The government Welfare Working Group's 'Options Paper' was released this afternoon. While Paula Rebstock says nothing is decided yet, its overall direction confirms my earlier fears. It could make the 1991 benefit cuts look like a picnic

The Government’s Welfare Working Group (WWG), headed by former Commerce Commission Chair Paula Rebstock, has just issued its second major position paper.

Their latest effort follows the August Issues Paper which at the time was widely panned by many welfare reform and economic experts, including Anne Else in her excellent response.

This time around, the WWG goes deeply into options for reform, inviting further submissions from the public, with a short deadline of 24 December.

While Ms Rebstock repeatedly states that "the Working Group does not have preferred options at this stage", overall, the language and focus of this report only serve to confirm fears held by many of us about the direction in which the Government is heading.

Paula Rebstock and her team, with a budget of over $1 million, are clearly doing their best to meet an agenda that was basically laid down from day one of this exercise.

The focus on paid work as paramount; the desire to force as many people as possible into the work-tested category of benefit; the push to reduce numbers of people dependent on benefits; and the idea that the costs of the benefit system should be based on an insurance method of assessment are all maintained.

By using figures that assume people on the DPB and Invalid's Benefit, will stay on them for the rest of their lives, assumptions are made about welfare costs that are completely biased and unrealistic. The financial and moral panic engendered by threats of ‘welfare blowouts’ will just keep on rolling on.

While it is true that in each section of the report a number of possible options for reform are offered, they mostly tend to be within this overall framework.

And some of the choices presented are downright terrifying.

For example, in a section headed ‘strong signals to discourage semi permanent use of the benefit system’, the alternatives given are:

  1. Limited work for the dole – requiring people to work a given number of hours per week in return for their benefit;
  2. Income management of payments – similar, I presume, to the Northern Territory system, where the State retains control over how people spend at least some of their weekly income;
  3. Withdrawing some parts of a person’s benefit if they stay on it for more than a year; and/or
  4. Withdrawal of a benefit altogether if a person stays on it for more than 5 consecutive years.

While these are presented as choices, in fact all these options are undesirable if one believes in a fair and compassionate welfare system, as some of us still do.

There are many other little shockers littering the report, for example a suggestion that no person under 18 should be eligible for any benefit at all, and proposals that people on the DPB should be ready to enter the paid workforce from the time their youngest child is three years, or one year old.

A kite is even flown suggesting that sole parents go out to work from the time their oldest child reaches a certain age, regardless of the ages of subsequent children, in a bid to discourage those vexed beneficiaries from breeding – social engineering with bells on.

Another bright idea is that money now spent on supplementary third tier assistance should go to community groups to provide savings and insurance schemes for beneficiaries.

Notions like this reinforce my sense that the members of this Government appointed body have little notion of what life is really like for people on benefits.

They are truly away with the fairies if they think people on benefits – with access to even less discretionary help than they get now – would be in a position to comfortably start up savings accounts, much less pay for insurance, no matter how well intentioned the contracted NGO provider.

But I think the big, hard news in this report is that while there are a whole range of good, bad and indifferent suggestions for change within its substantial 125 pages, its ultimate direction is pretty much preordained.

I predict that the final report is likely to include recommendations that:

  • Most working age beneficiaries – unemployed, sick, invalids, sole parent – will be placed in one work-tested benefit category.
  • A small, residual number of people will be entitled to a form of ‘incapacity’ benefit, non work-tested, and paid at a higher rate than the rest.
  • Further work testing requirements will be expected of sole parents; and a tighter series of sanctions and harassments will be applied to all work tested beneficiaries.
  • Government will be encouraged to employ an insurance model of risk assessment in its calculation of costs/benefits, and use this to keep up the pressure to push people out of the system, even when they have nowhere else to go.

Yes, we do need major welfare reform in this country.

But if we head down the path I fear Paula Rebstock, Paula Bennett and John Key are taking us, the 1991 benefit cuts will look like a picnic in comparison.

