job avoiding, lazy, pot smoking criminals who neglect their children.
The latest reforms will do nothing to fix this. The latest reforms exacerbate this. They focus on the person on the benefit as if they’re the problem.
The reforms require parents to enrol their children in a PHO and complete all ‘WellChild’ checks and ensure their children are attending ECE or school. If they do not comply with these regulations they will lose half of their benefit. These are not things required of other New Zealanders. These are not even required of other New Zealanders receiving income support in the form of Working for Families.
The reforms increase work testing requirements as if people will not seek work themselves without the threat of getting their benefit cut (as if Rotorua has 7000 jobs available for people not already in the workforce!).
The reforms will increase medical testing of people with impairments or sickness and increase work testing responsibilities. Again, as if people are trying to avoid work and as if people with impairments aren’t in the words of one of the submitters on the bill “the most tested and assessed people in this country; subjected to tests from birth.”
The reforms bring in sanctions for failing a drug test and all people in the job seeker category are now warned they need to be drug free. This includes grandparents looking after children over 5years of age and people with non-terminal cancer diagnoses.
The reforms bring in financial sanctions if someone has an outstanding warrant for arrest and all beneficiaries are warned about this.
These reforms add up to a familiar picture… of beneficiaries as being job avoiding, lazy, pot smoking criminals who neglect their children.
The cost of that stigma alone will run much deeper than any potential benefits. When combined with a real job shortage and poverty level wages, then we are left with a social and economic disaster.

4 Comments Posted

  1. I don’t have a problem with laws to stop ‘welfare fraud’ or people claiming monies that they are not entitled to.. BUT the current law change is just proof of this Govt. ‘neo-liberal’ extremist agenda coming into play. I’m certain there are elements in the N-Act coalition that would like to see the welfare system abolished along with minimum wage & other ‘workers rights’ in favour of more power to the employers etc.

    This regime of drug testing beneficiaries is further removing civil rights.. why not level the playing field & include Alcohol & Tobacco, if they are genuinely concerned about ‘drug use’ being detrimental ?

  2. ** Yes i strongly agree with the last paragraph of your writing…
    “The cost of that stigma alone will run much deeper than any potential benefits. When combined with a real job shortage and poverty level wages, then we are left with a social and economic disaster.”

    In my view this govt has gone all mad…they keep screwing those most vulnerables in our society, while indulging those rich fews (and big businesses). Ignoring the fact this will cause so many more social problems (crime rate rise will be one of many) therefore the social instability, the whole society will pay a very dear price for such thoughtless “welfare reform”.
    Why tax payers are paying big salaries to these govt officials who refuse to use brains?

    This govt does its best to divide our society; make people with jobs hate those without (instead of blaming this useless govt for implementing so many bad policies which cause losses of so many jobs), make Pakehas hate Maoris (or vice versa), make locals hate immigrants, plus many other examples. National knows best about; when you divide people, people are too busy hating/fighting each other to remember the Nat. govt is actually the only one to blame…

    In the mean time this govt keeps wasting huge sum of tax payers money on dumb projects, with amazing incompetence…again, too many examples!

  3. Robyn: I too am a believer in poetic justice. “What comes around goes around” and “You reap what you sow”

    But alas that can’t happen until people make it happen, we make our own justice.But through out history ruling elites want us to believe that justice belongs to the hereafter.

  4. Just discovered some benefits are being handed over from WINZ to other organisations to make decisions. Also there will no longer be a special manager as referee for clients so any officer might deal with a query.

    Imagine the day when all benefits are handed to private organisations. They will expect a fee for the service, benefits will be cut back to cover the cost of the fee.

    If there is a benefit for folk looking for work, where are they supposed to look, those who thought Australia was Eldorado have discovered the streets are no longer paved with gold.

    Maybe one day we shall have a government that actually creates jobs instead of hand outs. It is a human right to earn the price of your bread by the work of your hands.

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