Welfare isn’t working

Quote of the day:

The benefit system is simply not working and not delivering for New  Zealand. One in eight New Zealanders of working-age, is on a benefit, while 220,000  children live in benefit-dependent homes. This is creating too many vulnerable  people and trapping them in a life of limited choices, poverty, and poor  health. Evidence clearly shows children are better off when their parents are  in work and not on welfare.

This week we announced a two-stage programme to fundamentally alter the  welfare system with a new work-focused benefit, greater work expectations, and  an approach that focuses on the long-term cost of welfare dependency.  Bill English

Welfare isn’t working.

Income from benefits for those who could work should never be high enough to provide a disincentive for doing so.

That means most people on benefits will be poor and the longer they stay on benefits the poorer they become.

Encouraging them to find work, and helping them become work-ready if they lack skills or qualifications is more expensive in the short-term than letting them languish on benefits. But it will have a long term pay off for them, their dependents, the economy and society.

9 Responses to Welfare isn’t working

  1. Psycho Milt says:

    As usual, National has some hefty cognitive dissonance going on this issue.

    Here’s the supposed logic of your post:

    People on benefits live in poverty, which will become worse the longer they’re on a benefit.

    The relatively small difference in income between working and living on a benefit is a disincentive to find work.

    Therefore, income from benefits needs to be made lower (implied) and beneficiaries must be pushed to look for work despite the disincentive of the low difference in income.

    As usual, the elephants in the room – low wages and a drastic shortage of full-time jobs – go unremarked.

    We’ll know National are serious about reducing the numbers on benefits when:

    1. They stop supporting employers attempting toforce pay and conditions down through de-unionising and casualising their workplaces (that will address the low-wage disincentive).

    2. They stop pretending there’s nothing the govt can do to get people working. There’s actually plenty the govt can do, it just doesn’t want to.

    3. Once we’re back to actual growth rather than wildly optimistic promises of growth in the future, then start forcing people off benefits.

    At the moment, all they’re planning to do is help employers with reducing pay and conditions, by ensuring a plentiful supply of desperate job-seekers willing to take anything.


  2. homepaddock says:

    No PM – the mroe people in work, the lower the burden of the state, the better the eocnomy is and the higher wages become.


  3. Peter says:

    The single greatest influence on welfare beneficiary figures is the performance of the economy as a whole (look at the decline in beneficiary numbers during the period of economic growth in the early-mid 2000’s).

    Without a strong economy and strong job growth any ‘tightening up’ on welfare is pointless and cruel. As PM noted above, improved economic performance is essential and requires more than some vague neo-liberal promises concerning the lower ‘burden of the state’.


  4. robertguyton says:

    “No PM…”
    I stopped reading right there.


  5. jabba says:

    “robertguyton says:
    I stopped reading right there


  6. robertguyton says:

    Words get to big, jabba?


  7. jabba says:

    so many errors these days bOb .. is it the drink?


  8. Lindsay says:

    Peter says, …look at the decline in beneficiary numbers during the period of economic growth in the early-mid 2000′s…

    DPB declined only slightly (the benefit which is the subject of the recent reform anouncements) . IB and SB grew. The OECD finds that disability benefits are now the main working age benefits in most developed countries and refers to this pheneomena as “medicalisation of labour market problems.”

    See my graph here:



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