Policy Watch

Women don't need to be dragged kicking and screaming off the DPB, they need good childcare and secure, well-paying jobs. (Tapu Misa on welfare reform, 29 March 2010)

Welfare Reforms – déjà vu

The adage that comes to mind when you read about the government’s proposed changes to welfare is - If you keeping on doing what you’ve always done you’ll keep on getting what you’ve always got. We’ve been down this road before. The reforms will save very little money, move few people into work, create enormous amounts of unnecessary administration and will fuel public misconceptions about the vast majority of beneficiaries. The PM’s snide ‘kick in the pants’ comment in his speech notes on benefit reform was unhelpful to say the very least.

CTU President Helen Kelly has commented “Kicking people off the dole when there are no decent jobs to go to will not put money back into the economy. It will only drive some people further down a spiral of poverty and helplessness.” We agree.

A very quick overview of the changes is outlined in the Minister’s press release. In short, the government’s welfare reforms regurgitate their election manifesto. It was misguided then and still is. There are two elements that we acknowledge are a more in the right direction. Firstly, the enshrining of CPI indexing of benefits into legislation – to date it’s been a convention rather than a requirement. We also support the lifting of abatement rates – however note the change is small and unlikely to impact on poverty rates.

The reforms are contained in the Social Assistance (Future Focus) Bill introduced into Parliament on the 23 March. It has since been sent to the Social Services Select Committee. Public submissions close on May 14th. NZCCSS will prepare a submission, write a feature article for the next issue of Kete Kupu and we have already expressed our initial views in a NZCCSS press release. The implications of the government ‘unrelenting focus on work’ for member agencies and other NGOs was ably expressed Captain Jerry Walker in a Salvation Army press release. “The Salvation Army has seen a 40 per cent increase in the demand for food parcels and has no wish to see these lines of desperate people seeking food assistance lengthen as the State takes it for granted that already hard-pressed non-governmental agencies can cope with a flood of displaced beneficiaries”.

Simon Collins from the NZ Herald has spoken with the Rotorua People’s Advocacy Centre which is reporting clients already being bumped from the invalids benefit to a sickness benefit reflecting Work and Incomes tougher stance. This change costs beneficiaries $49 per week – a 20% cut in income.

For those interested in the impact of compulsory work policies on children, it’s time to dust off Mike O’Brien’s 2005 Workfare: Not Fair for Kids? This was a technical paper written for the Child Poverty Action Group and while the government is not proposing work-for-the dole schemes, its compulsory part time work requirement for DPB and Sickness beneficiaries are of relevance. Also valuable is Susan St John’s analysis of the PM’s suggested $200m welfare savings which she concludes is ‘illusionary’. Tapu Misa’s references to research showing the correlation between falling wages and increasing rates of single parenthood are also compelling.

Three Strikes is in

The Law and Order Select Committee have reported back to the government on the Sentencing and Parole Reform Bill (aka Three Strikes). The majority of the Select Committee have supported the Bill. The Labour Party Minority View, contained at the end of the report provides an excellent summary of the shortcomings of the process and the substantive inadequacies of this piece of politicking (I mean legislation). It is noted in the Minority Report that both the Ministry of Police and the Department of Corrections have pointed out the lack of evidence regarding the deterrent effect of the three stage regime. Unfortunately the Government appears to have selective hearing. For further critique of why the Three Strikes legislation is unjust check out the press release from the Maxim Institute and a Radio NZ podcast interviewing legal experts who describe the policy as irrational and unjust.

PARS National Office loses funding

As at the end of March the Prisoners Aid and Rehabilitation Services (PARS) National Office has lost its funding from the Department of Corrections. The funding has been diverted to the 17 regional societies for the next six months. After that the Department will be seeking tenders. Hear more about this in a Radio NZ Podcast.

Target Communities

Given the perilous state of PARS in terms of government funding, it is of interest to see Prison Fellowship NZ developing a programme called Target Communities which works with prisoners, before and after release through the use of a mentor and a circle/community of support. Such a programme is important because of the growing numbers of people in prison in NZ (second only to this US in this regard) and our high recidivism rates (over half of offenders return to prison within five years). It’s encouraging to see Prison Fellowships NZ developing a resource to help church communities (and other groups) who would like to help but are unsure of how to go about it.

