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The Standard

Undo the cuts

Written By: - Date published: 3:05 pm, May 11th, 2008 - 56 comments
Categories: history, labour, national - Tags: , ,

Good to see Ruth Dyson finally admitting we have left beneficiaries behind. I would hope now that there would be a lot more done than simply indexing benefits to wages though. Increasing the benefit to real pre-1991 levels would be a good start.

A lot of people know about the benefit cuts but not many know about the rationale behind them. At the time the plan was to increase the “gap” between welfare and work in order to make people compete harder for jobs. Effectively it forced people to take lower and lower wages for any job they managed to secure.

The figures treasury and the National party used for the benefit cuts were based on what they called the “New Zealand income adequacy standard”. In theory this was a poverty line. In effect it was well below that. Figures for the cuts were based on research from Otago University’s department of human nutrition which determined the lowest level of income people could survive on while maintaining basic needs such as balanced dietary intake. Unfortunately this lowest level was based on things such as bulk purchasing, slow-cooking cheap cuts of meat, making food from scratch and a whole lot of other saving methods that presumed time and skill. The Dunedin researchers discovered that in practice nobody was able to feed themselves properly on their minimum food budget but that didn’t stop the National Government adopting it and cutting it a further 20%.

The results were predictable. Coupled with other National party policies such as market rents for state housing tens of thousands of New Zealanders fell into extreme poverty, food-banks sprang up and third-world diseases such as TB, glue-ear and meningitis ran rife. In 1996, 473 New Zealanders ended up in hospital with rheumatic fever – a poverty-related disease that was virtually unknown in most western countries since the 1960s – and one in four of them died from it. The next year the National Government launched a publicity campaign that misrepresented benefit fraud levels and attacked beneficiaries as bludgers. Prior to the 1990’s people who could not get a job were thought of as vulnerable people we should all look after. No longer.

Some of the worst effects of the cuts have been ameliorated by income-related rents, PHOs and the fact that we have had a period of strong economic growth and at the moment there are few people on a long-term benefit and there are plenty of jobs. But if the economy slows we’ll find out how little we’ve moved on from the 90’s. Until we increase the benefits to a meaningful level and start thinking about social welfare as, well, integral to the welfare of our society then we will not see wages for low-skill jobs increase without minimum-wage intervention and tens, if not hundreds, of thousands of New Zealanders will continue to risk the same poverty we saw in the 1990’s if we have a downturn.

As an aside, I note that Judith Collins claims better budgeting advice is all that is needed. It reminds me of how in the late 90’s Jenny Shipley claimed beneficiaries just needed to grow their own vegetables and everything would be fine. I hope Labour does something to fix this. After reading Collins’ delusional comment I know National won’t.

56 comments on “Undo the cuts”

  1. Ha! Grow veges – I remember that scumbag Shipley saying that. At the time I was barely surviving on a benefit and already was growing my own veges!

    Captcha: “thwarting society” – it knows Shippers and Collins well…

  2. Tane 2

    Good post Bill. The only question is whether Labour has the courage to do this in election year. Beneficiary-bashing is easy sport and Labour will need to show some leadership to get it through, something I’m not too hopeful of given their backdown on the ETS.

  3. Lyn 3

    Thanks Irishbill for such a well-researched and thoughtful piece. I still remember the helplessness I felt as a graduate on a benefit during the Shipley era, and the utter impossibility of getting a job in the town where I was living. I also remember my rage on discovering that benefit levels had been determined by subverting academic research in the interests of keeping up to 6% of the population below the breadline. I shudder to think what it will be like for beneficiaries when we next experience an economy with higher unemployment levels – benefit levels are something we need to address now.

  4. higherstandard 4

    Indeed good on Ruth Dyson for telling it like it is especially in election year I would have expected evasion on the topic.

    However I think your “blame it on National approach” is not really useful and is somewhat duplicitous after the present government has been in situ for three terms.

    The dataset around glue ear, meningitis, rheumatic fever and Tb is also misleading suffice to say that although poverty is certainly a factor in these conditions there are other causative effects for outbreaks – while I don’t have the figures at my finger tips I would be surprised for instance that the number of grommets we’ve put in children has dropped over the last couple of decades and also whether the TB and rheumatic fever incidence has changed from it’s steady decline of the last 20 years.

