Cat MacLennan: We Are Beneficiaries

Cat MacLennan is a journalist and barrister. This post was originally written and published under the auspices of the Democracy Project. Some links were added to references in the publication in this site.

Approximately 2.8 million of Aotearoa New Zealand’s 4.9 million residents are now beneficiaries.

That figure is made up of 1.7 million workers who are wage subsidy recipients; 781,000 people receiving New Zealand Superannuation; 175,000 Kiwis on jobseeker support; and 160,000 receiving other benefits.

On top of that, documents leaked to Radio New Zealand show that the Ministry of Social Development is bracing for up to 300,000 additional benefit applications as a result of the global pandemic.

Covid-19 accordingly means that a majority of Kiwis are currently beneficiaries. Now is accordingly the perfect time for a rethink of our punitive and hostile attitudes to people who receive state support.

In recent years, this country has been characterised by some of the worst attitudes in the developed world towards beneficiaries. Victoria University Professor of Policy Studies Jonathan Boston, in his 2019 book Transforming the Welfare State: Towards a New Social Contract, notes that there has been a fall in support for egalitarian and community values in Aotearoa New Zealand since the 1980s and a hardening of views about those receiving state support.

The proportion of New Zealanders supporting government measures to reduce income differences between the rich and the poor fell from 50 per cent in 1992 to 40 per cent in 2009. In the same period, the percentage of people who thought the rich should pay a larger share of their income in tax declined from 70 to 50 per cent.

By 2009, only 45 per cent of Kiwis agreed or strongly agreed that the Government should provide a decent standard of living for the unemployed. Among advanced democracies, only the citizens of Flanders, Belgium, recorded a lower percentage.

Boston observes that this country’s tougher attitudes to those in need mirror the United Kingdom’s hardening views of those receiving state support: overall, citizens have become less sympathetic to the needs of the poor, the sick and the unemployed.

In the United Kingdom, 88 per cent of people agreed in 2001 that the Government should be primarily responsible for ensuring unemployed people had enough to live on. By 2011, that figure had fallen to 59 per cent. In 1991, 26 per cent believed that benefits were too high and hampered people standing on their own two feet. In 2011, that percentage had more than doubled to 54 per cent.

The International Labour Organisation’s World Social Security Report 2010/11 stated that Denmark, Finland, Sweden and Norway recorded agreement or strong agreement of between 77 and 84 per cent with the proposition that governments should provide a decent standard of living for the unemployed. Only 45 per cent of Kiwis supported that view.

Our negative views of those in hardship are manifest in many other ways. People unfortunate enough to be out of work are labelled “dole bludgers,” while mothers receiving sole parent support are depicted as slovenly, drug or alcohol-addicted, bad parents.

When the media reported that working people were living in their cars, the country accepted that there was a housing crisis. If the stories had been about beneficiaries sleeping in their vehicles, Kiwis would have dismissed this as the result of “poor choices” and people’s own faults.

One social agency has said that the pandemic means it is dealing with people who have never had to ask for help before. That organisation knows this will provoke sympathy from New Zealanders, but the subtext of that attitude is that if you repeatedly need help you are a bludger and greedy.

All of this is a very far cry from 1938, when Aotearoa New Zealand was proud to hone its international reputation as the social laboratory of the world by passing the Social Security Act to sit alongside votes for women in 1893 and pensions for the elderly in 1898.

Prime Minister Michael Joseph Savage said that a new principle was introduced by the 1938 social security legislation

“Citizens of the Dominion are insuring themselves against the economic hardships that would otherwise follow those natural misfortunes from which no one is immune.”

Those words say almost everything and perfectly encapsulate just how far our attitudes to the unfortunate have changed for the worse in the intervening 82 years.

Savage and his government recognised that misfortune is largely a matter of luck, that everyone is susceptible to risk, and that economic hardship often follows.

By contrast, neoliberalism says that poor people are the authors of their own disadvantage: they did not work hard enough; they did not save enough; they had too many children.

All of that is wrong. Luck plays an incredible role in life. People born in a poor country have far less chance of being economically secure. Those born with a chronic illness or disability will face discrimination all of their lives, will find it hard to obtain work and, statistically, will be at high risk of being paid low wages.

White people are overwhelmingly paid more than non-white people, and men are paid more than women.

Similarly, the media regularly publishes stories about people in their twenties who have accumulated property portfolios comprising multiple homes. The headline and general tenor of the articles are that “anyone can do this if they work hard enough.” It is only in the detail of the story that it is revealed that almost all of these property barons got their start by being gifted large sums of money by their parents to purchase the first home. For the overwhelming majority of New Zealanders, that is not a possibility.

