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Social Welfare “Safety Net” Unravelling

Caritas Aotearoa New Zealand

17 SEPTEMBER 2008

Social Welfare “Safety Net” Unravelling says Caritas

A new report finds that both National and Labour administrations over the past two decades have been steadily unravelling our social welfare “safety net” and moving its basis from the meeting of basic need to the narrow focus of pushing people into work.

The report The Unravelling of the Welfare Safety Net backgrounds changes to New Zealand’s social welfare benefit system since the benefit cuts of 1991. It was prepared by the Beneficiary Advocacy Federation of New Zealand, for Catholic social justice agency Caritas, to provide historical background on proposals for a “single core benefit”.

The 1972 Royal Commission of Inquiry into Social Security used the term “safety net” to describe the then vision of social welfare which ensured the most basic level of financial support to allow all to participate in society.

“National leader John Key and Labour Minister of Social Development Ruth Dyson still confidently refer to a basic ‘safety net’ of social welfare assistance, but this report shows that both main parties have been pulling at the threads holding it together,” says Caritas Research and Advocacy Officer Lisa Beech.

“Since the 1991 benefit cuts, there has been a continual dismantling of key aspects, particularly the loss of discretion in granting supplementary assistance. This removes the ability to respond to particular individual needs as they arise,” says Ms Beech.

Ironically, the present Labour government has introduced some of the changes, despite opposing similar moves by National in the 1990s. For example, Labour successfully opposed removal of discretionary aspects of supplementary benefits in 1994-95, yet under urgency in the 2004 Budget legislation, it abolished the discretionary “last resort”special benefit, in favour of the temporary additional support – for which eligibility is tightly defined in regulations, and in which there is no discretion.

“The complexity of our benefit system comes from the increased expectation that people must apply for a range of supplementary assistance just to meet everyday costs,” says Ms Beech. “It’s a direct result of the move from ‘targeted welfare’ to ‘tight targeting’ which began with the 1991 benefit cuts, but has continued under successive governments since.”

“This week the Catholic Church is considering poverty in our affluent society for its Social Justice Week. In recent times of low unemployment and good economic times, perhaps many of us have become complacent about the very poor among us, and about our benefit system – thinking help will always be there if we need it. This report shows that’s no longer the case.”

“We know the difficulties beneficiaries have getting supplementary assistance. Catholic organisations bear witness to this ­ beneficiaries are frequently unable to gain their proper entitlements without an advocate at their side.”

“Our concern for a fair and effective benefit system stems from Catholic principles holding that the needs of the poorest members of our society must be given priority, and also our understanding that human beings are not isolated individuals. We’re connected to each other. The goods of the earth are intended for all, and sharing through the taxation and benefit system is one outworking of this perspective.”

Although Labour now intends to implement the “core benefit” proposals in 2009/10, and National says it does not support the core benefit proposal at all, there are significant similarities in the approach by both major parties to “simplifying” social welfare.

“With the country facing an election, and­ it seems ­ tougher economic times, we want more commitment to supporting people in their time of financial need,” says Ms Beech. “At the moment, the differences between Labour’s work-focused incentives and National’s proclaimed ‘unrelenting focus on work’ are mainly differences of degree. Labour might prefer the ‘carrot’ of incentives to what it says is National’s ‘stick’ of benefit sanctions. But if National has a stick with which to beat beneficiaries, it’s because the present government provided it ­ all the mechanisms for sanctions were put in place last year by the Social Security Amendment Act.”

ENDS

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