  5. A good example of the lie that is “turkeys don’t vote for an early xmas”. You can expect all the receivers of our tax largesse to vote for Harry and her team again this year. it is the only voting bloc labour can rely on.
    The labour way is to make people even more dependent on social charity.
    How about some suggestions for reducing the benefit roll eh lads.

  6. AncientGeek 6

    bb: You appear to have avoided looking at the drops in the “benefit roll” over the last decade.

    They didn’t happen under the national politicians because frankly they appeared to be adverse to doing any hard work during their last watch. Changes in the level of the benefits happened despite their hunt for idiotic quick-fixes rather than because of them.

    What we got out of the mother-of-all-budgets was an artificial recession for 5 years triggered by a massive drop in consumption, causing a reduction in local production. It was a massive economic shock which had only negative effects downstream. It also nearly induced a social change to having a permanent underclass from which there was little or no hope of children getting out of.

    What I’m hearing from the tories at present doesn’t inspire me to any level of confidence that they won’t do something as bonehead stupid again. In fact the me-too rhetoric sounds pretty much like what we heard before the 1990 election.

    You have to wonder if to be a tory, you have to carry a recessive congenital stupidity gene.

  7. IrishBill 7

    HS, I blame National for the cuts and I blame Labour for not reversing them. I also blame National for the systematic stigmatisation of beneficiaries and I blame Labour for being to scared by that mendacious piece of PR to do anything pro-beneficiary.

    I also don’t have the data sets for TB, rhumatic fever, etc but from what I can recall they increased in the late 90’s and the generally acknowledged cause for this was poverty and its symptoms including limited access to health care, overcrowding and malnourished and poorly clothed kids.

    BB, the benefit roll has been dramatically decreased. Even after the increase in unemployment the other day we still have one of the lowest unemployment rates in the world. How about acknowledging that a market economy means unemployment and how about making sure that if we choose a market economy we should also recognise that we owe those at the bottom enough to live on?

  8. IB, Every body has the right to a clean dry bed and food in their belly.
    while we can argue over statistics till the day after the end of time I have no sympathy or pity for people who have managed to stay on the unemployment benefit over the last few years of global prosperity.
    Right now today there are hundreds of vacancies in the bay of Islands, But hundreds on the dole in kaikohe, Kawakawa, Motown and other areas of Northland. (I live upo here so am using this region as an example I can speak with some knowledge on).
    I would never suggest impinging on the dignity of those unable to work. However the able bodied but morally crippled members of the dole roll need a rocket up them.
    Your labour govt has increased the minimum wage many times, an action I agree with wholeheartedly, as an honest hours work deserves an honest hours pay. But people on the dole for longer than a month are taking the piss.
    Cue the usual suspects offering examples of their aunties brothers cousins dog who has been on the rock and roll for nineteen years but the ancient art of whitebait filleting that they trained in is no longer available to them.
    Come on guys, call it like it is, people on the dole longer than a month or two are stealing from all of us.

  9. IrishBill 9

    Bill, the cuts were not only to the dole but to the DPB and other benefits and they have denied people a clean dry bed and food in their belly. Full employment does not fit with the monetarist model and there are very few people (if any) who are on the dole by choice. It’s 185 bucks a week. That’s less than I spend on a good night out (and I suspect less that you’d spend likewise) and it’s not an amount anyone lives on by choice.

  10. r0b 10

    I think it is disappointing that Labour has been so influenced by the National-style framing of beneficiaries as lazy bludgers. Yes, Labour have been very good at getting people off benefits and in to work. Yes Labour have raised the minimum wage substantially. But those who must remain on a benefit (for some genuine reason) deserve a better deal. The cuts of ’91 should have been reversed long ago.

    Interesting piece here on comparing Labour and National before the 05 election: http://www.greens.org.nz/searchdocs/other8273.html

  11. ak 11

    Bill said: “I have no sympathy or pity for people who have managed to stay on the unemployment benefit over the last few years….”

    Fair enough, I can understand your attitude. May I gently suggest though, that it may change if you actually met some of these people.

    Having dealt and worked with literally hundreds of beneficiaries over many years, I can assure you Bill (and HS) that there are very few in the “wilful bludger” category. Nip over to the DWI site (“Manuals and Procedures” and you will see that there are manifest powers (sanctions) available to DWI staff (including cutting benefits) that are regularly employed, believe me. Anyone who still thinks it is easy to get on UB and remain there is deluded. (And remember that all Invalid and Sickness beneficiaries must be assessed by a medical professional to qualify).

