Long term benefit dependency not good for individuals or society

Does anyone really believe that long term benefit dependency is good for either the people receiving them or society?

Judging from the howls of anguish which have met the release of the Welfare Working Group’s summary paper some people do otherwise they wouldn’t be so upset at the prospect of addressing the problem.

Nobody is suggesting that benefits shouldn’t be available to offer short term assistance for people in temporary need. Nor is anyone suggesting people who are unable to work because of health issues or other circumstances beyond their control should not get long term assistance.

The problem is people who could work to support themselves and don’t.

They’re the ones, which Garrick Tremain portrayed so well, taking welfare not as a safety net but a hammock.

I can remember reporting on second generation beneficiaries nearly 30 years ago, by now some families must have the third or even fourth generation on benefits.

One of the reasons people choose state asistance rather than work is, as Lindsay Mitchell points out, they get more money than thy could earn in wages.

It must be galling for people on in low-paid work to know that some of the tax which comes out of their pay contributes to keeping people who get more in welfare than they earn.

There are no quick and easy solutions to the problem, but economic growth will help. More better paid jobs would ensure those in work are better off than they’d be on benefits.

Sickness insurance better than benefit?

The Welfare Working Group’s pronouncement that the benefit system is unsustainable is not unexpected.

One of the reasons our economic growth is so slow is that the number of people getting some or all of their income from the public purse is so high.

The people hurt most by this are those on low wages who find themselves little if any better off than some on benefits.

Those who can work should do so and changing incentives sp people are less likely to go on them and move  off them more quickly is one way to reduce the welfare burden.

 

The report also echoes Ms Rebstock’s call for New Zealand to look at insurance-based welfare systems, like those in Canada, where workers pay insurance premiums.

“Unlike an insurance-based system, the [existing] benefit system has weak incentives for people to reduce the chance of adverse events occurring,” the report says.

This would make sickness more like accidents where workers and businesses pay premiums.

I am cautiously supportive of that.

Having more people in work and paying net tax would reduce the welfare burden which has benefits for the people concerned and society as a whole.