Late in January, at Orewa, I gave a major speech on the National Party’s policy on social welfare. Many people asked why I chose such a topic when unemployment is the lowest it has been for more than two decades and, indeed, lower than in any other developed country.
Well, the answer is simple. We might expect, when unemployment is low and when most employers are screaming out for staff, that the number of those dependent on a benefit would be low also. But the reality is very different.
Thirty years ago, the number of working-age adults on the four main benefits – Unemployment, Sickness, Invalids’, and Domestic Purposes Benefit – was fewer than 40,000. Today that figure exceeds 300,000. Add in the children of those adults – nearly a quarter of a million – and we are talking about more people dependent on benefits in New Zealand today than live in Christchurch, Dunedin, Invercargill, and Blenheim combined. And we’re not in a recession!
Even in the last five years, under Labour, the number of those on the Sickness and Invalids’ Benefits has increased by almost 40%, despite no obvious reason to expect the population to have become much sicker and despite a huge increase in government spending on health. Labour projects the total number of those dependent on benefits to increase further over the next three years.
The financial cost of this benefit system amounts to some $5 billion each year, equivalent to about $50 a week for every person in the workforce. The human cost of having people dependent month after month, in some cases generation after generation, is arguably even greater – the demoralising, dehumanising state of being dependent on others for survival.
I made several points in my speech.
First, I made it clear that under a National Government there will always be a community safety net for those who, through ill health, accident, or other misadventure, can not provide for themselves.
But I also made it clear that, for the unemployed who are in good physical and mental health, ongoing financial support beyond some reasonable time required to seek alternative employment should be conditional on the unemployed person undertaking some approved community work or training. There can surely be no justification at all for the taxpayer providing indefinite support to people who are physically and mentally healthy if they are not willing to do something useful for the community in return for that support.
To assist those who find it hard to get employment even in present economic circumstances, I said that it is important that we allow employers the option of hiring people on a 90 day probation period, a period during which the employee may be dismissed without going through the often costly and time-consuming dismissal process currently in place. This would be of benefit to lots of small businesses, but also to those people who are often seen by employers as a bit “risky” – those without much (or any) work experience, those who are a bit older, those who may have had a criminal conviction in their past, those who may not have English as their first language. Reduce the difficulty of dismissing such people and, paradoxically, many of them will find it easier to get a job in the first place – hopefully to prove their value to an employer.
There is, unfortunately, plenty of anecdotal evidence that too many people abuse the Sickness and Invalids’ Benefits – something amply confirmed by the number of times people on such benefits appear before the courts on some criminal charge. They were obviously not too sick to commit a crime!
The next National Government will ensure that all those currently in receipt of a Sickness or Invalids’ Benefit are legally entitled to such a benefit, and ensure also that there is a consistent approach taken to providing such benefits in future.
By far the most difficult area in dealing with the reform of the welfare system relates to the Domestic Purposes Benefit – a benefit which nearly 110,000 adults currently receive. Why? Because this is a benefit paid explicitly to enable adults to care for children, and nobody wants to make any changes which would disadvantage the children of those in receipt of the DPB.
But reform is essential. When the DPB was first introduced in the mid-seventies, there were only some 12,600 people receiving it. Now the number is almost nine times that figure.
The figures are particularly alarming for Maori: of the women on the DPB, almost 40% are Maori. Nearly one-third of all Maori children are now dependent on a benefit. Almost three-quarters of all Maori births are to unmarried mothers. It is idle to pretend that this is anything but a disastrous situation.
What I said in my speech was three things:
An issue which generated some debate at the time was what I said about the difficulty of dealing with situations where women have additional children after becoming eligible for the DPB. At present, there are some 23,000 women on the DPB who have had one or more children after going onto the DPB, some 6,000 who have had two or more, and some who have had four, five, and even more children after going onto the DPB. Clearly, there is a minority of women who have made a lifestyle choice to live on the DPB, bearing children with men who have not the slightest intention of accepting responsibility for the children they father.
There is no simple answer to dealing with this issue. We do not want innocent children to be punished. We do want fathers to carry financial responsibility for their children. At no point did I suggest, as one Sunday newspaper implied, that women should face a reduction in the DPB if they bore additional children while on the DPB. The issue is whether there should be an automatic entitlement to additional financial support when further children are born to somebody already in receipt of the DPB, and I argued that there should not be. Beneficiaries should be required to show some exceptional circumstances in their particular case – perhaps that the further child was born within nine months of a relationship breakdown – before additional support is provided by the nation’s taxpayers.
In response to my late-January speech, the Labour Government has suddenly resurrected the idea of a universal benefit. Steve Maharey first talked about this idea in 2000, and indicated that he hoped to have such a benefit in place by 2002. Thereafter, the idea sank without trace. Now, after my speech, the Cabinet suddenly re-discovers the idea, and Steve Maharey announces that, although he has no details about how the new system might work, it should be implemented in 2007 – conveniently far into the future so that nobody can take the commitment seriously.
The reality is that the Labour Government has no idea how to deal with entrenched welfare dependency, and has taken a number of steps over the last five years to make it easier for people to stay on a benefit indefinitely.
I have said we would get the number of those on the four main benefits down from over 300,000 to 200,000 over a period of 10 years by taking immediate steps of the kind I have outlined. Only National is committed to dealing with entrenched welfare dependency decisively.
Copyright © 2024 Don Brash.