    For those very few remaining long-term UB clients there are always other factors involved: the biggest of course being that someone has to choose to employ them.
    Have a close look at those “hundreds of jobs” Bill: would you employ someone who cannot read or write, has ongoing low-level mental health issues, no transport, a criminal record, advanced years etc etc? And how secure/permanent are those jobs? Beneficiary-bashing from above only further lowers self-esteem and exacerbates the situation.

    Count your blessings you two, if only for your own benefit. There is no faceless mass of bludgers out there: anyone can hit the wall and in my experience it is those who share your attitude that suffer the most when it happens.

  12. AncientGeek 12

    rOb: Can’t agree more. The superannuation benefit has been tracking pretty much above inflation for the last few years once you count items like the rates rebate into it.

    But benefits like the DPB and sickness haven’t as far as I can see. They’re benefits that you have little choice about how long you have to be on them.

    The dole is now acting as it is meant to – to ease the transition between jobs. That is apparent in the short-term presence of people on it. The vast bulk are now less than 3 months. While a number are transitioning off into retraining courses, that again is what you’d expect to see in a changing economy. But the level even after you add in the housing supplement etc, still seems to be designed to make sure that you can’t even hunt for work – especially in areas with inadequate public transport. It takes money to keep a vehicle on the road.

    For instance in the cases barnsley cites above, I’d suspect a contributing problem the work is the lack of public transport. No point in taking a job when it doesn’t pay enough to cover the cost of either transport or relocation. In other words I suspect a structural unemployment problem rather than a wish to be unemployed.

    Of course if the employers wish, they could either increase wages, offer more security than a part-time or seasonal job, or lay on transport to bring the workers to them. Perhaps building low rent family accommodation closer to the areas where the work is.

    But some employers prefer to get something for nothing, and would like the state to do everything for them

  13. higherstandard 13

    ak

    Can you please explain what “my attitude is”.

    I have not argued against Bill’s suggestion of increasing benefits I’ve merely called the fact that this hasn’t happened overnight and the current government has had three terms to address this issue.

  14. ak 14

    (Quite right – sorry HS. Mea culpa, guilty of the same “lumping together” I berated Bill for)

  15. higherstandard 15

    Apology accepted …. I’m just being snippy anyway – clearly must be time for dinner and a glass of wine.

  16. AncientGeek 16

    Know the feeling. All this house cleaning today has definitely gotten me a bit more ummm sarcastic than usual.

    I hate domestic chores. Mind you I was just scanning Real Mummy. Just reading the posts was starting to make me really glad not to be around infants any more. I’d hate to think what the comments would have been like.

    I got there after reading this really interesting post Your daughter will probably have sex at the handmirror. It is the most interesting post I’ve yet read on the HPV vaccine. I must have missed the post on it here, because they referenced an idiotic comment by someone here.

  17. Santi 17

    Male the benefits more difficult to get, so just people in real need (the ill, the old, the infirm) can access them.

    The other lazy buggers should get off their fat arse and earn a living like the rest of us. A drastic reform of the social welfare system is badly needed.

    I’m sick and tired of undeserving people living off my taxes, like those who have adopted a beneficiary lifestyle and don’t lift a finger in life. Enough is enough!

  18. big bruv 18

    So IB does not like beneficiaries being stigmatised…tough luck IB, when we have had record levels of low unemployment (in spite of Labour not because of them) there is no reason at all to be drawing (stealing) money from the tax payer by way of a dole cheque or DPB.

    Bludgers are what they are and buldgers is what they should be called, there is no justification for increasing benefits and any govt that increased benefits would be committing electoral suicide.

    As a result I demand that Clark increase benefits immediately, middle NZ have been raped by this lot for the last nine years and there is not a chance in hell that they will accept benefit increases while they (the ones who pay tax) are struggling.

  19. rjs131 19

    Irishbill, do you think it is a bit artifical to say that the benefits shoudl be increased without saying how much it would cost? Surely that bit of information is relevant for this debate?

  20. “As a result I demand that Clark increase benefits immediately, middle NZ have been raped by this lot for the last nine years and there is not a chance in hell that they will accept benefit increases while they (the ones who pay tax) are struggling.”

