19 July 2013

Welfare, poverty and politics

Data-sharing between MSD and IRD has exposed 3,139 welfare beneficiaries who were earning more than they were reporting to WINZ, and whose benefits have been cancelled. Putting this in perspective, out of a total of just under 310,000, this is about 1 percent of working-age beneficiaries who have been found cheating the system. The government is also cracking down on beneficiaries who test positive for drugs and those who have outstanding arrest-warrants. I suspect that the actual numbers of these are also relatively small. The intense publicity around these punitive measures tends to damn the whole population of beneficiaries with the transgressions of small minorities of them; but it is politically convenient for the National-led government to be seen to be 'cracking down.' You can be sure that projected reductions in numbers on welfare will be trumpeted ahead of the next election. The public largely approve of tough welfare policies – in spite of the protestations of those who want New Zealand to be more compassionate and egalitarian and who point to a shortage of jobs, and the state's unwillingness to create employment, in the current climate. And so it's effective centre-right politics to beat up the tougher sanctions and controls over beneficiaries. If those policies and the publicity around them frighten some potentially valid applicants away from the welfare offices, I doubt that the government will regret that.
The recent 'reforms' to welfare are certainly significant, but they continue a trend that began in the late 1980s, to reduce taxes on higher incomes, to cut welfare entitlements, and to make social-assistance conditional upon work-readiness and job-seeking. The low incomes and intense surveillance of beneficiaries make life on a benefit uncomfortable, and their precarious status forces them to accept jobs on low wages – an easy route to increased profits for businesses. An MSD summary of the Household Economic Survey tells us that '2 out of 5 poor children come from families where at least one adult is in full-time work or is self-employed.' Their parents are the 'working poor.' While welfare beneficiaries are, predictably, concentrated in the low-income brackets, many people with jobs can be found there too. The ideological attack on welfare beneficiaries supports politically the economic 'efficiency' achieved by employers who pay poverty-level wages, as well as a fiscal strategy to reach a surplus.


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