Monday 30 August 2010

Policy Watch

“There is almost no indication in the report that the WWG has any notion of what
keeps people on benefits long term, or what their lives are like, or what
amazing feats they perform everyday”.
(Anne Else, commentary of the Welfare
Working Group’s Issues Paper, 16 August)

Income Inequality Report nothing to celebrate

A Household Incomes Report has quietly appeared on the MSD website. According to the website “This report provides information on the material wellbeing of New Zealanders as indicated by their household incomes from 1982 to 2009. The report uses data from Statistics New Zealand’s 2008-09 Household Economic Survey (Income) to update the previous report in the series which had information to 2008.”

The Greens have noted the absence of a government press release to accompany the Household Incomes Report. Could this have anything to do with the fact that no progress has been made in narrowing the gap between the rich and the poor (from memory NZ has had the fastest growing income gap in the OECD). In fact, on one inequality measure, the GINI co-efficient, it has increased.

One of the greatest failing of any government can be seen in its rates of child poverty. Again, on this indicator New Zealand holds a relatively unenviable position in the OECD. The report also shows no improvement in rates of child poverty since 2007 (remaining at 22%), noting that the effect of income rises have largely been cancelled out by rising housing costs in many lower income households with dependent children.

For children in homes with at least one parent working their poverty rate was 11%. However for children with no adults in work their poverty rate in 2009 was a staggering 74%. In 2009, the report finds that around half of poor children were from sole parent families. The poverty rates for older people are still very low at 9%, lower than for any other age group. Interestingly though, over half of people aged over 65 years had less than $100 per week income in addition to their pension and because median incomes have risen significant as more women join the workforce, NZ Super payment are now only equal to 48% of median household income. In 2001 it was 58%.

As the Co- Leader of the Greens points out, this report doesn’t take this year’s Budget into account. The cuts to personal taxes which will benefit the rich much more than those on low incomes combined with the increase in GST in October are likely to widen the gap. Also noteworthy is the acknowledgement that “The report’s findings capture some of the impact of October 2008 tax cuts but only a little of the impact of the 2008-09 recession.” We know from the five Vulnerability Reports produced to date that there is widespread evidence of growing hardship. Unfortunately for children growing up in poverty, the economic will recovery far quicker than they will.

Latest MSD research on Sole Parenting, resiliency and reducing disadvantage

For those of you who work with single parents you may be interested in two new MSD reports – Sole Parenting in NZ: An Update on key trends and what helps reduce disadvantage, and Resiliency in teenage mothers: a follow up study by Barbara Collins Principal Analyst at MSD. Both reports were published in July. Many of the findings in the first report support the NZCCSS findings in our 2009 Grassroots Voices report such as the effectiveness of early and intensive skilled support by home visitors (in our report it was skilled support from a community based social worker).

In this section of the MSD website there was also a report on the Lifecourse factors associated with time spend receiving benefit in young adulthood by David Welsh and Moira Wilson. I sincerely hope the Welfare Working Group takes note of this research. In the summary of the research they discuss how many long term beneficiaries have experienced “an accumulation of risk over their lifetime”. They conclude:

The findings reported here highlight the difficulties that some longer-term
benefit recipients face, and suggest that policies focused on speeding the
transition to work or improving work incentives may not be sufficient to address
these difficulties.
They go on to say

The findings provide support for policies that seek to use contact in the
process of benefit administration to address wider needs, but they also
highlight the inherent difficulties in doing this. These difficulties include
the need for skilled and sensitive engagement, the need for time to begin and
maintain conversations, and the need to integrate services that potentially span
mental health, drug and alcohol rehabilitation, education, justice and social
services and link back to local communities.

What this says to me is that Work and Income’s new lean six sigma approach which removes personalised case management is probably about the worst approach to take if you really want to be able address long term welfare dependency and the multiple issues that people in long term benefit receipt present.

Legislation – income splitting

According to a Government Press Release up to 310,000 New Zealand families will be eligible to share their income for tax purposes through legislation tabled in Parliament recently by Revenue Minister Peter Dunne under the Confidence and Supply Agreement with the National-led Government. "This bill will give couples with children the option of having a parent work fewer or more flexible hours, be at home raising their children, and able to increase their combined after-tax income," Mr Dunne said.

From an NZCCSS perspective Income Splitting is a terrible idea. The estimated 310,000 families who could benefit from this policy are middle and high income families rather than those most in need. In 2008 we made a submission on a government tax policy discussion document on income splitting explaining why it the policy shouldn’t see the light of day. In essence we argued that income splitting fails to address the financial problems of the poorest families in NZ. It provides no help for single parent households (working or benefit dependent) and is of minimal help for low income families. For the former group there is no one to split their income with and for the latter group, insufficient income to make the tax benefits of the split worth it. We argued then, and will argue again that the best way to support families in raising children is to reintroduce a type of universal child allowance – for example, making the WFF In Work Tax Credit available to all families.