    Therefore I assume BB that you support raising taxes in the 45,000 people who earn over $150,000 p.a. in order to give the middle class tax cuts? This is what Australia has.

    Its not about wealth envy or rich pricks. Its about using the economy in a way to make sure there is no person who goes to waste despite lack of trying or effort. Wealth envy is simply the opposite of contempt for the poor.

  21. big bruv 21

    PP

    Those that CHOOSE to “waste” deserve nothing from the tax payer.

    And let me be clear, I do not support raising taxes at all, if those who claim that they cannot survive on the benefit can always get a job.

    [lprent: bruv – I could write a program to generate your comments. Very very very predicable.]

  22. big bruv 22

    Iprent

    Could you?, it seems you have one that generates left wing comments

    Labour = Good
    National = Bad

    I might be asking a bit much but I would hope at some stage to read ONE post where you admit dear corrupt leader has got it wrong.

    [lprent to bruv:

    • I don’t write the political posts.
    • I’ve seldom seen a post here that actually praised Helen.
    • If you look at the posts, I think you’ll find that she is barely mentioned. The government she leads is frequently mentioned, often unfavourably. Probably because our posters are far more left than centrist.
    • I don’t think that you actually read the posts. Otherwise how could you come out with this twaddle. Tell me – did you read IrishBill critizing Labour in this post?

    As I said earlier – I could write a program to write your comments. It doesn’t have to read either.]

  23. But Bruv. You’re the one living off a sickness benefit. What would you do if it was cut?

    Oh and Santi? You really are a dumb arse. The benefits have been made harder to get. Honestly you lot on the right are sounding more like crazy talkback callers every day…

  24. deemac 24

    good post – benefit leels are a disgrace – but don’t diss veg patches! one of the joys of living in NZ is that you CAN grow veges pretty easily

  25. milo 25

    It’s a fascinating issue, from a policy point of view. There is a tension between the safety net and the incentive to work, unquestionably, and probably unresolvably. Labour has come down on the side of productivity, with in-work payments, working for families and the like. That worked while the tide was high, but as the tide goes out, starts to look very ugly. It emphasises that they have been quite a centrist government. (Although kudos for state house moves.)

    What to do? The ideal would be to lift both benefit and wage levels. That way, poverty could be relieved, but the incentive to work would remain. (There are more complex community building issues to be addressed as well, but that’s a different issue).

    Now I know I’m a partisan. But on this I would vote for National, because I think they are most likely to increase wage levels through sensible macroeconomic policy and microeconomic reform. And I think John Key follows that tradition, sometimes seen in the National party, of compassion. But I’d be delighted to consider the arguments for the other side.

  26. AncientGeek 26

    milo:

    And I think John Key follows that tradition, sometimes seen in the National party, of compassion.

    Kiwi Keith was certainly in that tradition, and Muldoon was as well, albeit quite incompetently as a long term policy maker.

    The question of if Key is, is to me quite open. He has said that he is but so did Bolger before he let the mother of all budgets go through in the name of macro-economics. Anyone around the the bottom of the cliff area like womans refuge will tell you that they’re still picking up the debris from that 2 generations on.

    I haven’t seen the policy from the Nats backs it up your hope.

    [lprent: fixed]

  27. r0b 27

    Now I know I’m a partisan. But on this I would vote for National, because I think they are most likely to increase wage levels through sensible macroeconomic policy and microeconomic reform. And I think John Key follows that tradition, sometimes seen in the National party, of compassion. But I’d be delighted to consider the arguments for the other side.

    How about the argument from history Milo? The last Nat government slashed benefits, hardly raised the minimum wage, and introduced repressive labour legislation that kept wages down (and allowed a huge wage gap to open up with Australia).

    So why, why, why do you expect anything different if they get to be government in 08?

  28. AncientGeek 28

    Opps – I buggered up the blockquotes somehow…..

  29. IrishBill 29

    I think it may be fair of you to believe that of Key, milo(I don’t and have seen no policy indicating it) but his front bench are all veterans of the last National government and I seem to recall Bill saying something about unemployment at 6% being the ideal.

    Thus far the only employment policy that has been confirmed by National is its policy of removing rights for worker in the first 90 days of a job. This is hardly a policy representative of a vision of a high-wage economy. Judith Collins’ knee-jerk rhetoric blaming poor budgeting certainly doesn’t inspire me either.

  30. AncientGeek 30

    milo: The other point I’d make is that you’re really only talking about one benefit – the dole.

