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Newman-Online July 7th


Newman-Online July 7th

No Empty Promises On Welfare Reform

Muriel Newman-Online

This week, Newman-Online looks at how welfare has changed over the past three decades, and looks at how it is harming the country and destroying lives.

Let’s not beat around the bush here: New Zealand’s current welfare system is a shambles, and the only way forward – into a better and prosperous future for every single Kiwi family – is welfare reform.

Welfare reform is critical to our country’s future. For 130 years, from 1840 to 1970, welfare was not a problem. Our society at that time was built on the very principles that underpin the ACT Party: freedom, choice and, in particular, personal responsibility.

Only 34 years ago, in 1970, New Zealand had 28 full-time workers for each full-time welfare benefit. Today, however, that has dropped to only four full-time workers for each working age beneficiary. And it doesn’t stop there:

In 1973, 31 years ago, we had 12,000 sole parents – today we have 110,000;

in 1983, 21 years ago, we had 8,000 on a Sickness Benefit – today we have 43,000, more than five times as many; in 1983, 21 years ago, we had 18,000 Invalid beneficiaries – today we have 72,000, four times as many.

Since Labour became the Government, it has invested billions of taxpayers’ dollars in healthcare. Yet there has been a 30 percent explosion in the total number of adults deemed too sick to work and, so, are supported by the Invalids and Sickness Benefits.

Further, if you were to believe the Labour Government, you would think that unemployment is no longer a problem. Yet in 1973, just 31 years ago, there were fewer than 2,000 people unemployed. Today there are nearly around 100,000 on all forms of the unemployment benefit – that’s 50 times as many.

In just 30 years, our society has changed dramatically. We went from a long-term record of low dependency – under 40,000 – to a nation where 330,000 people are now being supported by welfare. That is an eight-fold increase.

Then there’s the other side of welfare – that of the family. Under the current system, one in six sole mothers on welfare – more than 18,000 – cannot, or will not, name the father of their child. That’s a 30 percent proliferation under Labour. Not only are these women denying their children the right to know their father, but they are protecting the fathers from having to front up to the personal and financial responsibility of raising a child.

Then there are the children themselves. At the moment, there are more than a quarter of a million children – one child in three – living in families where a benefit is the main source of income, and one in four children live in sole parent families.

The situation is worse for Maori. At present, nealry half of all Maori children throughout the country are being raised on welfare and, following current trends, within six years three out of four Maori children will be living in families without a father.

As a result of the disintegration of family that has continued under this Labour Government, almost 40 percent of all children placed in the care of the Department of Child, Youth and Family are Maori.

Labour came to power in 1999 – a time when the economy was growing strongly on the back of the economic reforms of the 1980s and early 1990s. Short-term unemployment – always driven by the economy – had fallen, and continues to fall. Long-term unemployment, however, is another story.

Dependent on effective Government policy, long-term unemployment has always been a problem at the hard end of welfare. Long-term unemployment is one of the most serious problems facing New Zealand society today, with tens of thousands of able-bodied people lingering on benefits – despite there being a critical shortage of skilled and unskilled workers.

And what is this Government doing about it? Nothing. Labour’s 2004 Budget, sold as an answer to New Zealand’s welfare crisis, is destined to fail – and Labour knows it. Official Budget projections show that, within the next four years, the numbers of beneficiaries in receipt of all four of the main benefit types are expected to rise by over 22,000.

New Zealand society seems to have now come to accept that welfare is simply a part of life – a right, rather than a temporary hand-up. Worse, we are becoming desensitised to the harm caused by long-term welfare, all too often treating it as an inevitable – if shameful – part of our culture. But why?

The answer lies in incentives. During the early 1970s, Norman Kirk’s Labour Government undermined the welfare system by changing the incentives. Welfare changed from being a hand up to work, into a dependency trap. That’s the reason for the explosion in welfare numbers.

In life – and public policy – you get what you pay for. If you have a welfare system that pays people to do nothing, then that’s what they will do – for years. If the system pays people to have and raise babies they do not really want, then you will get an epidemic of abused children. If welfare pays families to split apart, the result will be an escalation in family breakdown, with all of its disastrous consequences.

But if, on the other hand, personal responsibility is re-introduced as the underlying principle of welfare – and if the scheme is designed to be a hand-up to work – then welfare will again become a system that supports people into independence and a better future.

My goal is to be able to take a leading role in a government committed to welfare reform. I’ve been a solo mum, with young children, on welfare. I’ve faced the dependency trap. I’ve lived the day-to-day existence, and seen the wasted lives. I’ve lived in the seductive grip of that twilight world.

I’m now fortunate to be in a position where I can help those who are there to escape, and ensure that others are not lured there. I am driven by wanting to change the system so that all of those talented New Zealanders who have become enmeshed in the welfare trap can break out, get going, and achieve their potential. We need a welfare system that empowers and lifts people. That is the contribution that I will make to New Zealand.

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