A new report raises questions about the past and future of the support that we give to those in need.

The Child Poverty Action Group has produced a report, Further Fraying of the Welfare State, describing the ongoing undermining of the welfare safety net under the Key-English National Government. It needs to be put into a context which begins before 1984 where the report starts.

Starting points always involve judgements because things happen before then. Even so, it makes sense to start with the 1972 Report of the Royal Commission on Social Security because it consolidated what had gone on in the 34 years since the introduction of the 1938 Social Security Act. There is much to admire in the report and I shall draw on that below. However, it was at the end of an era. All social policy is based upon assumptions about how society works. Critical ones which the RCSS assumed became obsolescent over the following decade. They included (in alphabetical order):

            - new and diverse family structures;

            - the Maori urban migration which shifted them from subsistence rural living to living in the urban market;

            - mothers entering the paid workforce;

            - increased social diversity;

            - higher (structural) unemployment.

Each undermined the analysis of the 1972 RCSS.

Anne Hercus, the Minister for Social Welfare in the Lange-Douglas Labour Government, wanted a new royal commission on social security to grapple with the changes, but her proposal was kidnapped by those who wanted to head off Rogernomics, extending it into a wider Royal Commission on Social Policy.

The 1988 RCSP was a disaster. Perhaps that was inevitable. Social security is based on legislation, which royal commissions review well, as the 1972 RCSS did. Social policy is a vast morass of law, practices and beliefs. The 1988 RCSP struggled to make sense of them. It was not helped by some poor decisions and weak advisors. Many people concerned with social policy have warm hearts, perhaps some understanding of a particular policy issue, but no appreciation of the broad social policy issues nor the analytic skills to bring them together. Each was eager to pursue their special interest. The consequence was that the April Report had no overall vision but lots of bits and pieces by those with warm hearts and small heads.

The objective observer might well have concluded that there was no coherent alternative to the neoliberal proposals and so the 1988 RCSP inadvertently opened the way to the 1990 Economic and Social Initiative, in which Ruth Richardson and Jenny Shipley promised to redesign the welfare state. Instructively, nobody used the 1988 RCSP report to defend against the attack; I went back to the 1972 RCSS report.

The ESI became the foundation for social policy over the next three decades. Even the Clark-Cullen Labour Government did little to reverse the underlying framework. Although it was a little more generous, its advisers were mainly neoliberals or those with warm hearts/small heads who accept the neoliberal framework without knowing it.

I draw attention to two features of the current regime by going back to the 1972 RCSP. First it set two standards for benefit levels. It said (original’s italics)

            The aims of the system, should be

            (i) First, to enable everyone to sustain life and health;

            (ii) Second, to ensure, within limitations which may be imposed by physical or other disabilities, that everyone is able to enjoy a standard of living much like that of the rest of the community, and thus is able to feel a sense of participation in and belonging to the community.

The first aim is consistent with a notion of maintaining everybody at or above an absolute level of poverty; the second defines a notion of relative poverty. The 1972 RCSS supported the second notion as the basis of society.

The ESI cut back social security benefit levels to an absolute level of poverty. (There are some good graphs in the CPAG report on page 28 which show just how vicious the cuts were.) We may argue whether they got it right – the chosen level is a bit mysterious but seems to have been based on the work of an American consultant who was so unaware of New Zealand conditions that she did not know her method had been rejected by the 1972 RCSS two decades earlier. That an absolute poverty level was the intention is evident because since 1990 it has been indexed to the consumer price index. By contrast New Zealand Superannuation is indexed to wages, so the elderly share in the rising prosperity.

Had I space I would explain the relationship between poverty lines and inequality. (Another day, except to say it is more complicated than the warm hearts/small heads say.) But at the heart of the change was separating out the deserving from the undeserving poor and treating the latter very badly. The distinction would be an anathema to the 1972 RCSS and leftish governments before 1984.

The CPAG report illustrates the distinction between the poor who are in the paid labour force are treated differently and those who are not. Recall that the Clark-Cullen Government consolidated the principle in the Working For Families scheme in which only those in a certain amount of paid work were given support. (The practice had been introduced earlier by the Bolger-Birch National Government and seems to have been copied from the US.) The report describes how under the Key-English Government the principle of driving beneficiaries into the paid labour force intensified.

The 1972 RCSS would have been perplexed. Had it argued to a group of National-aligned matrons in the 1970s that mothers of young children should be forced to go into paid work it would have been howled down. Times and circumstances change; the matrons of the 2010s seem to take exactly the opposite approach if the approach of their government is any indication.