    The overwhelming number of people on the DPB are there because they have a failed marriage and young kids.

    Sickness benefit because they have conditions that make it hard for employers to employ them. I believe a high proportion are either disabled or have mental problems.

    Superannuation’s for people that (as my parents remind me frequently) they’ve already paid for it – but that is another discussion.

    As it stands, my back of envelope calcs say minimum wage is about $400 odd gross per week. Unemployment is on the order of half of that for a single person (? IB). It is a pretty big gap already.

  31. Dean 31

    Lynn:

    “If you look at the posts, I think you’ll find that she is barely mentioned. The government she leads is frequently mentioned, often unfavourably. Probably because our posters are far more left than centrist.”

    Not as unfavourably as John KKKey is. You have to admit it.

    “I don’t think that you actually read the posts. Otherwise how could you come out with this twaddle. Tell me – did you read IrishBill critizing Labour in this post?”

    Irishbill is fine. It’s Steve “the sky is going to fall if Key is ever PM” that’s the problem.

    Have you read his posts?

    “As I said earlier – I could write a program to write your comments. It doesn’t have to read either.”

    Normally you tend to stick to technical issues, and you do them very well.

    I can’t say the same for the posts you comment on this site though.

    Do you actually read the site? Did attending the Labour conference mean more to you than you’d like to admit?

    [lprent: Key is mentioned a lot more then Clark in the posts, and probably more unfavourably. Just look in the archives page at the tag cloud. Not surprising as this is a blog written by left-wing posters. I do read the posts after I’ve finished with the comments. Steve likes pointing out the holes using numbers and graphs – sort of a reality check. Personally I’d have said the IB was way harder on JK.

    I thought I’d mentioned frequently that I’ve been a labour activist from a long time, from the right of the party. It is hardly secret. I got hauled in here because of my technical skills both at running computer systems and for knowing how blog/usenet/mail systems go wrong.

    bruv is my technical issue. He got tossed into moderation last week by Tane. So I’ve been reading his comments for the last few days before releasing them. I have this problem that I’m starting to view him as spam, generated like the other auto-moderated machine comments about selling movies, sex or tablets.

    It is a personal problem I know – but I really hate machine driven spam

    update: It is interesting that you isolate Steve out. I just did a brief pass through posts on Key. Steve writes less of them than any other poster proportional to the number of posts that he does, and I’d definitely say he is less critical than any of the others. Jaspers or a_y_b’s posts sometimes get a bit tough.]

  32. Dean 32

    “As an aside, I note that Judith Collins claims better budgeting advice is all that is needed. It reminds me of how in the late 90’s Jenny Shipley claimed beneficiaries just needed to grow their own vegetables and everything would be fine. I hope Labour does something to fix this. After reading Collins’ delusional comment I know National won’t.”

    Irish, what are the stats on benficaries smoking and drinking?

    Do you even know?

    You may wish to take this into consideration before telling everyone that budgeting isn’t the answer.

  33. milo 33

    Interesting comments. I don’t hold a torch for Bolger, but he did sack Ruth Richardson and morph into ‘The Great Helmsman’. But fair point that John Key is still a bit of an unknown quantity. I think he’s okay, and I think Bill English is okay too. The conservatives still hold sway in many other places, but I the National leadership is pretty liberal.

    And AG, yes, fair to say that I am talking mostly about the dole. There is a separate argument about the signals sent out by the DPB, but I don’t see a huge problem, except perhaps about whether we ensure disadvantaged kids (including kids of DPB recipients) have the educational opportunities and inspirational examples they need.

    Perhaps the most interesting thing is that the economic slowdown will change the political agenda. All of a sudden, poverty is big again (politically), and I suspect both major parties will be scrambling to formulate policy.

  34. r0b 34

    but I the National leadership is pretty liberal.

    Umm – what? Milo, please, on what do you base such an observation? After the departure of Rich, who are the liberals?

    And how can you ignore the history of the party (including most of the current old front bench) in your optimistic hopes for their performance?

  35. Dean. I have on good authority that Key will, in fact, sell the column that supports the sky above New Zealand to foreign asset-strippers if elected.

    [lprent: ah Steve – do you really want a reprimand for starting a flame? Besides I heard he wanted to sell the right to generate hot air (flip-flops perhaps?).]

