Welfare Flaws For All The World To See

Speech to ACT Scenic South Regional Conference; Rydges Lakeland Hotel; 38 Lake Esplanade, Queenstown; Saturday October 30, 2004.

Earlier this week, the OECD published a report which found that too many New Zealand sole parents are on a benefit.

By international comparisons, having half of all sole parents on the Domestic Purposes Benefit is far too high. The report's authors are, no doubt, mindful of the fact that long-term benefit dependency and sole parenthood have been found to be significant risk factors for children.

Labour's responded to the report by claiming that its changes to the DPB were working and that, as a consequence, more sole parents were moving into work. That claim is the sort of public relations spin that we have come to expect from this soft-on-welfare Government.

The Kirk Labour Government first introduced the DPB in 1973, at which time some 14,000 women were deemed eligible. That number, however, grew relentlessly over the years, peaking at 115,000 in 1998 - with forecasts showing 124,000 by 2002.

The changes which halted and reversed this growth were based on Work-Testing: an expectation that, once her child reached school age, a sole mother should find part-time work - moving into full-time employment once the child turned 14.

As a result, DPB numbers began to fall for the first time; dropping to 110,000 by the time Labour took office.

Rather than endorsing and promoting the downward trend, however, the new Government changed the law to make the DPB easier: removing Work-Testing, scrapping the stand-down period - which had discouraged people from quitting their job to go onto a benefit - introducing a provision to allow sole parents to go overseas for up to a month and still be paid, and extending benefit eligibility until the recipient's youngest child turned 18.

As a result of these changes, DPB numbers are now static and, despite the country being gripped by a chronic worker shortage, there are still almost 110,000 able-bodied working-aged sole parents on a benefit - including 54,000 women whose children are of school age. These women, in particular, could work if they were given the right support. Labour, however, condemns them to a life of benefit dependency - which, I can confirm from experience, is not much of a life at all.

The Labour Government - with its `sound good, feel good, but do nothing' policies - is denying these women and their children the sort of decent life and independence from the State that should rightly be theirs.

In particular, Labour is turning its back on the children, at a time when all research shows that children raised by a sole parent on a benefit encounter far more risk factors and greater disadvantage than those raised in a working family.

So if this Government's sole parent benefit policy is so wrong, what should we be doing instead?

As a first step, I believe, we should be taking heart in what has been achieved in this area overseas.

In the US state of Wisconsin, Governor Tommy Thompson - now President George Bush's Secretary of Health and Human Services - reduced sole parent numbers from 110,000 to 2,000. In some counties of this four million-strong state, there are no sole parents on benefits - they all work. Not only that, but crime is down, illiteracy has fallen and there is less family breakdown.

The way they achieved this is based on commonsense. First, they invested in their sole parents - helping them overcome the barriers to work through childcare support, transport relocation assistance, mentoring, financial planning advice and so on.

Secondly, once their private lives were properly organised and their children cared for, sole parents were required to engage in the same 40-hour work week as other families. Each tailor-made 40-hour work experience programme was designed to help the sole parent gain the habits, skills and disciplines of the workforce.

This programme was such an outstanding success in Wisconsin that the principles were adopted elsewhere and now form the basis of the US federal welfare programme.

I firmly believe that these principles would also work here, and that they would not only help the 54,000 sole parents with school-age children to find work, but could also assist the 84,000 able-bodied beneficiaries who are currently on the dole.

If an effective welfare-to-work programme was implemented, targeted at that pool of more than 130,000 able-bodied beneficiaries, then the advantages would be enormous: the country would have tens of thousands more New Zealanders re-entering the workforce and helping to build a better country, and former beneficiaries be able to build for themselves and their families a better life and a better future. In short, they would be able to take control of their destinies, and those of their children.

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