21 October 2011

September benefit numbers show Welfare reform is a huge tragedy so far

John Key and other Ministers have promised that work is the way out of poverty.

All that had to happen was a few sticks and carrots to provide the incentives.

The carrot was the In Work Tax Credit (IWTC) designed especially to get sole parents into work and the stick was the reduction in access to benefits and hardship payments.

“Both policies are resounding failures” says CPAG’s Economics spokesperson, Susan St John.

‘The poorest sole parent families and their children have not found that pot of gold in sustainable work in spite of the government spending over 0.5 Billion per annum on a poorly designed, perverse work incentive .”

The number on the DPB took a momentary dip when the IWTC was introduced in 2006. But it clearly did not keep these sole parents in work—the numbers for Sept 2011 are now worse than in 2005.

Furthermore, the single unemployed were not offered the carrot and yet their employment has not dropped as quickly. The stick has been a cruel and clueless policy that has pushed some single people off benefits.

Both the failed policies have seen an explosion in the demand for food banks. Agencies such as the Auckland City Mission report they have never been busier and predict it can only get worse. Many of their clients are in serious poverty with no way of escaping. Food parcels from charities are not a replacement for decent levels of benefits and tax credits for children.

Child Poverty Action Group says “at very least Working for Families should be redesigned to help the poorest children that have been so neglected and penalised for the lack of work their parents face”

ENDS

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