Comments (25)

by Draco T Bastard on November 24, 2010
Draco T Bastard

And not a single mention of the only viable welfare system - A universal income paid to every man, woman and child.

by Mark Wilson on November 24, 2010
Mark Wilson

"It could make the 1991 benefit cuts look like a picnic"

Hope so.

by Danyl Mclauchlan on November 24, 2010
Danyl Mclauchlan

We won't see 'radical changes' or 'major reform' - we're talking about Key and English here. So significant changes like an insurance based model or move to a single benefit are out of the question. I predict extensive tinkering with the current model - more work testing, sanctions, etc - dressed up as 'major reform'.

by Sue Bradford on November 24, 2010
Sue Bradford

Thanks for the early feedback.  Draco, I'd better just correct your misapprehension re the Universal Basic Income - the WWG report does mention the 'Guaranteed Minimum Income' but gives it little attention, saying 'The cost means that this option is unlikely to be viable.'... and that 'it is not well targeted...' (which of course is the whole point of universality).

Don't think we're going to get any progress on UBI from this lot, but that doesn't mean we shouldn't keep exploring the option.

by Ken Crawford on November 24, 2010
Ken Crawford

Is this "Mark Wilson" commentator simply trying to be shocking, or is he truly the unpleasant person that he seems?

by Brendon Mills on November 25, 2010
Brendon Mills

I would just love to know what happens when the time limit runs out....go live under a bridge I guess.

All these proposed reforms will do is create fear and insecurity across the board, and probably have the effect of lowering/holding down wages and conditions.

A nation can never be truly propserous while the poor, and vulnerable are sleeping in its streets.

In the meanwhile, John Whitehead, a man who will never worry about retirement with a gold plated pension topped up with lucrative consultancy work again calls for national super to be cut, shrunk, or generally just made less generous. He seems to forget that in this country we have one of the lowest poverty rates among senior citizen, and he may seeth at it, but I am rather proud of it. Every elderly person is entitled to some form of dignity and security in retirement, and to throw them under a bus for the sale of cutting taxes for the rich needs to be opposed by all mean possible.

by Brendon Mills on November 25, 2010
Brendon Mills

And Sue, I gotta be honest here, you left parliament too early, even though I accept you had your reasons.

Parliament needs someone who belives that the powerless always needs some form of protections from those who have power, and that freedom for the wolves, only mean fear for the sheep.

by Draco T Bastard on November 25, 2010
Draco T Bastard

<blockquote>I'd better just correct your misapprehension...</blockquote>

heh, that's what you get for relying on the MSM for information.

<blockquote>Don't think we're going to get any progress on UBI from this lot, but that doesn't mean we shouldn't keep exploring the option.</blockquote>

Not from this lot as they work on peoples fear of not having enough to lower wages. We will have to continue discussion on it especially if we keep the market model of the economy as it ensures that minimum living costs are met which the present system doesn't.

<blockquote>All these proposed reforms will do is create fear and insecurity across the board, and probably have the effect of lowering/holding down wages and conditions.</blockquote>

Which is what John Key promised.


by Mark Wilson on November 25, 2010
Mark Wilson

And who pays for the "universal income" and why would anyone bother to work?

It's so easy to work out how to spend the money - why does Bradford never bother to work out how to pay for this largess - talk about dishonest.

by Andin on November 25, 2010

And who pays for the "universal income" and why would anyone bother to work?

You thought that up all on your own? Well done. You sir, are obviously not doing enough "work".

Now please excuse me. I must just go and pop on my slippers, I have a small soiree planned for this evening. Oh the joys of the idle poor are multi faceted.

by Mark Wilson on November 25, 2010
Mark Wilson

Notice you avoided answering the question just as Bradford does. How is it paid for?

by tussock on November 25, 2010

Re: UBI.

$500/wk is rather more than $200/wk, when it comes to the willingness of people to labour (ignoring all those volunteers who already find their chores fulfilling).

Even if you stack a fully funded 4-child family into the figures, it's quite a bit of a stretch to say minimum wage wouldn't be desirable. $1000 still beats $700 rather handily. Should people be on a decent wage, giving up $600/wk just to sit about all day doing nothing seems even less likely.

Actual benefits may well be set lower than that too, if one wished to be cruel about it. The costs are fairly trivially met too, just set the taxes such that working folk end up with the same in their pockets, replace the mid-income family tax credits with the UBI, replace the low-income assistance packages with the UBI, charge the rich folk enough extra tax to cover what you pay them. Simple, and probably much less govt bookkeeping than now. Even works well with a flat tax rate.

by Andin on November 25, 2010

"Notice you avoided answering the question"

You failed to notice you had asked two questions. One of which cannot be reduced to 1+1=2, so its hardly surprising.

