More than $1b/year + human cost

October 9, 2018

The Green policy to remove benefit sanctions would cost more than $1 billion a year.

A new report from the New Zealand Taxpayers’ Union shows the success of benefit sanctions, explains why efforts to make life on a benefit easier simply encourage a culture of welfare dependency and fraud, and exposes that more than one third of unemployment and single parent beneficiaries admit to failing on their obligation to seek employment.

The release of the report, Benefit Sanctions, coincides with a Green Party campaign to remove sanctions for beneficiaries who don’t comply with associated obligations. The report also works as a submission to the Government’s working group tasked with providing recommendations to overhaul the welfare system.

Taxpayers’ Union Executive Director Jordan Williams says, “Beneficiary advocates have good intentions, but their prescriptions – removing requirements to seek work and removing sanctions – are a social and moral failure. The Green Party’s policy to make life on a benefit will simply encourage a culture of welfare dependency and fraud.”

These good intentions lead to bad policy and high costs in both financial and human terms.

Removing obligations and sanctions might look like kindness but it’s not.

It’s giving up on beneficiaries, entrenching welfare dependency with the poor outcomes which accompany it and adding to the costs imposed on the rest of us.

“Rates of welfare fraud are many times higher than most New Zealanders would expect or find acceptable under the current system. The report canvasses the evidence that easing up on sanctions and obligations for beneficiaries would dramatically increase fraud and dependency. That means driving up the cost of the welfare system for taxpayers and leaving less room in the Budget for other forms of social spending.”

Every dollar spent on benefits for people who could be working is a dollar not available for people who can’t work and other priority areas including health and education.

“If the Government wants to reduce child poverty, it should encourage the unemployed and single parents back into work and off welfare.

The report’s author, economist Jim Rose, says, “Our report advocates a help-but-hassle approach that nudges beneficiaries back into work, leaving more to spare for those in genuine need.”

Help but hassle is a far better approach than getting rid of sanctions.

Beneficiaries need to be given the help they need to get and keep work and encouragement should be firm enough to ensure they’re not more comfortable on a benefit than being independent.

“If the Government took this approach, it could afford to be more generous, within existing budgets. The difference is that the money would be more targeted to those who most need it.”

And while the billion dollar plus cost of dropping expectations and sanctions is bad enough. The human costs of long term benefit dependency for beneficiaries and their children are worse.

Benefits must never be more generous than full-time work and the longer the time on a benefit the greater the gap between earnings from work and welfare.

On top of that, long term beneficiaries are more likely to have no or low education qualifications, poor health and a greater chance of committing and/or being a victim of crime.

Some people need permanent help.

Others require temporary assistance and it is best for them, and the rest of us who pay for it, if they get the help when they need it as long as they need it but no longer.
The report is here.


Social sabotage

October 2, 2018
AM show host Duncan Garner called Green co-leader Marama Davidson incompetent for good reason yesterday morning:

The Green Party co-leader appeared on the show on Monday morning to discuss her party’s commitment to raising benefits by 20 percent, but was unable to say how much it would cost. . .

I am staggered by the lack of facts and detailed knowledge that she showed in her interview with me this morning,” Garner said after the interview.

“No detail at all. She’s exposed herself as being underdone at best, and completely incompetent at worst. It’s called flaky. . .

Flaky is a charitable description of the policy she couldn’t give costings for too:

Increasing the baseline amounts for benefits is pretty clear. That increase hasn’t followed wage increases or inflation for far too long. And removing sanctions which we’ve been very, very vocal about, which is about trying going away from that punitive or punishing approach.

Not only doesn’t she know the cost, she doesn’t know the current policy. Benefits do increase with inflation. When it’s low as it has been for some time, the increases aren’t big but they do increase with the cost of living. No sanctions? That means people who, for no good reason, don’t turn up for interviews, don’t try to find work, don’t pass drug and alcohol tests will face  no consequences. People in work are expected to turn up in a fit state to work when and where required, what’s wrong with similar expectations for beneficiaries? No sanctions will also allow non-custodial parents to get away with making no contribution to the support of their children.

Changing the threshold for benefit reductions. There are so many people who want to work, even part time, while raising young children in particular. But those incentives are just really clumsy, confusing , messy, and they don’t make it worth it,” Davidson said.

It’s sad that people regard getting paid for work which gives them a measure of independence as not worth the effort. There might not be much difference financially but even a small increase on what comes from a benefit should be regarded as a bonus, especially when it could be a stepping stone to more work and eventual freedom from benefit dependence. Davidson is right that benefit abatement for people in part-time work are less than ideal, but the alternative is worse.  If the benefit isn’t abated when people start earning, beneficiaries in part-time work would earn more than some people in full time work.

The Greens would also look at combining the in-work tax credit and family tax credit and making them less discriminatory.