Given the current economic climate we can only hope that the policy is quickly dismissed so that more thought can be given to policies that narrow income inequality rather than widen it.

Legislation – welfare and work

In a Government press release the Minister is heralding in two pieces of legislation which she holds will “break the cycle of welfare dependency and get more people in work”. At NZCCSS we are not convinced that either will achieve such lofty goals. Minister Bennett is referring to the first reading of Kate Wilkinson’s The Employment Relations Amendment Bill (No 2) and the passing of the Social Assistance (New Work Tests, Incentives and Obligations) Amendment Bill (aka the Future Focus Bill). The former bill extends the 90-day trial period to all employers and employees and the latter bill introduces mandatory work tests and a new sanctions regime for beneficiaries who don’t meet their new work obligations. The Government maintains these bills encourage job opportunities and remove the barriers to work.

Actually the first bill removes worker rights to grievance processes, thus rendering all new workers vulnerability to dismissal without reason or recourse in their first 3 months of employment, and the latter bill forces people to demonstrate that they are searching for jobs which currently don’t exist and puts pressure on single parents and those who are unwell to accept work that may not be in the best interests of their families or their health. Opposition to proposed changes to Employment Relations legislation is strong with the Dominion Post reporting 1700 workers in Auckland attending two National Distribution Union meetings on the day that Wilkinson introduced her bill.

How these pieces of legislation strengthen the economy is a complete mystery to me. Clever use of the concept of ‘incentive’ though– sounds encouraging and constructive but it’s all stick and no carrot from what I can see.

Anne Else on the Welfare Working Group’s first report:

For those of you with a keen interest in welfare reform but little time to keep up to date of the happenings, it’s worth a quick read of Anne Else’s insightful comments on the WWG’s first issues paper on Long Term Welfare Dependency. Aptly named Digging for the truth: What the Welfare Working Group report really says this paper moves beyond the superficial rhetoric and discovers some important truths that don’t make the headlines – for example New Zealand’s rate of employment for disabled people is one of the highest in the OECD (all we get told is how unsustainable the growth projections are). This is definitely worth a read.

CPAG - Rethinking welfare for the twenty-first century: Beyond the terms of reference

Friday 10 September 2010, 8.30am to 5.15pm, The University of Auckland Business School, Room OGGB5, Level 0, Owen G Glenn Building, 12 Grafton Road, Auckland

Child Poverty Action Group are very pleased to invite you to attend a Welfare Forum which they are co-hosting with The University of Auckland’s Retirement Policy and Research Centre; the Public Policy Group and the Departments of Sociology and Economics. Susan St John, CPAG’s Economics spokesperson will open and close the day and Mike O’Brien, Claire Dale and Sue Bradford from CPAG’s Management Committee will also be participating.

The Government appointed a Welfare Working Group in April 2010 to conduct a wide-ranging and fundamental review of New Zealand's welfare system, and make practical recommendations to improve the economic and social outcomes for beneficiaries and New Zealand as a whole. The aim of this Welfare Forum is to move beyond the narrow terms of reference of the Welfare Working Group, and make recommendations that recognise the current economic climate, and foreground the needs of children.

In planning for this day we have been particularly interested in learning from the Australian experience. Three speakers from Australia will join with experts from New Zealand in what should be an informative and stimulating day. Please register as soon as possible as places are limited.

The forum programme is available here (29KB). To register, please complete the registration form before Tuesday 7 September 2010 and email it to (with cheque or credit card payment). Standard registration $50; Student registration $30 (includes morning and afternoon teas, and lunch). Places are limited and registration is essential.

To keep up to date with family violence information

I’ve recently come across the What’s New Bulletin prepared by the NZ Family Violence Clearinghouse. It’s a bit like Policy Watch but with a focus on family violence prevention. You will find the latest news and information including prevention initiatives, events, training, funding & employment opportunities, research and resources. It’s full of great info. If you would like to subscribe to the What’s New Bulletin:

• Go to the subscribe page on the website:
• Choose “Family Violence List” from the drop down
• Enter your details
• Click the “Submit” button

You will be asked to confirm you email address and will receive confirmation that you are subscribed.

Hidden In Front Of Us – book launched by Child Matters

Child Matters (formerly known as CPS) have recently launched a book at Parliament called Hidden in Front of Us. In the book Twenty four adult survivors of child abuse share their experiences of being children who desperately needed an adult to stand up for them. They also share their ideas about what could have been done to help. Their words and stories provide an insight into what each of us can do when we have a concern about a child.

Farewell from Anne

This is the last issue of Policy Watch that I will write. I am moving on to a new role but have put myself on the mailing list so I can stay abreast of developments! Many thanks to all of you for taking an interest in the forever changing policy environment and helping us to understand and advocate on behalf of those not in a position to challenge the circumstances they find themselves in.

Another staff member at NZCCSS will take over responsibility for this publication. If you have any suggestions or comments to make please contact our administrator Bo on

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