In fact, there is no level playing field. Chance deals people entirely different hands when they are born, and that has a huge and enduring impact on their lives. This country recognised that in 1938 when we decided it was right to support people who suffered misfortune. We need to return to the same philosophy now.

The reason this is vital is that, until we change our attitudes to beneficiaries, no significant benefit reform will occur. New Zealand governments have fostered punitive and negative attitudes to those who require state assistance and those views are now so prevalent that no government is going to use its political capital by doing what obviously needs to be done to restore proper benefit assistance.

(Even the word “beneficiary” is regarded as a negative description: I know that some superannuitants will be indignant that I have included them in the list of beneficiaries at the start of this article. They say that they are not beneficiaries because they have paid taxes to fund their pensions.)

The current Government set up the Welfare Expert Advisory Group in May 2018 to report on how to deliver a social welfare system to ensure that people had an adequate standard of living, enjoyed dignity and could participate meaningfully in their communities. The group reported a year ago and made 42 recommendations, including the obvious proposal that benefits should be lifted to liveable levels.

However, the Government speedily made it plain that it did not intend to implement the bulk of the suggestions – aware that it would need to spend a large amount of political capital to make the changes and being unwilling to do so.

It was not by chance that Prime Minister Jacinda Ardern at the start of her government’s term pinned her reputation to tackling child poverty, rather than tacking poverty as a whole. Reducing child poverty is a far more acceptable goal because it is much harder for people to blame children for their unfortunate circumstances. The labels “bludger,”  “addict” and “lazy” are rather difficult to apply to children and so there is more sympathy for their plight, and more willingness to spend money on addressing it.

The Covid-19 pandemic means that many middle-class Kiwis are having their first experiences of dealing with the Ministry of Social Development. They are about to find out how low benefit levels are and how hard it is to obtain one’s legal entitlements. For the first time, these New Zealanders will learn that this country since 1991 has deliberately set benefits at rates so low as to be unliveable, on the basis that this will incentivise people into jobs.

Already, there have been media stories about people being shocked that they are denied support, as well as suggestions that the ministry has been misapplying the law relating to the impact of redundancy payments on benefit entitlement for decades.

Misinterpretation of the law by the ministry to wrongly deny people support is nothing new. In the past, the ministry has wrongly applied the law to deny people the Domestic Purposes Benefit, the Accommodation Supplement and the Special Benefit on a large scale. However, the difference then was that those misinterpretations of the law affected people who needed long-term support and fitted the country’s images of the non-deserving beneficiary.

Despite lengthy campaigns by beneficiaries, advocates and lawyers to draw these issues to public and government attention, it took years to try and obtain remedies and changes in policy.

By contrast, I expect that the issue about redundancy and benefit entitlement will be speedily addressed and remedied by the ministry and the Government, because the middle-class people affected have the power to draw media and political attention to the matter.

Ardern in her communications about the pandemic refers to New Zealanders as being a team of five million, while the Government’s Covid-19 announcements state that “We are in this together.”

Both of those statements are right. So, let’s also accept that New Zealanders are one in the good times as well as in the bad. People do not choose to have accidents, contract serious illnesses, lose their jobs, or have their relationships break down. All of these occurrences are Savage’s “natural misfortunes from which no one is immune.”

Punishing people who suffer misfortune by deliberately setting benefits at levels so low as to be unliveable merely doubles citizens’ misery and makes it far less likely they will ever recover from their misfortunes. Condemning large numbers of Kiwis to poverty also piles additional costs on taxpayers.

People in poverty have poorer health and contract preventable illnesses, thereby requiring health care they would not otherwise need. They are also more likely to be victims and perpetrators of crime, which leads to higher spending on police, the courts and prisons. And unemployed people require benefit support and do not pay the income tax the Government would receive if they were employed.

Thus, our punitive and mean-spirited attitudes to the vulnerable not only make their lives far more miserable, they also cost us money. Let’s get back to Savage’s philosophy and extend a proper helping hand to Kiwis in need so they can overcome their bad luck as soon as possible and have a future of full participation in society.

Covid-19 has shown us that #WeAreBeneficiaries. Those New Zealanders who only need state support for a short time in their lives are incredibly lucky. Let’s stop looking down on and punishing those who are less fortunate.

A good start would be to show the Government that there is broad public support for implementation of the Welfare Expert Advisory Group’s recommendations.

Cat MacLennan is a journalist and barrister

This article can be republished under a Creative Commons CC BY-ND 4.0  license. Attributions should include a link to the Democracy Project.