Does it make sense to socially value paid work while ignoring unpaid work such as caring of children? Anyone who thinks that caring for children is not a demanding form of work has never had any children or left the stress to their wives or hired someone else to do it (the outsourcing adding to GDP but not to total work activity). Pretending it is not socially valuable is foolish – and generates a society which has serious embedded poverty.

Patterns of child rearing have got more complicated since 1972 but the fact is that children still require care; at some times and in some circumstances it can be very demanding, at others less so. How social policy responds to that efficiently and fairly is a challenge which requires a lot of careful analysis. The CPAG report illustrates that we currently do it badly.

Lined up today outside ministers’ doors are many of the warm hearted/small headed. It is doubtful any have the skills to offer the comprehensive analytic vision we need to get out of the muddle. But let me not finish with the pessimistic thought that the current Labour Government may end up, like its predecessor, with merely a slightly more generous version of a neoliberal framework.

The precipitant may be the poverty-reduction target legislation. It is easy to be warm with fuzzy thoughts about it, but cool analytic thinking leads one to conclude that if a government wants to succeed with the target they will be making numerous ad hoc, expensive and inefficient incremental changes, out of which may evolve an alternative vision more in keeping with the principles set out by the First Labour Government and the 1972 RCSS, albeit adapted for changing social circumstances. Perhaps in 34 years’ time – 2042 – another royal commission will review what has evolved and be able to commend it.


Comments (6)

by Sue Bradford on March 08, 2018
Sue Bradford

Kia ora Brian for putting the most recent CPAG report 'Further fraying of the welfare state' into clear historical perspective.  I'm not sure exactly whom you mean when you talk about well-meaning types with 'warm hearts and small heads', but I hope it's not a number of the people and groups who put a lot of work into submissions to the Royal Commission of Social Policy in 1987-1988 and who did have an analysis that went well beyond accepting the neoliberal capitalist approach being enacted so fast and furiously at that time.  The fact that the wide reaching submissions of our unemployed workers' groups & others were completely ignored is down to the political powerholders of that time, Phil Goff and others, whose legacy lives on in Labour today.

I realise there are many people at the moment who believe, or are simply daring to hope, that this new Labour/NZF/Green government will initiate the major reforms needed in welfare.  However, on present evidence your 'pessimistic thought' that Labour may come up with only a slightly more smiley, friendly version of the same neoliberal welfare system is all too likely to come true.

There is no sign of any will from Carmel Sepuloni & her colleagues to overturn National's punitive reforms of the last nine years, much less to turn the tide on Labour's own momentous decision in the 2000s to make paid work the goal of social security, rather than return to the kind of safety net envisaged - and enacted - by their 1930s predecessors.  Even promises to end the toxic culture at Work & Income offices and to to lift the punitive sanctions against mothers who can't or won't name the father of their child seem to be on the backburner.   

Sadly, I don't think fine words and legislation for poverty-reduction will change any of this.  Any real desire to go back to those 1972 goals - lifting benefits levels and ensuring everyone has a decent chance at full participation in society - seems as distant as ever.  I would love to be proved wrong.  



by on March 08, 2018

On the contrary. There must be a culture of promoting talent. And I note one of Carmel Sepuloni first meetings was with social workers at the coal face, whether this translate into a culture of promoting talent only time will tell. Over 2 years MSD will transform or die in draconian committees reading from little PH.D. books. Once analytical and accurate individuals are pulled through the system, they will appreciate there position in the system, and that it is there role to maintain the integrity of the system. Otherwise tax payers will speak against the salaries of untalented social workers.

by Charlie on March 09, 2018

In the long term we cannot afford a welfare system that promotes intergenerational failure. The 'warm heart & small minds' (great phrase!) need to realise there is a international wolf at the door against which we need to remain competitive.

In some instances that "welfare safety net" has become a matress.



by on March 09, 2018

IQ tests have been used by the system for a hundreds years to identify the deserving poor who could be streamed into government jobs in say like police officers and so forth or even skills training programmes, to move people from the underclass to at least the working class and above so every ones got a fucken stake in this. The system wants to find people and the system wants to sort them properly and they want to do some good when they're not trying to steal Māori land let's say, which is often called civilising behaviour. But the terrible thing is less than 10% of all recruits make it into the police force so there is not a dam thing the system can do for these people, around 100k-200k New Zealanders who live in persistent poverty.

