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Shifting NZers off welfare and into work

Tue, 25 Jan 2005

Newman On-Line: Shifting NZers off welfare and into work

Shifting NZers off welfare and into work

This week, Newman On-line outlines a bold new five-step plan to shift New Zealanders from welfare dependency into work.

As we enter election year we are reminded that politics is a contest of ideas and that once every three years - with their party vote - New Zealanders have the opportunity to support the political party that best champions their views and addresses their concerns.

That’s why this week social welfare has become a hot political talking point. Welfare – or more correctly – welfare dependency is an area that causes unease in most voters. It profoundly affects not only the shape of our society but the direction and fortunes of its citizens. As the single largest single area of government expenditure, welfare also divides the country along ideological lines separating those wanting big government and more dependency from those who believe in limited government and less welfare.

There is no doubt that our welfare system is now in urgent need of review. Not only is it riddled with fraud and abuse – to the point where almost everyone knows someone on the take – but also more importantly, the evidence is now unequivocal that growing up on welfare damages children.

In spite of this, incentives have been created in the welfare system that mean women with children are better off on the Domestic Purposes Benefit than they are living with their partner. By undermining families, the DPB has been disastrous social experiment. Sadly it is children who have born the brunt of this political failure, with one child in four now being raised in a home supported by only one parent instead of two.

Unfortunately, facing the difficulties of raising a family on their own, welfare has enticed far too many sole parents to reduce their aspirations down to a weekly benefit cheque. It’s imperative for the well-being of these mums and their children that that the system is changed so they can lift their sights, get a job, and get their lives back on track.

It is also incomprehensible, that 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. The founders of the welfare state envisioned it to be a hand up to work, independence and a better future. It needs to be returned to that original purpose, transforming what has become a culture of entrenched welfare dependency into an opportunity society.

Based on successes both here and overseas, I suggest that the time has never been better than now to overhaul the welfare system using the following five principles:

· 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 DPB, the sickness benefit and the invalid benefit - would be replaced by a single ‘temporary’ benefit. There would, of course, be exemptions, especially for those with permanent disabilities who will never be able to support themselves. For that minority of citizens, welfare should provide on-going security and be generous enough to provide a decent quality of life.

Secondly, an annual benefit ‘re-application’ process should be introduced. This means that on an annual basis everyone will be required 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 should be introduced once beneficiaries are classified as being fit for work. This would take the form of a six-month “work search” period during which time they would be free to find a job in their own way.

Step four of the system is designed to help those people who, after six months, have been unsuccessful in finding a job. They clearly need professional support and will be provided with that through a pro-active programme of case management. The objective is to assist them to overcome their individual barriers to work. In some cases, it may be the advice of a financial planner that is needed so they can get their personal finances under control, or help with child-care, transport, relocation, or an interest-free loan to buy the clothes or tools needed for a job.

This pro-active case-management process will operate in conjunction with the fifth step of ‘work placement’. For those who have spent six months hunting for a job unsuccessfully, work placement will involve 40 hours per 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 engage them in the kinds of informal networks that often 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 provide 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 level of professional support that will enable them to become work-ready and get a job.

Further, this re-vamped system will eliminate intergenerational welfare dependency and its associated problems of social exclusion that for too long has been allowed to blight the future of generations of children.

Finally, this five-step process will dramatically reduce the fraud and abuse that has plagued the welfare system. As a result, welfare costs will decrease, 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.


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