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Welfare Reform - Vital for Nation to Stop Slide

Sunday 1 Dec 2002 Dr Muriel Newman Speeches -- Social Welfare

Welfare Reform:
Vital for Our Nation to Stop the Slide

Speech by ACT New Zealand Social Welfare and Employment Spokesman Dr Muriel Newman to the ACT Auckland North Regional Conference, Bruce Mason Centre, Takapuna, Auckland, on Sunday December 1, 2002

This is the last of our series of regional conferences and I have to say that it is exciting to see the party in such good heart. Our members and supporters are energised, our parliamentary team has hit the ground running and is by far the most effective opposition, our Leader is firing on all cylinders, our Party President continues to inspire us, and our Founder relentlessly challenges our thinking and ideas.

ACT New Zealand is an ambitious party, fired with the belief that a free society that encourages personal responsibility, hard work and enterprise will produce better outcomes for families, communities and the country than the heavy hand of the socialist state.

And I say socialist advisedly because this Labour government is a socialist government.

Having said that, it is important that we do not underestimate our opponent. We are dealing with a very clever government, both in terms of operation and spin.

They are driven by a ruthless, calculating Prime Minister who operates an elite command control centre.

Labour's strategy is to buy sufficient votes to hold power. Their target is around 1.2 million people - beneficiaries, super annuitants, Maori and Pacific Islanders, students, artists and other selected favourites - all being `bought' with taxpayer's money.

This year's election result has given Labour even more choices when it comes to gaining support for that agenda: if tensions within United Future between the fundamentalists and the conservatives mean that they can't play ball with a left-wing government, then the Greens possibly will. If the Green's radical socialist and extreme Maori sovereignty agenda means that they cannot support the government, then New Zealand First can always be courted.

While those of us who follow politics closely have an insight into what is really going on, it is important not to forget that the electorate sees things differently. There is a view that the Opposition can't get its act together anyway: the National Party faces major challenges, Winston continues to grandstand and although ACT is doing very well, we are a minor player.

The reality is that until the Centre Right sorts itself out, there is no alternative government and Labour will continue to rule.

So what are the choices that face ACT?

First and foremost we need to reach out more, to widen our appeal and broaden our support base. The Liberal Project is helping us to do just that.

Secondly, we need the National Party to find its feet - but when it does, we must hope that it is firmly in the centre ground and not too much on our turf. Their early positioning statements of personal responsibility, freedom of choice, one standard of citizenship, strong families and communities, strong national and personal security, and limited government indicate that they still have work to do in this regard.

ACT needs to differentiate itself, taking ownership of the issues that we care about, using them as a platform to attack Labour's programme. Because unless the Opposition is effective in exposing Labour's secret agenda and the damage it will do to New Zealand, we will continue on our inexorable slide to third world status.

Labour is a self confessed social democratic government. That means they use the democratic process to introduce socialism. Their goal is to turn New Zealand into a socialist state through the redistribution of wealth - taking money off someone who earned it to give to someone who didn't - regulating business, nationalising industries, and expanding the welfare system.

Their partner in their mission to indoctrinate people with the belief that `socialism is good for you' is the union movement. In return for legislating more power to the unions - for example using taxpayer's money to bribe public servants to join the union - the Labour party gets support from them. That means we are opposing a very well-resourced, clever and powerful political force.

So while ACT New Zealand will campaign for a zero tolerance for crime, an overhaul of the education system, lower taxes and a reduction in compliance costs, I would like to see us prioritise welfare reform as a major focus for the party so that we can fight Labour's plan to expand the welfare state.

Welfare reform is all about returning welfare to that envisaged by New Zealander's welfare state founder, Michael Joseph Savage. He created a welfare system that gave a helping hand to those in need, providing temporary support to the able-bodied. It was a system that worked well for more than thirty years - there were never more than 40,000 people on welfare with under 1,000 unemployed. In fact the Department of Labour knew the name of every unemployed person during those years.

When Labour swept into power in the early seventies, they changed the system making benefits more generous and introducing the Domestic Purposes Benefit. As a result welfare numbers have grown from 40,000 to 400,000 and New Zealand now leads the OECD in family breakdown. The human cost of welfare, given that some families have been on benefits for two and three generations, is massive: fatherlessness and damaged children with lost potential and limited opportunities.

The financial cost is also massive: more than one third of all government spending goes on people dependent on the state. Before Labour changed the system back in the seventies, for every one person on a benefit there were twenty-eight full-time workers. Today there are four full-time workers for every beneficiary, and with forecast growth of more than 5000 additional beneficiaries each year, the cost is unsustainable.

In order to achieve its goal of expanding the welfare state, Labour has made benefits easier to get on and harder to get off. Only weeks after new research from the Ministry of Social Development identified the Domestic Purposes Benefit as a major risk factor for children, Labour relaxed restrictions on the DPB.