So we've got this enterprise desperately looking for people and drag them up into working class and the police conclude that more than 10% of all recruits can not be sufficiently trained and move them up into working class. And like I say not only are these guys not going to find a stable job they are not going to be able to find a liveable wage especially now that service jobs now require a fair high degree of computational skills or the ability to have a high degree of interaction with computational technology. Even a till at McDonald's is often far beyond the abilities of those at the lower end of intelligence distribution.

An intelligence researcher by the name of Earl Hunt claims of you have an IQ below 90 that its difficult for you to read well enough to translate what you read into action. So you can't actually read well enough and follow instructions because they don't have that level of literacy.

So this bottom 10% translates into about fourth five thousand New Zealanders including about fifteen thousand children all through the education system. Given that the population is rising this trend can only magnify the problem with an untalented system.

I started my life as a Chef so I'v come across many of these below 95 IQ distributions and at the top of the distribution and it highlights the incredibly dismal facts about the range of possible outcomes the system produces. Some needed help opening up a bank account, some needed help with there pregnancy and they basically make people feel sorry for them in order to survive and that's the harsh truth of understanding what every day life is like if you have an IQ of 80-94. They make there way independently in the world but everything is a challenge.

I had an employee with an IQ of about under 80, the non verbal part of it. He was indistinguishable with let's say a normie. But there's nothing mark to mouth about the particularly intellectually impaired. It took me about 30 hours to train him up with sufficient procession to be able to wheeled a chefs knife so that the food stuff wouldn't get so mangled in the cooking process. And there was high performance demands on him too, he had to whip through prep work quickly. And some times carrots grow in twins so then he had to calculate how to that to fit into the automatic chip maker and like this level of complexity just did him in. So I had to get the nozzle custom built so he could just slam it in there.

Ordinarily if leadership was united we wouldn't be having this debate because the welfare system should be managed by a competent workforce. We all know that every beneficiary means $50 thousand fucken dollars for somebody. And the struggle has since been about the struggle of the dispossessed to have the means to a better life.

by Charlie on March 10, 2018

Sam, you've clearly been there. What you talk about is harsh reality.

Scratching beneath the surface, what's creating these broken, hopeless people?

I refuse to accept that certain groups have inherently low IQ. There is lots of evidence to show that IQ is largely a function of nutrition, parenting and education. I recall the Youth Court claiming it can predict criminality with a 98% accuracy based on birth circumstances alone. So by the time you get them as kitchen hands, the damage is mostly done. It may have already been done before they start school.

What we are talking about is:

> Extreme parental neglect

> Physical and mental abuse

> Fetal alcohol syndrome

> Addiction

As long as our welfare system is providing cash for babies, this problem will not go away.


by on March 10, 2018

To me everything is an engineering challenge but that is not how politicking is done. When people begin to work they start to say what they really think, telling friends, family and every one else what they really want and need. When something is left undone they will act to correct it. Then workers of all kinds begin to find new and subtle ways of correcting wrongs. Once past this youthful exuberance workers will then be able to move past the failures of life because they will no longer be compounded by bitterness and deceit. The moment workers are made redundant is the moment they'll vote for the first party promising jobs. Once you are able to bring peace to your family and friends you will then be in a position to lead the community, and then a city or a nation once peace has stepped up a level.

On the other hand one could be seeking to bring down the status quo, the tyrants Hitler, Stalin and Mao are perhaps it's greatest proponents and where brutality defeated. Those that seek to otherise people and aim down hard by focusing on the wrongs with half the skill of the original tyrants can only know brutal defeat.

We can quantify and measure things but there must be something else going on. Something deeper. So if one mother is cruel to her three children, and those children are cruel to there children and we let that grow exponentially over 10 generations humanity would end up with up with 10 billion people and we are not at the point yet, so there must be something else going on that brakes the cycle of misery and abuse. And in my honest opinion that process of death decay and rejuvenation & renewal is worth state investment.

So business people make good managers who run things efficiently because they are conservative and do not typically say what they mean. That's not very good for creativity so you don't see many conservative entrepreneurs. But we need the too disciplines to come back closer together. Whether we move back to a point when finance droVe innovation and entrepreneurship, or let the Crown continue its jobs programmes seems obvious to me. The coalition government put there welfare and jobs programme to the vote and succeeded. Now it is time to pick a side or face defeated.

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