The 2018 Social Security Act suggests that Labour may have retreated to the minimalist (neo-liberal) welfare state which has developed out of the Richardson-Shipley ‘redesign’.
One wonders what Michael Joseph Savage, Peter Fraser and Walter Nash would have thought of the Social Security Act passed by the Ardern Labour Government in 2018. Its principles were set out as
Every person performing or exercising a duty, function, or power under this Act must have regard to the following general principles:
(a) work in paid employment offers the best opportunity for people to achieve social and economic well-being:
(b) the priority for people of working age should be to find and retain work:
(c) people for whom work may not currently be an appropriate outcome should be assisted to prepare for work in the future and develop employment-focused skills:
(d) people for whom work is not appropriate should be supported in accordance with this Act.
This has a quite different focus from the act Labour passed in 1938 which began:
An act to provide for the payment of superannuation benefits and of other benefits designed to safeguard the people of New Zealand from disabilities arising from age, sickness, widowhood, orphanhood, unemployment, or other exceptional conditions; (I have omitted the provisions for healthcare).
There is a redirection in the purpose of the system described by the 2018 Act from safeguarding those with disability to prioritising paid work as the social norm.
Eighty years ago, statutes did not include general principles. The 1972 (McCarthy) Royal Commission on Social Security codified the principles of the existing social security system, the first of which was:
The community is responsible for giving dependent people a standard of living consistent with human dignity and approaching that enjoyed by the majority, irrespective of the cause of dependency. We believe, further, that the community responsibility should be discharged in a way which does not stifle personal initiative, nor unduly hinder anyone trying to preserve or even enhance living standards on retirement or during times of temporary disability.
I can find no such sentiment in the 2018 Act, which is in many ways a manual for those administering a very different system. (It is over five times as long as the 1938 Act which also covered retirement and health benefits.)
Admittedly things have changed since the 1972 Royal Commission, including higher evident unemployment and women are more likely to be in the paid workforce. (The changes are detailed in my Not in Narrow Seas, Chapter 39.) However, that is not a justification for abandoning the principles which Savage, Fraser and Nash would have applauded. Rather, the challenge was to apply those principles to the new circumstances.
Governments since the 1972 Royal Commission have largely abandoned the challenge. Indeed the Richardson-Shipley ‘redesign of the welfare state’ replaced the 1938 approach with a minimalist neoliberal one of an American-style welfare state instead of the more European social democratic approach which the Royal Commission accepted and where once New Zealand led the world as Lord Beveridge (of the British Beveridge Report – the foundation of their welfare state) once acknowledged.
And so the prioritisation of work as the foundation of social security followed. It was the Clark-Cullen Labour Government which introduced the work focus into the Social Security Act in 2007. It was applied by Minister Paula Bennett under the Key-English National Government.
The 2018 Act itself was enacted by a Labour Government (minister Carmel Sepoloni) in effect endorsing the 1990 redesign of the welfare state and abandoning the system which Labour was once so proud. Yes, the Ardern-Hipkins Government administered the system more generously and fiddled around at its edges but it adopted the underlying framework, just as in 1949 the first Holland-Holyoake National Government adopted the preceding Labour Government’s 1938 framework. (When the statute was being passed in 1938, Sid Holland had described it as ‘applied lunacy’ responding to Savage’s ‘applied Christianity’ – I suppose Christianity is out of fashion today.)
So the Arden-Hipkins Government and its advisers accepted the neo-liberal framework. Was that by default because they had no alternative? One acknowledges that their proposed Social Unemployment Insurance scheme was a more European-style approach to welfare. Its critics included advisers to Labour’s social welfare minister and it was abandoned by the Hipkins ‘policy bonfire’ of February 2023. (My objection was that it was poorly articulated with the existing social security system; a proper articulation would have shifted the system away from the minimalist welfare state approach. I was told those implementing the scheme thought the challenge of the integration was too great.)
This is but one example of the reluctance of the Ardern-Hipkins Labour Government to challenge the neoliberal framework it inherited (although it did in some areas). Given that the 1938 Social Security Act is usually seen as one of the greatest achievements by any New Zealand Labour Government, the reluctance illustrates how far Labour has shifted in the eighty-odd years. Savage, Fraser, Nash and a host of their colleagues must be wondering what has gone on.