Friday, December 10, 2010

The Alternative Welfare Working Group

Yesterday, the Alternative Welfare Working Group released their report. One of their core recommendations was that benefits be immediately raised to their pre-1991 levels, and then pegged to the average wage. The reason? Because they are currently insufficient to cover basic needs.

This is quite deliberate. As explained in Alister Barry's In a Land of Plenty [part 5, from 10 mins, to part 6] experts worked out minimum food budgets for beneficiaries based on nutritional needs and different expectations of diet. Ruth Richardson took the lowest level - which was inadequate to meet basic nutritional needs - and cut it by 20% to provide an "incentive". While the amounts have been inflation adjusted since the cuts, they "temporary belt-tightening" has never been relaxed. And the result, as anyone who has ever been on a benefit knows, is that there just is not enough money to cover the essentials. If something breaks, or you need new clothes, or there is an unexpected bill, you're screwed. This is why we have people slowly starving on benefits. And its why beneficiaries owe WINZ half a billion dollars in emergency support loans.

Restoring benefit levels to an adequate level is about simple, basic decency. We live in a rich society. No-one in New Zealand should be living in poverty, let alone starving. No-one should be forced to send their kids to school without breakfast, or without shoes, or not participate in society, or forgo basic medical care, or live in a garage. Preventing these indignities is why we have a welfare system.

Unfortunately, decency is in short supply on the right. They're quite happy to look the other way on other people's suffering, and they lack the basic imagination (or in Paula Bennett's case, the recollection) to ever consider that they could end up in such circumstances, or that their privileged lives could have turned out differently. For them, there's a second argument, and that is that tolerating poverty imposes a very high cost on society. Children who grow up in poverty - and most children whose parents are on benefits do - have higher lifetime health and social services costs and worse educational and employment outcomes. This is estimated to cost us 4% of GDP, or around $6 billion a year. A rational person would invest to reduce that cost. The question is, are our local right rational? Or merely vicious, selfish and stupid?

There's a lot of other good recommendations in the report [PDF]: simplifying the benefit system to a single rate with additional allowances, focusing on providing full employment, more training and education opportunities for those temporarily out of work, and greater recognition of the value of unpaid work (e.g. parenting) done by beneficiaries. In the longer term, they want to see work done on a Universal Basic Income, which would effectively make the entire welfare system redundant. I'd like to see all of these proposals adopted. The question is whether the government will listen, or continue to pursue failed policies which drive people deeper into hardship.