They also wanted Work and Income to stay out of people’s personal lives by “moving towards entitlements based on individual needs rather than a blanket policies around starting new relationships and losing entitlements”, Davidson said.

This would mean a beneficiary could be living with someone more than capable of supporting them both and any children, and still be able to keep claiming a benefit. National put a lot of effort into social investment based on the indisputable  financial and human costs of benefit dependency. The Green policy would be social sabotage, creating an underclass of benefit dependents with neither the expectation nor hope that they might become self-supporting. They would turn the welfare safety net into a noose that would entrap people on benefits and saddle the rest of us with the financial and social costs that would result.  

e-mob for Roxburgh children’s village

May 29, 2018

Southern mayors are asking people to join an e-mob today to save Roxburgh children’s village.

Message from Central Otago Mayor Tim Cadogan: the people of the South are being asked to join in an e-mob protest (possibly the first of its kind) to get the message that failing to increase funding so the Roxburgh Children’s Village can remain operating is unacceptable to the people of the South.

Those who care about the Village and the children and families of the South that have used its services since 1949 are asked to join an “e-mob” protest, sending the very poignant Garrick Tremain cartoon (with his permission) to Jacinda Ardern this Tuesday 29 May.

The cartoon attached (is available and instructions for where to email it by emailing cartoon@codc.govt.nz

May 29 has been chosen as it is one month until the doors close on the Village. It is very important that you know that the residential therapeutic service that the Village offers will no longer be available to the children of the South, while it does remain in place for other parts of New Zealand. This is service by geography at its worst.

May 29 is also the anniversary of Mabel Howard being made our first female Cabinet Minister in 1949. Ironically, she was made Minister of Health and Children’s Welfare.

The cartoon (is available and instructions for where to email it by emailing cartoon@codc.govt.nz

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Everyone who sends the cartoon is asked to email: roxburroxburghletsnotdothis@gmail.com so an accurate count of support can be made.

The ODT answers questions about the village and the service it provides for children in desperate need here.


Teenage fertility rate drops to lowest ever

February 23, 2018

New Zealand’s fertility rate has dropped well below replacement level:

In the December 2017 year:

  • 59,610 live births and 33,339 deaths were registered in New Zealand, resulting in a natural increase (live births minus deaths) of 26,268.
  • There were 180 more births and 2,160 more deaths compared with 2016.
  • The total fertility rate dropped to a low of 1.81 births per woman, compared with an annual average of about 2.01 from 1980–2017.
  • The infant mortality rate was 3.9 deaths per 1,000 live births.
  • All regions had more births than deaths.

If it wasn’t for a lower death rate and more immigration our population would be in decline.

The replacement rate for fertility is around 2.1% in the developed world. New Zealand has joined other OECD countries in falling below that.

Part of the reason for that is more couples are choosing to have no children or just one child.

Another reason is that more are leaving it too late and fertility drops for both men and women as they age.

The birth rate has dropped for all ages and among the statistics is one very positive one,  the teenage fertility rate has dropped to its lowest ever:

The teenage fertility rate has dropped to its lowest ever, with 15 live births per 1,000 women aged 15–19 in 2017 – just under half the 2008 rate of 33.

In 1962, when fertility rates were highest for women in their twenties, the teenage fertility rate was 54 births per 1,000 women aged 15–19. While rates dropped for women in their twenties throughout the 1960s and 1970s, the teenage rate increased to a peak of 69 births per 1,000 women in 1972. The teenage rate then decreased to 30 births per 1,000 women in 1984. 

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The media release doesn’t say how many of the teenage mothers are single but the drop in the number of teens giving birth is reflected in a drop in benefit numbers for teen parents.

In 2017, the median age (half are younger and half older than this age) of New Zealand women giving birth was 30 years.  It has remained at 30 years since 1999. In comparison, the median age of women giving birth in the 1970s was 25 years.

If, we want a return to replacement fertility rates or higher the aim should be to encourage more couples to have children sooner but not too soon – in their 20s rather than their 30s or teens.

 


Poverty policy lacks ambition

February 2, 2018

The government talks a lot about reducing child poverty but its policy lacks ambition:

The Prime Minister’s ‘good intentions’ have once again fallen short, with the Government’s child poverty targets aiming to lift fewer children out of poverty than National actually lifted out in the last five years, National’s Children spokesperson Paula Bennett says.

“The Prime Minister committed her Government to reducing the number of children in material hardship over the next ten years by 70,000. Yet, over the last five years of the National government, the number of children in material hardship fell by 85,000.

“So this Government is promising to do less over a longer period of time than National did – in spite of its bold claims it would do better.

It’s making a lot of noise but aims to do less than National already did.

“National also remains more ambitious – that’s why we had committed to reducing the number of children in low-income households by 100,000 over three years, while Labour is committing to reducing the number by 100,000 in 10 years.

