NZ Herald on Green policy to pay in work tax credit to those not in work

The editorial:

The Green Party is offering a simple answer to child poverty: give beneficiary parents the same wage subsidies paid to low and middle income earners with children. That, the party calculates, would give beneficiaries an extra $60 a week. “This money will transform life for these kids,” said co-leader Metiria Turei. “It’ll mean having warm clothes, school books, lunch and turning on the heater when they are cold.” If only it was that simple.

It will mean more families will be penalised if they go from welfare into work.

Quite apart from the cost this would present to taxpayers ($500 million a year, the party estimates) it is an admission that the extra $60 a week the Greens would put in the hands of parents might not be spent on warm clothes, school books, lunch and home heating. Child poverty is not simply a matter of income.

If it were, then all children being raised on current benefits would be poorly housed, clothed and under-nourished. People’s circumstances vary greatly and the welfare system has become much better at providing allowances for particular needs.

Living off welfare is hard, but most families manage to do it without disadvantaging their kids significantly. And there is a lot of flexibility with hardship grants for those who need it.

The much maligned benefit reforms of 1991 reduced base rates and introduced or boosted grants for accommodation and the like. Ms Turei, as it happens, became a single parent in 1993. She referred to this in her speech, noting that her daughter has grown up in an era of “shocking levels of deprivation and poverty among our children”. Yet in that era she managed not only to raise a child but obtain a law degree with the help of a training incentive allowance.

Six years after becoming a sole parent, Ms Turei graduated from Auckland University and began work with Simpson Grierson. Her experience suggests that the welfare system as it exists is not necessarily a poverty trap.


National argues the cure for poverty is employment, not just because work can pay more than welfare but because it provides the social mobility that a benefit does not. A job is liable to bring opportunities to broaden skills and responsibilities, increase earnings and productivity.

Work is about more than higher incomes. It brings masses of other benefits.

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