The Nats like to pat themselves on the back over reducing the numbers on benefits. For a while now I’ve been asking a quick question – what happens to those who are kicked off? Fewer than half move in to jobs. What happens to the rest? No one seems to know “officially” – though the rising tide of poverty and homelessness seems to answer the question in the real world.
Maybe we’ll see some more focus on this question – now that concerns have been raised internationally:
Australia can learn from the limitations of New Zealand’s welfare reforms
The Australian government is embarking on welfare reform to try and wean people off long term benefit reliance. Social Services Minister Christian Porter has indicated that New Zealand’s investment approach is one to follow, after the government flagged it would be cracking down on people cheating the welfare system during the election campaign.
This isn’t the first time this idea has been floated in Australia, as the final report of The McClure review of welfare in 2015 also promoted the approach.
But in using New Zealand’s investment model as a guide, it may be doomed to make the same mistakes.
New Zealand’s welfare system is focused on getting people off benefits. But it fails to measure the true economic costs and benefits of doing so.
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The over-arching concept behind the approach is sensible. In making dollar decisions about allocating employment programmes – job search assistance, training or subsidised work – to beneficiaries to get off welfare and into jobs today, the future consequences should be considered.However getting into the nitty gritty detail of how this is actually achieved in New Zealand is when serious problems emerge. Despite the stated aims of the New Zealand policy reforms, the investment approach is not about finding people stable employment.
Rather it is about getting people off benefit over time. That is what it measures. That is what is valued. That is how government agencies’ performance is rewarded.
Leaving benefit and getting a job are positively – but far from perfectly – related. People may go off benefit into education, building up a debt they are unable to service.
They may move into the black or grey economy. They may re-partner. They may move onto the streets. Or they may get a job.
The investment approach is indifferent to all these vastly different potential destinations. And even if people go into jobs, the investment approach treats all jobs as equal.
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So the claim, made by the New Zealand government, that the investment approach is working, even if true, only judges the approach by its own narrow yardstick. That yardstick is an inappropriate one in assessing economic and social efficiency of allocation of government resources to help people get work.
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The second issue with the investment approach is that it confuses income redistribution with economic efficiency. Welfare benefits are what economists call transfers. … It treats the long term liability as a true cost. That is a basic error and it’s now the conceptual basis for New Zealand’s public policy in the welfare area.There are further issues. A successful welfare system is one that ensures only those who are entitled to welfare are paid it, and all those who are eligible for welfare and need it, get it.
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The investment approach does create performance incentives to winkle out welfare cheats. But it does not address the other side of the same coin – connecting the truly entitled but stigmatised and uninformed with income support. Indeed, it creates incentives to increase stigma and muddy entitlement information. Again, this is policy failure. …
Well I’m glad someone finally said so! And in The Guardian:
New Zealand experts warn Australia data-driven welfare ‘abuses and brutalises’
In 2012 New Zealand introduced a new welfare system based on data collection. Australia is now planning to do the same, to the horror of experts who say it harms rather than helps the most needy
New Zealand welfare experts have slammed the Australian government’s decision to copy their welfare system, saying the changes are unproven and are causing New Zealand’s most vulnerable to “check out” of any relationship with the state.
“In New Zealand our welfare system operates the same way as our prisons – it treats beneficiaries as a threat to society, to be policed and managed,” said Darrin Hodgetts, a professor of societal psychology at Massey University and an expert on poverty in New Zealand.
“If Australia want to abuse and brutalise their people, then sure, copy our system.” …
NZ under National is being used internationally as an example of a bad welfare system. This is the Brighter Future.
Do we care? Are we going to fix it?
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