Tax Reforms

NZCCSS has been considering the impact of the proposed tax reforms on vulnerable groups. In essence NZCCSS is opposed to proposals to increase GST and to give across the board cuts in personal tax rates because of the uneven nature of the redistribution. We are acutely aware that 46% of tax payers, an estimated 1.5 million people, earn less than $20,000 per annum. Even with compensation for GST this group will still be relatively worse off as most of the returns go to those on higher incomes. Unfortunately the government has chosen not to introduce a capital gains tax. Such a tax would have helped to ensure that better off people pay their fair share of tax. We have recently sent a letter to the Prime Minister and Deputy Prime Minister expressing our concerns. We have argued that the current weighting of the proposed tax cuts are an unjust redistribution of wealth that will worsen already wide income disparities.

Record numbers need support with food and shelter

Wellington’s Downtown Community Ministry is reporting record numbers of people seeking help to feed themselves and their families. In their press release they also note that demand at the Wellington Night Shelter has increased 54% in the first quarter for 2010 compared with the same quarter 2009. Similar trends are being experienced by most of our members and are reflected in the latest Vulnerability Report.

Research confirms the health benefits of good home heating

According to an Otago University Press Release a recently published study shows that installing heat pumps, wood or pellet burners or flued gas heaters is the key to cutting school sick days for children with asthma. While this conclusion is not surprising it’s important to have the empirical evidence. The study showed school absences reduced by 21%. Like the lead researcher, Sara Free, we share her concern that “as power prices are set to rise in most parts of New Zealand this winter there is a risk that families will cut back on home heating to save money.”

The cost of electricity will go up by I cent per kilowatt on 1 July as a result of the Emissions Trading Scheme. The average house consumed about 10,000 kilowatts of electricity per annum so the annual average bill will increase by about $100 p.a. And then there’s the normal increases in electricity prices – Contact Energy told the Finance and Expenditure Select Committee recently that prices need to rise 4-5% to pay for new power plants. Then add the new GST increase…. It’s clear that more people will be struggling to stay warm this winter.

Cutting back on backroom support false economy

Ever wondered what health bureaucrats do? Dr Gay Keating from the Public Health Association explains the important roles of bureaucrats in the health system and the implications of cutting back on backroom support. This article demonstrations the importance of thinking critically about the real implications of the value-for-money sound bites we hear frequently from Ministers.

Housing Innovation Fund

Acting Housing Minister Maurice Williamson announced on 30 March that six community housing organisations have been successful in securing government funding to build or acquire 45 new properties throughout New Zealand for families and individuals in need.
http://www.beehive.govt.nz/release/housing+innovation+fund+recipients

NZ scores a ‘D’ for inequality

The NZ Institute has recently launched NZahead. NZahead comprises 16 societal performance measures for New Zealand, categorised into social, economic, and environment. Five of the 16 measures are social and include: life expectancy, unemployment, suicide, assault and inequality. Each measure is graded according to NZ’s performance compared with 29 other OECD countries. We score a ‘D’ on the inequality measure with most other countries performing better on this measure, that is, being more equal. Simon Collins from the NZ Herald discusses the performance measures in terms of how youth are losing out and in the context of inequality.

Careerforce Seeking Aged Residential Care Expert

Careerforce is seeking to engage the services of someone with aged care residential experience to work with them to ensure the needs of the aged care residential sector are met. The focus of the role would be on qualification development, managing the delivery of training, and understanding the strategic training needs of the sector. This position can be full or part time for up to 12 months. Anyone interested in this fixed term contract should contact Gill Genet on gill.genet@careerforce.org.nz (or phone 0274 329835).

News in short:

• As of 1st April the adult minimum wage goes up from $12.50 per hour to $12.75 - $10 extra for a 40 hour week
• As of 1st April the new entrants minimum wage (for 16 and 17 year olds) and the training minimum wage has increased by 20c to $10.20 per hour.
• A cost of living adjustment of 1.96% was made to all main benefits on 1 April.
• Superannuation rates will be further adjusted to bring them up to 66% of the net average wage. Therefore, New Zealand Superannuation and Veteran’s Pension rates will increase by a total 2.31% ensuring older New Zealanders benefit from increasing wage levels.

Given the government’s proposed changes to welfare, the following quote is very apt if the word ‘programme’ is replaced with ‘reform’:

“The goal of welfare programmes should be to reduce poverty among families with
children. Ending dependence on benefits should be the result of achieving this
goal not be the goal itself.” (Shields & Behrman –cited on the back cover of
CPAG’s Workfare: Not Fair for Kids?)