No. 8 Wire Welfare: Why New Zealand is Lagging Behind

NZ COULD CATCH UP ON WELFARE DURING THE RECESSION

The government’s welfare policy is moving in the right direction and a recession is a good time to reform the welfare system, says a new report being released on Thursday.

The report Ending No. 8 Wire Welfare: Why New Zealand is Lagging Behind, by Luke Malpass of the Centre for Independent Studies, argues that introducing more rigorous work-first policies is important in a recession so that if unemployment does rise substantially, people do not lose touch with the world of work.

‘New Zealand has a relatively ‘soft’ approach to welfare that is work-first in essence but not necessarily in practice,’ says Malpass. ‘Far from being extreme, the government’s pre-election welfare policies are mild and very flexible by international standards.’

The policies proposed include reciprocal obligations and imposing penalties on those not meeting them. This would reduce the growth in Invalids Benefits, Sickness Benefits, and the long-term unemployed, as well as compelling single parents on the DPB to take up part-time work when their youngest child goes to school.

Welfare delivery around the world has seen a fundamental shift in the past decade. The policy assumption has changed from one of entitlement to one of obligation and employment.

‘New Zealand lags behind, we are one of the few countries in the world to continue to hold largely unconditional welfare policies,’ says Malpass.

‘Overseas experience shows that work-first approaches to welfare, time-limiting of benefits, workfare systems, and meaningful sanctions for non-compliance help get people back into the workforce. Even the generous welfare systems of the social democratic Scandinavian countries have tougher laws and requirements than New Zealand.’

As a society, we are wealthier than ever yet the welfare state keeps expanding. The paradox is that the more government provides, the more is expected and the less impact it has, says the report.

‘Even with large surpluses and increased government spending under the Clark government, around 8.6 per cent of New Zealand’s population rely on the state for their income, this doesn’t even include pensioners. There has also been a trend where people are dropping off the main Unemployment Benefit and moving onto the invalids and sickness benefit.’

The embargoed report is online at: https://www.cis.org.au/issue_analysis/IA109/IA109.pdf
Luke Malpass is a Policy Analyst with the Centre for Independent Studies.
He is available for comment.

All media enquiries:

Leonie Phillips

Public Affairs Manager

(04) 499 5861