“National’s Family Incomes Package was also projected to lift 50,000 children out of poverty on 1 April 2018. It would have given 1.2 million working Kiwis an extra $1060 per year in the hand – and, we had committed to a further package in 2020 that would have had a similar impact.

“Labour, on the other hand, have no money for another Family Incomes Package – they’ve spent it all on a year’s free tertiary education. That is why they are giving themselves such a long timeframe to achieve what National would have done in the next three years.

What’s more important – fees-free tertiary study for people, most of whom don’t need it, or lifting children out of poverty; money and expertise for children who don’t have the pre-learning skills they need when they start school and those failing at school or adults who’ve already got through school?

“If the Government was truly serious about reducing child poverty it would reconsider abolishing the Better Public Services targets, which directly focused the public service on reducing the number of children living in poverty and tackling the causes of long-term deprivation.

Poverty isn’t just about income. It’s causes are complex and include lack of education, poor physical and mental health, and drug and alcohol dependency.

“As is becoming the Government’s modus operandi, it is all intentions and no substance. Its ambition falls way short of the action needed to actually deal seriously with child poverty in New Zealand.”

Poverty is a serious issue. Reducing it requires serious and substantial action not just good intentions.


No mention of reducing dependency

October 27, 2017

Reducing child poverty is one of the new government’s goals.

It has also talked about reducing sanctions on welfare recipients.

I have yet to read or hear any mention of reducing benefit dependency.

That was one of the goals of the previous National-led government, and one in which it succeeded.

Child poverty isn’t confined to benefit-dependent homes but welfare dependency is one of the greatest risk factors.

If the government is serious about reducing poverty it must also be serious about reducing welfare dependency.


Rights and responsiblities

September 7, 2017

National is pledging to do more to help young beneficiaries into work:

National will help more young people become drug free, move off the benefit and get a job to help ensure they reach their potential.

“Most of our young people are doing incredibly well. There are more job opportunities and more support than ever in our country, as a result of our strong economic growth,” Social Development Spokesperson Anne Tolley says. 

“But some young people on a benefit need more support. National is committed to helping them into work to ensure they can stand on their own two feet.”

National will invest $72 million over the next four years to support beneficiaries under 25 years of age by:

  • Guaranteeing work experience or training for those who have been on a jobseekers benefit for six months or longer, and financial management training to help them develop financial responsibility
  • Providing rehabilitation services if drug use is identified as a barrier to employment
  • Ensuring all young people under 25 who are on a job seekers benefit receive intensive one-on-one case management to get a job.

“Only 10 per cent of young people who go on a jobseekers benefit stay for more than six months – but for those that do, their average time on benefit is almost 10 years,” Mrs Tolley says. “We want to invest early, and give them one on one support so they can develop the skills they need to move into the workforce.

“We will guarantee them access to work experience or training courses designed specifically to get them ready for work.

 

“In addition, one in five beneficiaries tell us that drug use is a barrier to them getting a job – so we are increasing the support we give them to kick drug use and get work ready.”

People who go from school to a benefit are less likely to be work-ready and more likely to stay benefit-dependent for longer.

Putting this money and effort into helping them become employable will pay dividends for them, potential employers and the country.

National will also place obligations on those who do not take up the significant opportunities available in New Zealand to start work or training.

Job seekers without children who refuse work experience or training or recreational drug rehabilitation will lose 50 per cent of their benefit entitlement after four weeks of not meeting their obligations, with further reductions if that continues. This will also apply to those who continue to fail recreational drug tests, where these are requested by prospective employers.

The lower benefit payments will only be able to be used for essential needs such as rent and food – like we currently do with our Money Management programme for 16 to 19 year olds.

“This significant extra support we are announcing today will come with obligations and personal responsibilities, so those who won’t take the opportunities available to them will lose all or part of their benefit until they take steps to turn their lives around.

“We know benefit sanctions are an effective tool to help people into work, as 95 per cent of people who receive a formal warning meet their obligations within four weeks.”

Any benefit reductions will be made at the discretion of WINZ staff, to take account of individual circumstances. And once individuals decide to meet their obligations, benefits will be reinstated.

“New Zealanders are creating real opportunities for themselves and for New Zealand, through hard work and a commitment to doing better. National supports those efforts and is focused on helping all New Zealanders get ahead, even our most vulnerable,” Mrs Tolley says. 

National will roll out the changes from 1 July next year.

People who work have the right to get paid and the responsibility to earn their pay.

People who don’t have jobs in New Zealand have the right to receive a benefit and with that goes some responsibilities which include being work ready.

For some people that isn’t difficult. Others need a little help and some need a lot.

This policy recognises that and is putting human and financial resources into ensuring those who need help get it and those who refuse it should face consequences.

It recognises that the best assistance for beneficiaries who could work is to help them get jobs and independence.

It is an investment that will pay financial and social dividends for young people and the country.

 

 


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