'The Nation' Stephen Parker With Professor Maloney

'The Nation'

Professor Tim Maloney
Interviewed By Stephen Parker

STEPHEN This week the government's Welfare Working Group met in Wellington to hear ideas from a host of local and international experts. The Welfare Working Group has been asked to find a fresh approach to tackling welfare dependency. It's a problem that often involves entire families, and parents who've passed down to their children a life of state assistance, something my next guest has been looking at. Welcome to the programme Professor Tim Maloney, Chair of Economics at the Auckland University of Technology. Good morning Tim.

Well you’ve been sitting in on this initial broad meeting of the Welfare Working Group, what was your first impression, it seems very much that it's a blank sheet in terms of redesigning welfare.

PROF. TIM MALONEY – AUT Chair of Economics
I think it is, I think the terms of reference for the Working Group are quite broad, and I think it's going to be a very ambitious task to refine everything down to something that they can present to the government by the end of the year.

STEPHEN And when you look at what the current welfare system is, is anyone saying we've got a good system and we should keep it?

TIM No I think that’s actually one of the first impressions I had of the conference is a very diverse group first of all, there's academics who work in this area like myself, but it's also there were people from the government there, different ministries, and a lot of advocates for welfare rights. So it was a very broad group, but I think what I got first and foremost was a sense that across the board everybody felt change was necessary.

STEPHEN One of the figures put up is 177,000 people have been on some form of benefit for more than seven years. Would you identify that as one of the problem areas that needs to be tackled?

TIM Yeah I think long term welfare dependence is really the focal point of a lot of work in this area. Not just for New Zealand but for other countries as well.

STEPHEN Right, so you’ve done quite a bit of work on intergenerational welfare. So simply put, are we in a situation where if you're a child growing up in a beneficiary family you are more likely to seek out a benefit in your lifestyle?

TIM Well surprisingly there's not a lot of hard evidence on this intergenerational welfare dependence issue. That’s not just for New Zealand but across the world, but I think the casual evidence that we have and certainly the study that I put together, definitely indicates that there is a fairly high level of welfare dependence between parents and their children.

STEPHEN Why?

TIM That’s the big question. No one really knows what the pathways are like, and obviously that important to be able to form policies designed to break that welfare dependence.

STEPHEN Okay, well I mean it's early days, the Welfare Working Group's got a lot of work to do. What are your initial thoughts on how to tackle this issue?

TIM Yeah well like you say it is very difficult and until we really understand the pathways it's hard to design specific policies that would break that welfare dependence. From my point of view one of the keys in the end has got to be upskilling, education, and if we want to provide opportunities for people the best thing to do is increase their productivity in the workplace and increase job prospects, wage rates, career paths and so forth.

STEPHEN What's your reading of the mood of the Welfare Working Group, do you think there's a sense that they’ll be looking at reducing for example time on a benefit, a time or age restriction on DPB for example?

TIM Well these term limits on welfare recipiency have been used in other countries, the US in particular, that I'm most familiar with, but I don’t think we're probably likely to go down that road. I think what's probably more likely is that we'll adopt the Australian approach which is to switch solo parents on to the unemployment benefit or something similar to that, when the youngest child in the household reaches the age of six or seven, and that’s certainly in parliament right now.

STEPHEN One issue may be that – tell me what you think – that our welfare system seems very complicated. Do you agree?

TIM I think that’s absolutely true, and we actually had somebody from the OECD who had a video link with us from Paris, and she remarked that it's interesting that New Zealand has sort of world renowned superannuation and tax system, largely because of its simplicity and transparency, and yet our social welfare system is very complex, and very difficult to get your head around.

STEPHEN What do you think just finally about the politics of it. It's always a politically charged area, welfare reform, is there a danger this Welfare Working Group will come up with a range of ideas, maybe some quite innovative, but because of the politics you know they might not be picked up because politicians will find them unpalatable?

TIM That’s really possible and really depends in the end what the Working Group can come up with, but I would guess, not knowing exactly what the mindset of the Minister and the government would be, that they’ll sort of pick and choose from the many that they're given.

STEPHEN There'll be a lot to look at that in the future. Thank you Tim Maloney.

ENDS