Kiwiblog

Charlie Cooper in The Independent writes:

Whether or not one accepts a link between thePhilpott case and the argument for welfare reform, the tragedy has focused attention on one of the most difficult questions in modern politics: how the state should discourage people on benefits from having large numbers of children and expect the welfare system to pick up the bill.

And the options:

Docking benefits when children miss school:

One proposed policy, already in place in some US states, is for the parents of children who miss school to be docked benefits. In Michigan, parents whose children play truant for ten days see their social security cut.

In the UK, a senior government advisor suggested that the UK employ a similar strategy, extracting truancy fines from family’s state benefit.

Pros: encourages parents to be responsible for children’s education, without automatically removed their child benefit.

Cons: does not address issues of welfare dependency.

NZ has gone down this path.

Capping benefits:

A policy that is about to come into force in four London boroughs and will soon be rolled out nationwide, is that total benefits payments will be capped at £500 a week, or £26,000 per year for families of all sizes. The aim of the policy is to “make work pay” by bringing maximum benefit payments below the average full time salary.

However, the impact is expected to be predominately felt by large families, who make up the largest number of people currently receiving benefits above the cap. 73 per cent of households affected have three or more children.

The Institute for Fiscal Studies said in its Green Budget 2013 that the policy may have an impact on fertility rates “since the cap will effectively reduce the state financial support for some large families”.

Pros: tackles the problem of families having children for the sake of the benefit they bring while also encouraging people into work.

Cons: will cut the income of families by an average £93 per week – plunging many into poverty.

I wouldn’t do this for current families, but you could announce this as a policy so people in future know that if they choose to keep having more children on welfare, they won’t keep getting more money.

Cutting the number of children eligible for benefits:

An idea that would once have been considered extreme now has the backing of senior Conservatives and is being considered by Iain Duncan Smith, the Work and Pensions Secretary. David Davis, a former Tory leadership challenger, has said in the wake of the Philpott case, that there is “a strong argument to restrict child benefit whether it is to two, three or four children”, although he added that policy should not be made “on the back of one story”.

His words echo Mr Duncan Smith last year, when he suggested that he would consider capping benefit payments for new claimants after the birth of the first two children – a scheme that was dubbed the “two-child policy” and earned comparisons to China’s population control methods. Charities said any such move would have “a devastating impact on children”.

Pros: directly targets the problem of families having children for the sake of the benefit award they bring.

Cons: will unfairly penalise the children of families that exceed the cap.

The Clinton reforms cut off funding for any additional children if the parent/s were already on welfare.

Paul Bennett has announced:

Three new benefit types will replace the seven current benefit categories, in addition to the new Youth Payment and Young Parent Payment introduced in August last year.

The new categories this Bill creates are:

• Jobseeker Support for those actively seeking and available for work

• Sole Parent Support for sole parents with children under 14 years

• Supported Living Payment for people significantly restricted by sickness, injury or disability.

This is a fairly major reform, which changes the focus far more onto having welfare as temporary assistance, except for those incapable of any significant work at all.

“The legislation also introduces new social obligations to ensure children in benefit-dependent homes get quality Early Childhood Education, are enrolled with a doctor, get their Well Child checks and are in school if they are school-age,” Mrs Bennett said.

The law will also require Jobseekers to be drug-free, and will allow benefits to be stopped for outstanding arrest warrants.

I can’t believe it has taken this long to say you can’t claim a benefit if on the run from the Police!

The investment approach will target interventions and support to those most at risk of long-term welfare dependence.

“By investing in people sooner, we can actually start to break that cycle of dependence.”

It may cost a bit more in the short-term, but is a good long-term investment.

In case you needed convincing about the need for welfare reform, this story from the United States should help convince you.

It was an exclusive story for Planet Money on National Public Radio. It has had great resonance in the US, as it has exposed how great the growth in numbers on disability welfare has been.

Some key findings:

• 14 million people a month now get a disability check from the Government.
• In one county in Alabama, 25% of working adults are on a disability benefit.
• That the proportion of those claiming a disability benefit with a difficult to test problem (back pain, mental illness) has increased from 18% in 1961 to 53% in 2011.
• That some states have as many as 9% of their adults on a disability benefit.
• Fewer than 1 percent of those who were on the federal program for disabled workers at the beginning of 2011 have returned to the workforce since then.
• The disability benefit pays $13,000, just $2,000 less than the minimum wage, plus Medicare so some are better off financially not working.
• The number of children on a disability benefit has increased seven fold since 1974 to over 1.2 million.
• If these children with learning or other disabilities get a job, their parents lose the $700 a month disability check.
• Disability welfare now costs $260 billion a year, and will run out of reserve duns by 2016.

People should remember this story, when Labour and Greens constantly say there is no need for welfare reform in New Zealand. Note that the numbers receiving the Invalids Benefit in NZ has increased eight fold since 1976 from 10,000 to 84,000. Now by no means should anyone conclude this means everyone on that benefit shouldn’t be there. To the contrary I know some people on that benefit who would love to be able to work, or work longer hours than they can. So we need to be careful not to stigmatize those who are in genuine need.

However as the US story shows, the growth in the level of such benefits has been massive, and I encourage people to read the full story about what happens when the incentives to be on welfare are greater than to be in work.

The Dom Post reports:

An important social contract underpins New Zealand’s welfare system. At its heart is the principle that society will provide for individuals who are unable to support themselves on the understanding that those who are able to work will make an honest effort to look for employment.

Yep, and support for the former is undermined when the latter does not occur.

Sadly, however, some beneficiaries see it as their God-given right to remain on welfare for life and not only make no effort to improve their lot, but add to the burden on taxpayers.

They include women on the domestic purposes benefit who seem to believe they can have as many children as they want while remaining dependent on the state, and that workers will be happy to pay for them to have that privilege.

It is a minority, but it is not an insignificant minority. We should be full of compassion for parents who suddenly find themselves without a partner because they die, flee, turn abusive. But that is a different situation to having multiple babies to multiple partners over many years, and hence never being in employment.

The number of women who have had additional children while on the DPB is undeniably cause for concern. