How many beneficiaries does it take to make a crisis? And what does history tell us? When were benefit numbers at their worst? For all this and more, read on...
The Welfare working Group (WWG) is convinced. There are "major deficiencies" in New Zealand's welfare system. "Fundamental change" is required. The costs are too high and they are ringing the alarm bells.
I'd agree that those adults who can work should provide for themselves and that the 330,000 working age New Zealanders living on a benefit is not a record of which we should be proud. The Prime Minister and many others have quoted the figures that since 1970 the percentage of the working age population who live on benefits has increased from two to 13. This, he declares, is unacceptable.
But what percentage would be acceptable? What is realistic?
The WWG wants 100,000 New Zealanders off benefits by 2021, a round number that suggests it was chosen simply because it is round. And large. But is 200,000 on benefits suddenly our definition of success?
This matters because it raises other questions, such as whether we have a clear idea of what percentage of the population will simply never work again, what percentage have been nobbled by injury or illness and what percentage simply lack the skills for the jobs available. In other words, how many New Zealanders are simply going to struggle to hold down work, regardless of policy or ideology.
Or, perhaps a better question is whether we have a clear idea of just how many jobs the New Zealand ecomony of four million souls can realistically create.
To this end I've had a look back at the history of benefit numbers. And they tend to say, crisis, what crisis? Or, at least, if it is a crisis we've enduring it for a generation.
I can only go back to 1976, but for 18 of the years since the percentage of the working age population on a benefit has been 12 percent or higher. In the past 20 years, from 1990-2010, the average has been 14.2 percent; higher than it is today.
The government's choice of 1970 as the starting point for its comparative dates suits its narrative that 'something must be done!'. And indeed in the '70s the average was four percent.
So what's changed since 1970? Paula Bennett said on Q+A on Sunday "it's a different sort of country we live in now", and she's not wrong.
Have many more become addicted to "lifestyle" welfare? Have we lost our work ethic? Are generations of bludgers breeding generations more? I'm not convinced, at least on the data I've seen.
As I've written before, since 1970 we've seen the introduction of the DPB. That is now the largest benefit, taking care of more than 100,000 New Zealanders, many of whom wouldn't have been on a benefit in 1970. Given that it allowed women to get out of unhealthy, unhappy, even dangerous, relationships, I assume we think it's not a bad policy. We've seen tariffs removed and a resultant collapse of the manufacturing sector. Oh, and then there's the increased percentage of women in work and the number of people working on past retirement age. Plus, of course, we've seen the government sector cut and assets sold into private hands, resulting in a massive loss of jobs.
Forgive me if I'm repeating myself, but this brings me to Sue's post last week, in which she wrote there are too many New Zealanders on benefits:
"not because they’re lazy bludgers, but rather because Labour and National Governments in the 1980s and 1990s deliberately created mass unemployment through their economic policies..."
Several comments laid into her for that, but she has a point. I wouldn't use the word "deliberately", but history tells its own story. She has a point. Now that I've got the numbers I can more confidently say that unemployment leaped when Labour and National reformed the economy, handing chunks of the public sector to private owners. It's hard to believe the two aren't linked.
The percentage of the working age population on benefits rose significantly in the late '80s, hitting double digits for the first time in 1988, sitting consistently at 14 or 15 percent through much of the '90s before peaking at 16 percent in 1998 and 1999.
Government departments may have been inefficient, but they employed people who then struggled to meet the requirements of the private sector. The rail and post office and so on may have been little better than make-work schemes at times, but even being just marginally better meant that they did, well, make work and keep people off benefits.
The government is right to talk about linking up training and childcare, about better assistance and a focus on skills. All those efforts can help some make the step from sub-market ability and give them marketable assets.
Maybe there's simply a larger number of people than we'd care to admit who aren't up to the kind of work the market requires. Maybe we need to think harder about how to create sustainable, extra-market jobs that do minimal damage to the private sector's own creation of jobs. Maybe we need to put an end to the national tradition of blaming beneficiaries for their plight. And maybe if governments want to cut benefit numbers, it should do away with the stick and put its resources into growing more carrots.