  36. milo 36

    r0b, I think that John Key and Bill English are both liberals, unlike, say Don Brash and Jenny Shipley. Just my opinion, happy to see opposing views.

  37. r0b 37

    Milo, you’re dreaming.

    Bill is a hard core conservative Nat from a strongly Catholic background. From his Wikipedia page: “English opposes abortion,[4] voluntary euthanasia and physician assisted suicide,[5][6] civil unions,[7] and the decriminalisation of prostitution.[8]”

    John “frankly, it’s a market” Key has no strong political orientation, hence the fear that he will be managed and driven by his strongly conservative caucus. As per Brash and The Hollow Men.

    If you want Liberals Milo, vote Labour. Don’t vote National in the hope that the leopard will change its spots, because it won’t.

  38. milo 38

    Oh r0b. I don’t see liberals in Labour. I see win-at-all-costs politicians. It’s true that they have pursued a liberal social agenda. But aside from that, they just haven’t done all that much.

  39. milo. You know what got the biggest applause at the Labour Party congress (I got sneaked in for Clark’s speech)?

    It was when Clark announced that the number of people on the unemployment benefit was below 20,000 for the first time since 1979. The pride and just happiness over that achievement was palpable. I hadn’t realised before how much Labour is still what it always was – the party that wants a better deal for the ordinary person at the bottom of the heap… the delegates were so happy that so few people are now unemployed, and they were delighted that under their party’s rule the minimum wage had gone up each and every year faster than inflation and incomes had risen 15% in real terms. You can’t say they haven’t done much.. they’ve done the most important thing of all – got more people into a decent job with fair pay.

    captcha: “salary itself”. captcha gets it.

  40. AncientGeek 40

    SP: I have a membership book handy – got a spare $15 handy.

  41. Bill 41

    Have any of you guys how much resistance there was to the instigation of a system of wage slavery? How many lifes and communities were trashed? Just because having a job is now the norm doesn’t make it right or desirable.

  42. AncientGeek 42

    I’ll sign you up. You look like you could be a good canvasser.

    captcha: heroes $75
    See – costs a lot less in the NZLP

  43. r0b 43

    Oh r0b. I don’t see liberals in Labour. I see win-at-all-costs politicians.

    You see Kiwiblog spin Milo.

    It’s true that they have pursued a liberal social agenda. But aside from that, they just haven’t done all that much.

    There are none so blind as those who will not see.

    Unemployment down to 30 year lows, crime down, numbers on benefits down, economy growing, Working for Families, superannuation increases, minimum wage raised every year, four weeks leave, 20 hours free early childhood education, fair rents, interest free loans for students, poverty / childhood poverty rates down, suicide rates down, cheaper doctors vists, and employment law which stopped the widening wage gap with Australia. An independent and sane foreign policy. Planning for the long term future via Cullen Fund and KiwiSaver. Strengthening the economy with state owned assets (Air NZ, KiwiBank, Railways, breaking up the Telecom monopoly, back to ACC).

    You are here Milo trying to argue that National is going to be “liberal’ and Labour is not. It’s just crazy talk. Goodnight.

  44. Lyn 44

    Dean – at the risk of this comment being written off for using anecdotal evidence, I’ve been a beneficiary, and I don’t (and didn’t) smoke, and am a comparatively abstemious drinker (especially compared to the people I was mixing with at the time I was on the dole). While I was on the dole I was able to manage things most of the time, but going to the doctor, buying contraception, socialising (including meeting people in cafes, taking food to their houses if invited and buying gifts), driving outside of the suburb where I was living and purchasing toiletries and house-hold cleaners were often things I found next to impossible. I well remember bursting into tears when I received a care-parcel from my parents – my dad had stuffed $100 in the bottom of the box. It makes you go a bit funny in the head when you can’t participate in what used to be ordinary activities. In most respects I’m a “nice middle-class” person – I don’t fit the stereotype of a long-term beneficiary and I wasn’t one. I have a masters degree and in my current occupation I manage projects with budgets in the 10s – to 100s of thousands. I know that there’s a certain amount of wiggle-room that accrues in a budget as it gets bigger. With beneficiary-tight budgets, there’s no room for error. Life is reduced to a tightrope walk from one week to the next. It reduces people to managing day to day when they need to be thinking long-term in order to move themselves out of where they are. I strongly believe that when there’s simply not enough money, better budgeting is not the answer.

