Welfare's "future focus" looks pretty fuzzy

Social development minister Paula Bennett promises a benefit reform that brings “an unrelenting focus on work”. But just how sharp is that focus going to be?

Promising to tighten the screws on welfare bludgers is the stuff that gets chat radio humming, but actually doing it is much more difficult, particularly when unemployment is still on the rise in an economy that is tottering out of a recession.

Labour talked the talk back in 2006, when the good times were still rolling and the government had a surplus. Remember David Benson Pope’s “Working New Zealand: Work-Focused Support” and his promise it would set “strong work expectations for clients.”?

Labour’s new approach saw the number of sickness and invalid beneficiaries grow as unemployment came down and “work-focused support” increased. Then Labour started blurring the picture by eliminating distinctive, specific benefit labeling with the all-embracing term “income support”, and broadening the constituency of beneficiaries with the introduction of “Working for Families” support instead of income tax relief.

That was when National’s campaign talk started to sound much more convincing to those hard-working New Zealanders tired of paying high taxes to keep the so-called “life-style” beneficiaries on the public payroll.

John Key hit the right note for them when he spoke of “genuine support for people in need” and “an unrelenting focus on work” for anyone else, and a new system that would “challenge people, not treat them as passive recipients of benefits”, and a new focus on “what people can do, not what they can’t do.”

Key, the son of a widow, handed the mission of creating the new system on to Paula Bennett, a solo mum who knew what life on a Domestic Purposes Benefit meant. So, now we get “Future Focus” – the welfare policy for a recovering economy before the recovery produces more jobs than people seeking them.

Labour’s initial attack on “Future Focus” was based on the Attorney General’s finding that elements of the reform were inconsistent with Bill of Rights. Annette King led the charge in Question Time and ended up in the brambles.

King’s questions advanced two main arguments. First, the government had ignored the advice from its Attorney General Chris Finlayson. By imposing part-time work tests on certain benefits but not on others – the widows and women alone benefits – the “Future Focus” legislation would discriminate on three prohibited grounds: sex, marital status, and family status. Further, Bennett and Key had tried to cover up the Attorney General’s criticism by not disclosing it until the day after their announcement of the reform.

King’s problem was that the benefit policies she supported in government had also contained the same kind of discriminatory components, and Bennett was quick to turn the issue back on Labour’s deputy leader. By objecting to what the government was doing now, King must be arguing for the elimination of the added protection that was being offered to two particularly vulnerable groups of women, and against a policy that she had supported in government.

Bennett missed a home run with her response to King’s “cover up” charge. She answered that she was not responsible for when the Attorney General puts his papers to Parliament. Correct, but she could also have pointed out to King that Cabinet papers, released when “Future Focus” was announced, contained specific references to the Bill of Rights issues that were raised a day later in the Attorney General’s report to Parliament.

Perhaps Bennett did not want to draw too much attention to the other sections of the paper, a report to the Cabinet Social Policy Committee. For example, it has this to say about the impact on children when an errant solo parent is put on short rations, or has benefit payments suspended or cancelled for failing to meet work test obligations.

“The sanctions process, even with the minimum 50% benefit payment, could also affect the wellbeing of the dependent children. It should be recognised, however, that parents will have many opportunities to comply and restore benefit payment and that there will still be access to supplementary assistance such as Accommodation Supplement.”

There is obviously going to be plenty of scope for interpretation here by the busy case officers at Work and Income New Zealand [WINZ], when it comes to determining if there is suitable work available, the beneficiary has been trying hard enough, and if there are considerations other than that “unrelenting focus on work” to be taken into account.

It is small wonder that the Regulatory Impact Statement on “Future Focus” is vague on the matter of the number of beneficiaries who will be encouraged to get back to part-time or full-time employment by the new legislation.

There is no research currently available which accurately quantifies the size of the behavioural response from these changes in policies… The inability to determine firm numbers of people shifting from benefit to work as a result of these changes is due to the difficulty of separating out the effect of the policy changes from the effect of changes in other influences such as economic and labour market settings (e.g. employment growth, minimum wage increases). Some broad estimates of magnitude can be made based on previous experiences of similar policy changes..”

Of course, there will be plenty of job creation at WINZ, at the Ministry of Social Development to monitor what’s happened, and among the medical consultants required to carry out the additional fitness for work assessments being introduced to determine the ability of sickness and invalid beneficiaries to return to part-time work. But is this really productive employment growth?

Just wait till the chat-back crew works that out.