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Welfare Policy Workshop Reportback

Sunday 11th Mar 2001 Dr Muriel Newman Speech -- Social Welfare

Delegates, it¡¦s great to see so many of you here supporting the party. A special thanks to all of those people who contributed to the development of welfare policy. I¡¦d like to take this opportunity to share some of our ideas with you.

Welfare is arguably the largest and most difficult challenge that this country faces. Having said that, I would suggest to you that only the ACT party has the courage to say that the welfare system is failing, that we need a fresh new approach if we are to become 10th by 2010. To change the system needs leadership, conviction and a clear sense of purpose. Tinkering around the edges is not the answer. Only ACT has the courage, the vision and the plan.

I¡¦d like to remind delegates that welfare wasn¡¦t always failing. In 1938 Michael Joseph Savage introduced a welfare system that gave a hand up to work. It served us well for almost forty years. Right up until the early seventies the numbers on welfare remained constant with less than fifteen thousand people receiving a benefit as their major source of income.

It all changed in 1972 after the Kirk Labour Government introduced the no doubt well-meaning recommendations of the Royal Commission on Social Security. As a result, the incentives that underpinned the welfare system were fundamentally altered.

Benefit eligibility was changed from being based on need to being a universal entitlement; benefit levels were raised similar to a working wage; and a statutory benefit was established for sole parents with dependent children.

As a result, welfare numbers escalated. Over 422,000 working-age people now receive welfare assistance; a benefit trap has been created entrenching families and communities in second and third generation dependency; and family breakdown is rife „o by the year 2010, if present trends continue, half of all European and three-quarters of all Maori infants under one year old, will live in families where there are no fathers.

The associated systemic problems of child abuse, alcohol and drug addiction, teenage pregnancy, youth suicide, educational failure, violence and crime are at the heart of our social decay „o the effects are damaging our children and young people on a daily basis.

We cannot stand by and see the damage grow. ACT has a moral imperative to turn the situation around. We must design a system that empowers, liberates, strengthens, and offers hope to those families who are presently the victims of the welfare trap. We know being dependent on the state is a high-risk position „o because it is the state that controls the rules. True security comes from being in control of your own life.

We need to redefine welfare so we do give people back their lives, keeping in mind that fair-minded Kiwis know that there are no free lunches.

Welfare for the able-bodied must be a safety net. It should provide temporary financial assistance and help while someone finds a job. Because we now have so many people alienated from the workforce, the redefined system must expand opportunity, yet demand responsibility in return. The concept of mutual obligation should underpin welfare, with job seekers taking part in job-enhancing activities in return for a benefit.

The reality is that for those who have been out of the workforce in the long-term, finding and keeping a job is not easy. As a result, it should demand a full time commitment. Welfare should require a mandatory programme of full-time activity, forty hours a week, so that it¡¦s easy to move into a paid job.

Such a programme would match people with opportunity and skills „o education and training, job search and community work, CV writing and interview techniques, adult literacy and numeracy, drug and alcohol rehabilitation. Whatever support is needed to help a job seeker overcome the barriers to employment should be provided.

The work ethic needs to be re-established within the welfare system. Everyone who is prepared to try should be given a helping hand to get on the first two or three rungs of the employment ladder. Work enhancing programmes should model the workplace, building the skills, habits and attitudes needed to find and keep a job. Such programmes should have similar sanctions to the workplace: If someone turns up late they lose some of their benefit; those who refuse to participate must be prepared to lose their benefits entirely.

With so many able-bodied people on welfare for so long „o ten, twenty, thirty years „o we need to create a sense of urgency about moving off welfare by looking at time limits for receiving welfare continuously, and over a lifetime.

Sole parents are often locked out of the workforce because of their parenting responsibilities. Research demonstrates that children growing up in families without a working adult as a role model are disadvantaged. Sole parents must therefore be provided with childcare assistance so they, too, can participate in work enhancing programmes.

Of all families trapped in long-term entrenched dependency, the majority entered the welfare system as a teenage mother who dropped out of school. For these young women opportunities for finding paid work and becoming self sufficient and independent of the state are limited. To provide adult guidance and supervision, and to encourage teenagers to postpone parenting and complete their education, teenage mothers should be counselled to live with their parents and finish school. The fathers of their children must be held to their parenting responsibilities and required to pay their dues.

Teenage parents wanting to establish independent households should no longer be eligible for cash payments, although all of the other job enhancing programmes, including childcare assistance, should be provided.

Families have been society¡¦s traditional way of nurturing and protecting children. Yet owing to 30 years of state intervention through laws that undermine the family unit, our levels of family break-up are now greater than those of other OECD countries. We lead the world in child abuse, child homicide, teenage pregnancy and youth suicide. The state has been successful in breaking up the family, but spectacularly unsuccessful in protecting those children and young people from harm.

As a country we will not turn this situation around until we rebuild the family. That is why ACT must look at implementing shared parenting to ensure that at the very least, in the event of family breakdown, children can count on the support and protection of both their mother and their father, their grandparents and the rest of their family as well.

Under shared parenting, child support contributions should be paid directly to parents, instead of the IRD. Solo mothers on a benefit who have another child should not expect the taxpayer to increase entitlements, but should be free to pursue the father to pay his dues. We must also ensure that paternity is established for every single child that is born in New Zealand.

Delegates, politics is the contest of ideas. I want ACT¡¦s vision on welfare to provide New Zealanders with a distinct choice as they look to the future. With Labour going soft on welfare there is nothing surer than the fact that welfare numbers will grow. They are already forecasting a $1.5 billion rise in the cost of welfare over the next three years.

Long ago welfare expenditure eclipsed health, education and all other spending. If we empower people with the means and tools to move off welfare, reinvesting the savings in reducing taxes, we will generate the jobs and growth that will enable others to escape from the welfare trap. The result will be a rising standard of living, putting New Zealand on track to becoming 10th by 2010.

Common sense tells us there is no escalator out of poverty. It is impossible to design a system to transfer wealth that works in the long run, because it does not develop in people the skills, attitudes and values that allow them to generate their own wealth. People move out of poverty through hard work, thrift and enterprise, and by taking personal responsibility for improving their lot.

Each and every human has an in-built drive to improve life for themselves and their family. It is the energy of those tens of thousands of people all striving to achieve their goals and aspirations that strengthens families and communities, making a country really buzz. Ensuring that each and every New Zealander is able to become more productive and embark on a journey of success is vital if we are to become a leading nation.

Liberating families from the trap of welfare dependency, giving them the hope and the opportunity to lift their lives and the lives of their children, is the promise of ACT New Zealand.


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