Tuesday, August 10, 2010

Destroying the welfare state

In the past week the government has released major reports on both the welfare and state housing systems, and promised to "kick the tyres" (Nationalspeak for charging full-speed ahead) of both. But these aren't minor changes or just the usual National Party poor-hating shitiness in these reports. Instead, they're basically recommending the destruction of our welfare state.

On welfare, the key recommendation is to shift to an insurance-based model for unemployment and illness. This shifts responsibility from the government to employers and individuals with little benefit to either - what you previously paid in taxes, you now pay in insurance premiums (plus a bit extra for the provider's profit margin, of course). But it comes with a nasty kick: if you're uninsured, or your insurance isn't high enough, or it runs out, you get left to starve. The only winners are insurance companies, who get a guaranteed risk-free revenue stream, and government Ministers, who get to wash their hands of responsibility for a core social problem. Everyone else - which means pretty much everyone in New Zealand - loses, both financially and in terms of being far more exposed to risk.

On housing, National basically wants to get out of the state-housing business and dump the responsibility on local authorities (who are trying to do the same) and the "community sector" (who don't actually have any houses). As for whether this arrangement will better meet our needs, they don't seem to care - the primary goal here is to remove the responsibility, not actually reduce homelessness. Why would they want to do that? Because every couple of days, the Minister has to stand up in Parliament and face questions about waiting lists, state houses standing empty, others being overcrowded or leaking, and people in dire need living in garages and caravans being turned away by Housing NZ. If they reduce their role to that of a funding agency, then they are no longer responsible for such things, and those questions go away. Meanwhile, in the longer run, they can begin systematically underfunding the sector, insulated from any responsibility for the consequences of their actions - exactly as they have done with the health sector. Plus, they also get to sell off the state housing stock, producing a cash bonanza they can use to fund another round of tax cuts for the rich. Again, the winners are the rich and Ministers, and everyone else in New Zealand loses out.

There's a common thread linking these two proposals: the abandonment by the government of any responsibility for people's welfare. And the net result of the two would be the effective destruction of our welfare state. After all, if you take away housing, and you take away unemployment and sickness benefits, there's not much left. Effectively they'd be taking us back to the 1930's in terms of welfare provision. Which is a pretty radical proposition for a government which ran on a moderate, "change the faces but not the direction" platform.

But its not just a matter of electoral betrayal - as I noted yesterday, caring for the poor, the sick and the old, making sure that no-one starves and everyone has a roof over their heads are basic expectations of government in New Zealand. And if the government refuses to do these things, many of us are going to be left asking what its actually there for.