The Welfare Working Group

The Welfare Working Group, led by former Commerce Commissioner Paula Rebstock has reported. You can read the full report here.

We don't have time to do a semi-decent analysis of the report before we board our flight, but this piece of the Executive Summary caught our eye. It shows just what a Herculian task ANY government has when the tentacles of welfare dependancy are so far-reaching:

We heard in our discussions that this support was clearly needed in 2008 when the New Zealand economy was hit by a global financial crisis. Some New Zealanders lost their jobs or were unable to find work and certainly the benefit system supported many New Zealanders to get back on their feet.

But there is also evidence that many people who entered the benefit system as a result of the last recession have found it difficult to escape, and may go on to spend many years out of work. It is this group that is of most concern.

This phenomenon, of many people entering the benefit system and remaining there for long periods has become increasingly prevalent in New Zealand.

In 2008, just prior to the recent recession, and after a decade of economic growth, roughly 10 percent of the working age population, or around 286,000 people, were receiving a benefit. At that time, about one in five of New Zealand’s children were living in benefit dependent families.

At the same time, roughly 170,000 people had been on a benefit for at least 5 out of the last 10 years. That is the equivalent of the cities of Dunedin and Invercargill combined.

The Welfare Working Group has heard wide-ranging and concerning evidence about the destructive effects of being long term on a benefit. One of these effects is persistent low incomes and poverty, particularly among children. We have also been presented with considerable evidence that being on a benefit and out of paid work has adverse effects on people’s health, and have heard many personal stories of the isolation and psychological distress of being out of work.

We have come to the view that the scale and consequences of long-term benefit receipt are deeply concerning and that the system is not achieving what New Zealanders could reasonably expect. It is not sustainable, it does not provide equal and fair opportunities for those people on different benefit types and it is associated with poor social outcomes.

This paper is the result of the first phase of our work. It examines the issues that currently beset our benefit system and why they must be addressed.

Paula Rebstock
Chair of the Welfare Working Group

Paula Rebstock is dead right in one thing. These are problems which MUST be addressed, and soon. Of course taking action is another matter altogether. We can but hope that this report will at least be fairly reported and keenly debated, because New Zealand cannot sustain for much longer.