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Newman Floats Fresh Ideas For Welfare Reform

Newman floats fresh ideas for welfare reform

Monday 17 Jan 2005
Dr Muriel Newman
Speeches -- Social Welfare

Speech to ACT Whangarei Electorate Committee; Monday, 17 January 2005.

As we look ahead to the election, we are reminded that politics is a contest of ideas. Once every three years - with their party vote - New Zealanders have the chance to support the political party that best champions their views and addresses their concerns.

Social welfare is an area that causes unease in most voters. It profoundly effects the future direction of a country and the individual fortunes of its citizens. As the single largest area of government expenditure, welfare also divides parties along ideological lines between those aspiring to big government and an expansive welfare state, to those advocating limited government and an effective system of welfare.

I would like to take this opportunity as ACT's Welfare spokesman of sharing with you my recommendations for our 2005 election year welfare policy.

There is no doubt in my mind that our welfare system is in urgent need of review. When you have a system that is riddled with fraud and abuse, that damages children on a daily basis, and which limits the potential of far too many able-bodied New Zealanders, then you have a system that simply must be changed.

For too long as a society we have condoned the present system in spite of the fact that it breaks up families, that it prevents parents from being working role models for their children, and that it pays people who could and should be earning their living to do nothing for 10, 20, even 30 years. Amazingly, in spite of the present critical labour market shortages, there are still more than 350,000 adults and 250,000 children dependent on taxpayer-funded benefits. Welfare is clearly a system that has gone off the rails.

With the present abundance of jobs, there has never been a better time than now to completely overhaul the welfare system. We need to urgently return it to the original purpose envisioned by its creators of being a hand-up to work, independence and a better future. Our aim is to change what has become a culture of entrenched welfare dependency to an opportunity society.

Based on successes both here and overseas, I will be recommending that ACT adopt the following five principles as the basis of our election year welfare policy:

· Introduction of a single benefit

· Annual benefit re-application process

· Time limited work-search period

· Pro-active case management

· Full-time work-placement programme

Firstly, to simplify the benefit system and send a clear message to the able-bodied that welfare is only available for temporary assistance in times of need, all benefits - including the dole, the domestic purposes benefit, the sickness benefit and the invalid benefit - will be replaced by a single `temporary' benefit. There will, of course, be exemptions, including those with permanent disabilities who will never be able to support themselves. For that minority of citizens, welfare must provide on-going security and should be generous enough to provide a decent quality of life.

Secondly, an annual benefit `re-application' process will be introduced. This means that on an annual basis everyone will be asked to re-apply for their benefit in order to reduce the widespread fraud and abuse that presently blights the system and to ensure that everyone is receiving the appropriate level of assistance.

Thirdly, a `time limit' on welfare will be introduced once beneficiaries are classified as being fit for work. This will take the form of a six-month "work search" period during which time they will be free to find a job in their own way.

Step four of the system is designed to help those people who have been unsuccessful in finding a job during their six months free `work-search' period. They will be provided with professional support through a pro-active programme of case management. This will help them to overcome their individual barriers to work so that they will be successful in getting and keeping a job.

In some cases, the support of a financial planner will be needed so they can get their personal finances sorted out and under control. In other situations assistance may focus on child-care help, transport, relocation, or even the provision of interest free loans so they can buy the clothes or tools they need for a job.

Finally, this pro-active case-management process will operate in conjunction with the fifth step of `work placement'. For those who have spent an unsuccessful six months hunting for a job, work placement will involve forty hours a week of work, training, or job search. This full-time programme will be designed to help them gain the habits and skills of the workplace as well as to enable them to engage in the informal networks that, more often than not, lead to a job.

The key to the success of this five-step process is getting the incentives right: sending a strong signal that welfare in New Zealand is there to provided work for those who can and security for those who can't. The system is designed to help people to help themselves into a job and independence from the State. The key requirement of the welfare department is to ensure that beneficiaries receive the appropriate professional support that will enable them to become work-ready and get a job.

Further, this re-vamped welfare system will ensure that once again, the majority of New Zealand children can look forward to a future where they are no longer trapped in families plagued by intergenerational welfare dependency and its associated problems of social exclusion, but are brought up by parents who value work.

Finally, this five-step process will eliminate much of the fraud and abuse that has for too long plagued the welfare system. It will enable the cost of welfare to be significantly reduced, providing an ideal opportunity to lower the tax burden on working New Zealanders. This in turn will boost the economy and improve the standard of living for all families. It is the key to taking the country onto the path to prosperity that should rightfully be our destiny.


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

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