Who pays? such a loaded question. And it denies a lot of cover for ideologues appealing to what remains of a tribal survivalist instinct, when a bogeyman is conjured up.

And "why would anyone work?" Why does anyone work? why should people work? what is work? Is it defined by a purely labour/reward basis?

Oh Please dont tempt me anymore......

by stuart munro on November 25, 2010
stuart munro

@ Mark

Actually, with foreign speculators presently driving the $NZ to inappropriate levels, we could for a time print money to fund the UBI. Which would correct our exchange rate as well as stimulate the economy. It's win/win - except for the speculators of course.

by Mark Wilson on November 25, 2010
Mark Wilson

What happens now that there are not enough people working to carry everyone? It used to be 7 workers for 1 parasite - now its 2 to 1. Its over so what now?

by Andin on November 25, 2010

7 workers for 1 parasite

Those royal's had it good, No Doubt.

Those prejudices just keep rolling to the surface unaided.


by Mark Wilson on November 25, 2010
Mark Wilson

And of course the reason why no one answers who is going to pay is because they can't.


by Andin on November 26, 2010

Not cant Mark, just cant be bothered with you. Because you are asking a question that is farcical. You know what ever is decided, it will come from the tax intake.

Now it seems you want to control who gets what from that take, so no answer is going to get your approval. And those monies is always going to be too good when it comes to paying "parasites" as you so delicately put it. IYO.

You need to go away somewhere and do a bit of work on upgrading your outlook on life. And in particular the light in which you regard the many other human beings who occupy this planet with you.

That could take some time so I dont expect to see any comments from you for a while. Cheery-bye

by Mark Wilson on November 26, 2010
Mark Wilson

Andin - you therefore support less and less assistance to those in need. Because the welfare system is unsustainable financially as the Welfare Taskforce shows. Doing nothing is not an option as it has been in the past. So the poor and needy (not necessarily the same thing) will get less and less help because people like you won't deal with reality.

by Andin on November 26, 2010

people like you won't deal with reality.

Thats funny, cause I have to deal with reality each and every day. Your just sounding like a cock now.

unsustainable financially as the Welfare Taskforce shows.

Dont you listen or read the figures they quote have been fisked half way to 2200.

by Mark Wilson on November 26, 2010
Mark Wilson

Andin -Doh Homer!

I accept that as a lefty you will be slow when money is being discussed but do try to keep up!

The point is the support is no longer there from the community to keep so many people on benefits.

And the attitude of people like Draco is why.

"And not a single mention of the only viable welfare system - A universal income paid to every man, woman and child."

No doubt he still believes in Santa.

So the money will not be made available - look at the general support there has been in the last few days for time limited dole. 

Sorry Homer - you time is up!


by DeepRed on November 26, 2010

Programmes such as the welfare reformists' poster boy Wisconsin Works have, in practice, proven far more expensive to administer than its proponents care to admit.

And surprise, surprise... another myth busted.

Welcome to Forbes-Coates 2.0.

by Andin on November 27, 2010

Tripping over yourself with glee there Mr Wilson, when you think you can stick the boot in. How very indicative of the minds that are small.

The point is the support is no longer there from the community to keep so many people on benefits.

The loaded language gives you away here as well.

"so many people" so you havent seen the actual break down of the figures.

"support from the community" Oh right!

You having fun whipping yourself into a frenzy there Mark or is it Chief Wiggun?

by Brian smith on November 30, 2010
Brian smith

@ Mark Wilson

So you support the recommendations of the WWG to finally end this dastardly problem of welfare dependancy and it's cost to the taxpayer. Do you also support the government bailouts of Equitable Mortgages (Spencer family company)-$178m, Hubbards SCF - $2billion. I didn't choose to give my money to these outfits along with most other NZ'ers but this Retail deposit Guarantee Scheme has already cost the taxpayer $1.8 billion and is likely to far exceed $2 billion. You no doubt follow the neo-liberal philosophy of personal responsibility and individualism so why then, should NZ'ers collectively carry the can for individual invester losses. You don't like socialism but are happy with the socialisation of capitalist losses. The neo-liberalist's hypocracy.

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