Friday, March 02, 2007



A small move, but a good one

The government is introducing a "transition to work" subsidy of up to $1500 to help beneficiaries and low-income earners move into work. It's a small move, but a good one. Moving from a benefit into work costs money - you need work clothes, and face increased costs for transport, food, and childcare - and this will help cover it and make it easier. If the aim is to get people off benefits permanently (insofar as that is possible in today's casualised employment market), then it is worth spending some money to do it.

At the same time, there is more the government could do. Currently, taking employment is a risk for those on a benefit - if it doesn't work out, you may face a stand-down period at the other end in which you will have no income. Making it easier to restart payments if a job ends will reduce that risk. Helping people who are willing move in pursuit of work, and raising the heavily eroded income test thresholds for working on a benefit would also help. But above all, they need to continue the push to raise wages. If the government wants people to get jobs, then the least it can do is ensure that they pay well, rather than leaving people worse off than they were before.

9 comments:

It's a small move, but a stupid one - unless you generalise it more.

Why only give those transitioning to a job from a benefit the payment? Why not those from University / Tech / Overseas / et al? Costs the same money for those as well. Or would you prefer to see these lapse in benefit status?

And every argument you pose is even worse for someone starting their SME - but of course those idiots should just think better than to try and improve themselves and others?

Posted by Unknown : 3/02/2007 02:57:00 PM

The argument that if you can't help everyone, then you shouldn't help anyone is not likely to convince many liberal-minded persons.

I, like many of my generation in New Zealand, watched the TV show Mash when growing up, and learned all about the concept of triage. It is possible to help the most needy, and have them benefit, without helping the slightly less needy (or equally needy but not at the front of the line). It's clearly not optimal, but that doesn't automatically make it bad.

Posted by Matt : 3/02/2007 04:26:00 PM

having been on the dole, this idea would have won my support back then.

getting money together when you start work is actually harder because you need to get up to speed with all the things your workmates take for granted. as i/s points out, it's things like a wardrobe of work clothes.

the financial hurdle of starting work is actually pretty high.

and iiq. who says that students are too poor to pay their own costs? plenty of them have parents who'd be willing to help their son/daughter get that first business suits.

Posted by Anonymous : 3/02/2007 04:54:00 PM

I would point out that a Universal Basic Income would solve this problem. People starting a job would still receive their UBI in full - they would simply pay more income tax as their earnings increased.

Posted by Rich : 3/02/2007 04:59:00 PM

che,

and many have parents who are able to help them get business suits but would rather have their eyes poked out.

Thus creating the second poorest segment of NZ society.

the poorest is the married student with dependant who isn't eligable for anything but has a low wage job.

---------

As to the money for transition into work - I thought you could already get that?
maybe previously it was a 'loan'?

GNZ

Posted by Anonymous : 3/02/2007 05:51:00 PM

A Transition to Work Allowance was introduced in 1986, to guarantee that those on benefit for more than 12 months who entered full-time employment were at least $20 a week better off. The allowance was tax-free and the maximum payable was $40 a week, for a maximum period of 13 weeks. TWA was withdrawn in 1996 and incorporated into the Special Needs Grants scheme.

Posted by Anonymous : 3/02/2007 08:05:00 PM

A system where people who had just taken-up a job could do it for a trial period (a maximum of two months), then quit without the stand-down period would be a good protection, if for whatever reason the job didn't work out. It would be good to extend a similar protection to employers as well....

Posted by Anonymous : 3/04/2007 10:11:00 AM

You seem to be saying it is now the government's role to push wages up. Is this now calling for a return to national awards, or more pro-union legislation to increase the power of unions?

If wages rise faster then inflation rises faster and eats away the increase. A bit self defeating.

Posted by Anonymous : 3/11/2007 01:32:00 AM

rich "I would point out that a Universal Basic Income would solve this problem. "

The whole UBI concept generates far more problems overall - including the high taxation rates.

Posted by Anonymous : 3/11/2007 01:33:00 AM