  45. r0b 45

    I see win-at-all-costs politicians.

    PS – read The Hollow Men yet Milo?

    Really goodnight…

  46. milo 46

    G;’night rOb. Joust another day …

  47. Lyn 47

    Irishbill – you may have gotten the 6% unemployment figure from my earlier comment – it was ex Alistair Barry’s excellent documentary “In a Land of Plenty” (2002). TVNZ footage never said so much.

  48. rex brown 48

    I’m not sure if this is right.

    I heard on the radio today that benefit increases are tied to the CPI?

    The problem now is that wages are increasing at a higher rate than the CPI?

    So really, they are falling behind compared to workers, but they are inline with inflation?

    So, what exactly is the problem?

    Shouldn’t a worker have a better pay increase than someone that gets to stay at home all day? where is the incentive to work?

  49. IrishBill 49

    RB, if you had read my post you would realise that the problem is that benefits are set at 20% below the poverty-line. All a CPI increase does is continue that problem. Seeing benefit level simply in terms of an incentive to work is absurd. It could equally be argued a low benefit level provides an incentive to pay poverty wages. Benefits are not just about the individuals involved but about society (hint: it’s called social welfare). I don’t know what your work is but I doubt you would be happy to have hundreds of thousands of desperate people keen to do it for half the cost but that’s exactly what workers faced in the 90’s. A regular employer comment passed across the negotiation table in those days was “if you don’t like it there’s thousands who’ll do your job for half the price.” The benefit cuts are good part of the reason wages collapsed in the 90’s and Kiwi workers are struggling now.

    Lyn, 6% was the unspoken unemployment target of the Reserve Bank and Treasury during the 1990’s. It’s also seen as the ideal figure by a certain brand of monetarist. I’m pretty certain I’ve heard Battling Bill quote it approvingly.

  50. Ben R 50

    From Lindsay Mitchell’s press release 4/01/08 (perhaps to be taken with a grain of salt, but a different perspective nonetheless):

    “According to a recently published Ministry of Social Development report, one third of surveyed sole parents receiving the DPB expressed no interest in looking for work. The report, The 2002 Domestic Purposes and Widow’s Benefit Reform: Evaluation Report also found that since the controversial removal of work testing in 2003, the ‘exit rate’ for recipients whose youngest child is 14 or older has dropped.

    “There is no surprise that other factors associated with the fall in this group’s exit rate (the rate at which people leave the benefit) included being a teenager when the oldest child was born, having already spent a large proportion of their time in the benefit system and being Maori or Pacific.

    What should worry the Ministry, ” said welfare commentator, Lindsay Mitchell, “is the number of very young newcomers has not decreased. In September 1999 there were 2,687 18-19 year-olds on the DPB. By September 2007 the number had increased by 15 percent to 3,093. Additionally there are typically six or seven hundred 16 and 17 year-old teenage parents receiving the Emergency Maintenance Allowance at any given time.”

    “Most of the Work and Income’s resources have been focussed on getting more amenable cases into work or training, Meanwhile nothing has been done to discourage the inflow of those mothers who will stay the longest in the system.”

    “Some case managers reported that the Personal Employment and Development Plans, which replaced work-testing, have made little impression on women who have been on the benefit for six to twelve years who use the new system ‘to their advantage’. Others said that their clients showed no interest in keeping a copy of their plan or binned it on the way out. The report states, ‘There was a general feeling among case managers that for many people, having a copy of their PDEP was not something they valued highly.’ “

  51. r0b 51

    Thanks Lyn. I think the world needs more personal stories like this. Politics is about people, and their lives.

  52. To go right back to the first line of the original post, why are you congratulating Ruth Dyson for “admitting” the truth about beneficiaries being worse off on her watch? According to the SST article:

    “Beneficiaries were being hit by “significant price shocks” in food, housing, power and transport, said the June 2007 report by the Ministry of Social Development. It was released to the Sunday Star-Times under the Official Information Act.”

    In other words, MSD has sat on this report for almost a year. Dyson is only ‘fessing up because she has no option.

  53. higherstandard 53

    IV2

    If that is indeed the case I retract my praise for her honesty and openess on the issue.

  54. IrishBill 54

    Good point IV2 – I’ll change my first line.

  55. Cheers IB – appreciate your ethics!

    PS – captcha = rat Lounge – hmmmmmmmmmmm

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