This has been a contentious issue for Labour and the Greens for a while. An early response from the Government to poverty issues was to set up the Welfare Expert Advisory Group. The group’s report Whakamana Tāngata Restoring Dignity to Social Security in New Zealand contained 43 recommendations.
The Government has been criticised for not implementing many of these. Its initial response was to immediately implement two of the 43 recommendations.
But Carmel Sepuloni has been working behind the scenes to implement more. This recent speech in Parliament set out some of the progress being made.
In response to WEAG recommendation 2, which is to implement principles to guide the design and operation of the welfare system, we’ve developed a working policy framework to guide the welfare overhaul, which includes kaupapa Māori values, the purpose of the welfare system as a whole, and the outcomes we want to see. In response to recommendation 3, to establish a cross-Government approach to this welfare overhaul, our Social Wellbeing Cabinet Committee is already overseeing this work. In response to recommendation 5, to implement better reporting, we are regularly monitoring the longer-term employment outcomes of people leaving the benefit system. In fact, we’ve already started to record sustainability of employment exits, which is what the previous Government completely ignored. In response to recommendation 6 and recommendation 9, to work toward greater equity for Māori, MSD has launched its Te Ao Māori strategy and action plan, Te Pae Tata, which is about embedding a Māori world view into MSD to help staff think differently about the way they work with Māori—because let’s be honest: the welfare system has not worked for Māori in this country for a very long time.
In response to recommendation 8, to build MSD’s cultural responsiveness and improve outcomes for Pacific people, MSD has launched their Pacific strategy and action plan, Pacific Prosperity, to guide future policy development in delivering better-coordinated action together. In response to recommendation 11, to remove some sanctions and obligations, we have already removed the section 192 sanction, which will come into effect on 1 April, which unnecessarily penalised sole parents. As of 1 April 2020, 24,000 children will be significantly better off as a result of this, with many sole parents’ incomes increasing by an average of $34 per week. In response to recommendation 12, to improve front-line services at MSD, we’ve introduced a client commitment charter, made changes to Work and Income offices to make them warmer and friendlier, implemented an online eligibility guide, and launched Heartbeat to better understand client experiences.
In response to recommendation 14, 15, and 16, to address issues of debt, we have started an inter-agency work programme to look at Government debt, developed the Safer Credit and Financial Inclusion Strategy, and my colleague Minister Faafoi has announced new rules around high-cost short-term lending to protect consumers from punishing debt at the hands of loan sharks. In response to recommendation 18 to improve support for people exiting prisons, we announced Māori Pathways, a group of targeted interventions from the Department of Corrections, Te Puni Kōkiri, and the Ministry of Social Development, aimed at reducing reoffending rates of high security prisoners. And in response to recommendation 20 to increase abatement rates, we have increased how many people can earn before their benefit is reduced, in line with the minimum wage, and that comes into effect on 1 April.
Carmel ran out of time and was not able to talk about what was happening with the remaining recommendations. And of those she did mention some of them need to be be accelerated, particularly treatment of loan sharks. Interest rates have been capped, but a lot more needs to be done.
She also gave this earlier speech to the Child Poverty Action Group in November last year where she said this:
… there are around 20 WEAG recommendations where work is underway or they are being actively considered whilst the remainder will need to be phased in as part of the medium and longer term, work programme.
Overhauling the welfare system is a large, expensive, complicated task with many moving parts and was always going to take more than one term of government.
As I’m sure you will appreciate many of the proposed changes for the welfare overhaul have fiscal implications and are therefore Budget sensitive so I am limited in what I can say today.
But I can give you a guide to the government’s longer term intentions within the welfare space.
In the medium-term 2 – 4 years, we will be focused on:
- Re-setting the foundations of the welfare system
- Increasing income support and addressing debt
- strengthening and expanding employment services
- improving supports and services for disabled people, people with health conditions and disabilities and their carers
- enhancing the community sector
In the longer term, 4 to 5 years and beyond, we will be focused on:
- Simplifying the income support system
- Aligning the welfare system with other support systems and Reviewing housing and childcare supports.”
Of the two original recommendations that have been implemented the increase in abatement levels needs to go much further in my opinion. The original abatement level was set in the 1990s and has only been increased by minimum wage increases.
Of course the big one is recommendation 26, increases to core benefits. The Government is urged to:
Increase, as soon as possible, overall income support to levels adequate for meaningful participation in the community, as defined by the minimum income standard (which reflects different family circumstances, for example, children, disabilities and regional area) and maintain this level of support through appropriate indexation.
Clearly there are divergent views amongst the Government parties what these should be. And National would behave like a pig in muck at any sign of increased benefits. After all it has attacked minimum wage increases even though Bridges says National wants to grow the economy for everyone.
Hopefully the next budget will include real increases to basic levels. Although to be fair to the Government its Families Package introduced in the first 100 days included the Best Start payment for families with new babies as well as the winter energy payment, and made significant enhancements to the family tax credit, the foster care allowance, orphans benefit, unsupported child benefit and the accommodation supplement.
I know that the Government has been criticised for not improving things more quickly. My own view is that this is like turning the Titanic around. National in Government made a myriad of decisions, a budget cut here, a legal tweak there, to change things for the worse. Labour will need a similar time, and a similar determination to roll back those nine years of changes.
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