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Heather Roy's Diary Nov 26

ACT

Heather Roy's Diary

A Glimmer of Hope for Welfare Reform

I often wonder what Michael Joseph Savage would have to say about the welfare state if he was to stumble across it today. Labour's first Prime Minister, socialist to his core, union man and architect of the 'Welfare State', I find it hard to believe that he ever envisaged what the welfare state has become today. Would he have been content to have large numbers of working age New Zealanders on benefit income for long periods? I doubt it very much.

Savage was popular because he offered people hope. He himself said he wanted to "let people govern themselves". His 1938 Social Security Act introduced a free health system for all and put in place comprehensive welfare benefits.

Savage was of course from a very different time. Kiwis then had had the depression and two World Wars to contend with and Savage's intention was to help people to be able to help themselves.

His architecture has been added to by successive Labour and National governments. The product of the welfare state we see today is a mix of those who use a benefit for short-term assistance right through to those for whom welfare has become a way of life. The introduction of the DPB (Domestic Purposes Benefit) in 1973, ACC in 1974 and the 1977 National Superannuation added hugely to the cost of welfare so that now New Zealand has a welfare state that is unsustainable, both financially and socially.

ACT has long championed meaningful welfare reform and we were pleased to support the establishment of the Welfare Working Group (WWG), chaired by Paula Rebstock, in April this year. In August the group released an issues paper that expressed concern at the large numbers dependent on a benefit for long periods. As at June 2009 about 170,000 kiwis have been on a benefit for more than five out of the previous ten years. The WWG noted then that "The resulting unintended consequences have been intergenerational benefit receipt, high rates of poverty, poor child outcomes and poor physical and mental health".

There is nothing new in this. Welfare reform has been talked about at each election I have been involved in (since 1996) and debated by political groups and social agencies with various solutions postulated in an ad hoc way for all this time. It is pleasing to see the commitment of government to focussing on these issues by convening the WWG and even more encouraging this week to seeing the launch of the WWG Discussion Document - Reducing Long-Term Benefit Dependency, The Options.

The 125 page document is a comprehensive picture of the current state of welfare and proposes a raft of options that could be put in place to deliver improved outcomes for beneficiaries, their families and communities and the taxpayer. Chair of the WWG Paula Rebstock says "Fundamentally, we are asking New Zealanders to consider whether it is time for major change in the way we think about and deliver welfare".

Options range from the status quo through to what will be perceived by some as radical tough-love type proposals. There will inevitably be criticism by some that there is too much on the table, but having now been in the position of putting discussion documents together it is much better to have all options discussed in a healthy debate.

Some of the options that ACT has promoted and that I'm personally keen to see progressed are the expectation that most beneficiaries will be required to actively seek work, time limits for benefits, intensive case management for those most at risk of long-term benefit dependence and scrapping the complex system of grants and supplements and establishing one benefit payment.

Also put forward as options are a number of "carrots" or incentives such as moving people with part-time work from the benefit system to the tax system by having an in-work tax credit, increasing the financial incentives for people working part-time to work more hours by having a higher deduction rate when they earn less or increase the deduction rate for people with no work expectation.

Although "carrots" can be costly the emphasis is in an investment approach with up-front spending ultimately saving billions in future welfare bills.

I was particularly pleased to see proposals of cross-agency collaboration. For too long government departments have operated as silos because it is convenient for them to do so. Jealously guarding their 'pots of gold' rather than putting people as the central focus will never solve the social issues we face as a nation.

Welfare, education and health - alongside other agencies such as ACC and Disability - are inextricably linked and it is frequently the same individuals and families that are known to each. Case management plans involving discussions with all relevant organisations are the way forward. The impetus for this though rests I believe with the political will of Ministers to co-operate and lead by example.

The WWG is calling for public submissions by 24 December and will report their recommendations to government by the end of February 2011. Let's hope that they will be courageous in tackling the very real issues of welfare dependence head on. Welfare was always meant to be a hand-up, not a hand-out. Michael Joseph Savage was right in wanting to "let people govern themselves" and to give kiwis hope. Some things never change.

If you are interested in the options put forward by the WWG the Options Paper can be found here.

Lest We Forget - Mining Tragedies
It has been a week-long tragedy for New Zealand as we have mourned the loss of 29 men at the Pike River Mine. We take for granted the dangers that miners put themselves in every day, and today it is timely to remember all of the New Zealanders who have lost their lives since our first mines opened in 1842.

On 21 February, 1879 34 miners were killed in an explosion caused by a lit candle in a Kaitangata, Otago mine accident.

The Brunner mine accident occurred on 26 March, 1896. An explosion killed 65 coal miners in New Zealand's worst mining disaster.

12 September, 1914: Huntly mine accident where 43 coal miners were killed in an explosion at Ralph's Mine, Waikato.

There was a second major Huntly mine accident on 24 September, 1939 when 11 men were asphyxiated by carbon monoxide at the Glen Afton coal mine.
The Strongman mine accident on 19 January, 1967 was caused by an explosion killing 19 miners near Greymouth.

And now the Pike River mine tragedy will enter our history books. Two explosions on 19 and 24 November 2010 result in the deaths of 29 coalminers at the Pike River mine on the West Coast. It is this country's worst mining disaster since 1914.

ENDS

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