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Cash boost for benefits

A $20 a week cash boost for beneficiaries and reduced abatement rates to help beneficiaries into work feature in the Alliance social security policy released today.

Under the policy the government's 'work for the dole' scheme will be replaced by investment in real jobs, and a Government Social Responsibility Act will make the government assess the social impact of its policies.

Alliance MP Grant Gillon went to a soup kitchen set up at the Wellington People's Resource Centre to release the policy today.

'The Alliance is going to review the culture of corporate extravagance at WINZ. Instead of spending money on corporate blow-outs for WINZ executives, we'll direct resources to where they are needed: Job creation and immediate relief for some of the most vulnerable citizens in our community.

'If New Zealand wants to get rid of foodbanks, benefits have to be raised and it has to be made easier for people who can work to earn an income before their pay is affected by benefit abatement,' Grant Gillon said.

The Alliance will increase all benefits by $20 a week each.

'Tax cuts didn't deliver for people who need an income the most. $20 a week is a significant sum for someone on a very low income, which take some of the pressure off family budgets for those who need it most.

'The challenge to the National Party is to explain why it thinks $20 a week is needed by the highest paid state beneficiaries like Cabinet Ministers, but not by the very lowest paid. If someone is on a sickness benefit or invalids benefit, they can't work and there is little they can do to increase their own income.

'The Alliance is spending $20 million, rising to $40 million in the third year, to gradually reduce the rate at which benefits are abated as an encouragement to beneficiaries to move into paid work.

On 1 February this year the abatement rate for widows and women on the DPB was increased from 30 cents in the dollar to 70 cents, creating an effective marginal tax rate of 92 cents in the dollar.

'Under National and Act, if a woman on the DPB who has a part-time job earning $80 is able to increase her earnings to $180, she gets to keep only $8 of the extra $100 earned. If she has a student loan, her benefit can be abated at the rate of $1.30 for every extra $1 earned.

'There is not much incentive to work all day for $100 if you get to keep only $8.

'According to the Government's own figures, nearly 5000 single-parent families lost an average of $26 a week because of the way benefits were abated.

'Back in 1996 abatement levels were reduced and the number of women receiving income from other sources increased by 19%. About 22% of women on the DPB now have other incomes, whereas 17-18% had other incomes in 1994. That says reduced abatement rates work,' Grant Gillon said.

New Zealand now has more beneficiaries than ever before. In the last year the number of people on benefits increased by 4% to 389,000 people, over 10% of the population. There has been a 164% increase in the number of beneficiaries since 1984, compared to a population increase of only 17%.

Unemployment is the major contributor. In the last year the number of people on the unemployment benefit increased by 10% to 154,000, a further 60,000 people would like a job but are not on the benefit.'

The Alliance says that the government should be investing in job-rich, high-skill new industries instead of trying to paper over the lack of jobs with its 'work-for-the-dole' scheme.

The Alliance will create a $200 million economic development fund to invest in new industries. We'll create 80,000 more new, real jobs and abolish the 'work-for-the-dole' scheme which destroys one real job for every four short-term positions it creates.

'The Alliance will introduce a Government Social Responsibility Act, which will require the government to specify and monitor its performance against social objectives and to prepare social impact reports for any proposed legislation likely to have significant social effects.

'In a 1994 report on New Zealand the United Nations Committee on Economic, Social and Cultural Rights explicitly criticised the lack of social monitoring by the government.

'The absence of transparent information about what the government is trying to achieve and about the social impact of its policies makes it difficult to hold the government to account for its policies.'The Fiscal responsibility Act specifies the principles for responsible fiscal management. Similar obligations should exist in law in relation to social policy.'

Visit http://www.alliance.org.nz for more information about the Alliance


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