It is now far more accessible: the 13 week stand down period has been removed so a person on a low-paying job can get more money by quitting work one day and going on the DPB the next. Someone on the DPB will now be able to go on a month's holiday overseas and still get paid, and by scrapping work testing, those on the DPB are no longer required to take a job until their youngest child is 18 years old.

This move effectively sends a message to women with children, if you split up your family, don't work, don't marry and don't let the father of your children see his kids for more than 40 percent of the time, then the state will effectively give you a secure income for life.

It is a message that resonates with Maori in particular: at the present time a half of Maori families with children have no dads, and more than 80 percent of those are on the DPB. If those trends continue, by the year 2010, three quarters of all Maori children will be growing up in families where there are no fathers.

In my mind it is outrageous that the Labour government is incentivising the DPB at a time when there is overwhelming evidence that children raised in a family where no-one works for a living fail to do as well in all areas of life than children in families with a parent who works. What is so despicable is that it is the most vulnerable people in our society who are being enticed into the welfare system. This government is seducing them into believing that the state will look after them, that the state does care. But we know that the state can never care, and what Labour is doing is morally wrong.

If we really care about this country of ours, ACT has a responsibility to create a mood for welfare reform in order to generate a momentum for change so that once a centre-right government is elected, welfare reform can become a national priority.

Welfare reform is at the heart of the future progress of New Zealand. With welfare reform, we could be prosperous again easing the financial stress that plagues so many working families. Welfare reform would give hundreds of thousands of children a decent chance to have a better life. Welfare reform would bring dignity and hope to hundreds of thousands of people currently locked out of any real stake in society.

Welfare reform would improve the nation's health and our educational achievements. It would reduce child abuse, teenage pregnancy and youth suicide. With welfare reform there would be less family breakdown and less crime. Welfare reform is the key to a better future.

ACT's programme for welfare reform is not rocket science, it is common sense: we would introduce time limits to create a sense of urgency and to ensure that child killers like Jules Mikus could not, as the sentencing Judge said, "sponge off taxpayers" for more than 20 years.

ACT believes that it is wrong to pay people to do nothing and waste their lives so we would require able-bodied beneficiaries to have the same 40-hour working week as the rest of adult society. In saying that, we would help with child-care, transport, relocation costs and so on, investing in people to give them a hand up to work, independence and a better future.

As the United States has shown, welfare reform can be a spectacular success, in transforming lives and a country.

In 1996 I was fortunate enough to visit the state of Wisconsin, a dairy state of 4 million people. Governor Tommy Thompson elected in 1986 on a platform of welfare reform wanted to reform the state from being a basket case economy to being prosperous. Today Wisconsin has one of the highest standards of living in the US, and their welfare reform programme has been passed into Federal law.

Essentially, using a programme similar to what ACT is proposing, they have reduced their equivalent of the DPB from 110,000 to 2,000. The people who still remain on a benefit have serious problems - drug and alcohol dependency, mental health problems, and the like - but the welfare department's goal is to provide sufficient support that they too can become independent of the state.

For the first time in recent US history, welfare rolls have halved, helping to drive their economic boom. New Zealand too deserves an economic boom to lift our standard of living back to first world status. Welfare reform could be the driving force to kick start our economic transformation.

ACT has worked hard on the issue of welfare reform. In fact, welfare reform is a part of our brand.

Most working New Zealanders feel strongly about welfare reform - while they want the security of knowing that welfare is there for people in need, they don't want it to become a way of life. Nor do they want it to damage children.

That's why, when you ask the right questions such as "do you think it's a good idea to pay fit and able young men and women to do nothing", over 90 % of people believe, like ACT, that paying people to waste their lives is not a good idea, and that there should be some reciprocal obligations. That means that a great many New Zealanders would be supportive of a party that took a lead in returning welfare to being the safety net that was originally intended and that used to work so well.

I believe that a welfare reform campaign is central to ACT's future development and growth. A campaign on welfare reform would set us apart and differentiate us from other parties. It would also provide us with a mandate for growing our support base.

If you would like to give your feedback - please email me on ( - on whether you would like to see ACT actively campaign for welfare reform, I would really appreciate it.

Finally, I would like to leave you with the words of Abraham Lincoln whose message reminds us all of the absolute necessity of opposing the socialist path Labour is taking us down by limiting the role of government and encouraging personal responsibility:

"You cannot keep out of trouble by spending more than you earn. You cannot bring about prosperity by discouraging thrift. You cannot strengthen the weak by weakening the strong. You cannot lift the wage earner by pulling down the wage payer. You cannot help the poor by destroying the rich. You cannot build character and courage by taking away a man's initiative and independence. You cannot help men permanently by doing for them what they could and should do for themselves".

For more information visit ACT online at or contact the ACT Parliamentary Office at

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