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Concentrate on job creation, not 'fixing' welfare

2 November 2011

Concentrate on job creation, not 'fixing' welfare - The Mission

The welfare system isn't broken and it is working as intended. Government focus should instead be on the other half of the equation: job creation, says Methodist Mission chief executive Laura Black.

People on benefits deserve and need our support - they are bearing the brunt of the international and domestic economic crisis that has been unfolding since 2008.

The Mission therefore welcomes the Government's promise of a long-term investment approach to getting people into work. As far as it goes.

New policies - wrong focus

Unfortunately, a lot of the recently released policy appears to be window dressing and focussed on the wrong thing. Sickness beneficiaries already have to regularly justify their work readiness. Job seekers already face high expectations for finding and securing work. Most solo parents only access DPB assistance for 6 months or so: there is little evidence of solo parents hanging around on a benefit.

What is new; the reorganisation of the welfare system with its re-categorisation of benefits and eligibilities; will cause great stress to those now, legitimately, receiving assistance. The greatest number of those on sickness benefits are suffering from anxiety and depression - two well-known consequences of long-term poverty - the risk of this 'new' approach is that it will simply worsen the symptoms experienced by many of those supposedly being targeted for 'extra help'.

As for those who are on the DPB and have another child - this is a vanishingly small proportion of those on benefits.

Job creation

More than 65,000 people have been added to the numbers of beneficiaries since the last election.

We know this increase relates not to 'dependency', or laziness, or 'bludging': Although some new jobs have been created in that time, nearly 40,000 school leavers are added to the ranks of job seekers each year. The numbers of jobs being advertised is up, but it seems that this due to those in work seeking pay increases by swapping jobs. It is not because there are vacancies going begging.

Simply put: job creation in New Zealand has not kept pace with the annual increase in the workforce, and it has not recaptured those jobs lost to the 2008 Global Financial Crisis.

Job creation comes from business growth. New Zealand needs high-wage business growth in order to reduce the numbers of those on benefits.

Economic growth precarious

While the Prime Minister assures the country that the Government has a plan for stimulating the economy, so far the details remain unannounced.

Commentators and Treasury are suggesting that the Budget Day forecasts for economic growth are now precarious, and newspapers report that business is uncertain as to the Government's plans for investment in growth.

According to Statistics New Zealand, nearly half of all New Zealanders are struggling financially, we are known as a low-wage economy, and our brightest and best young people are migrating overseas just as fast as the planes can fly.

The Mission's response to the Government's announcement of Welfare Reform, then, is this: where are the Government's plans for business growth?

ENDS

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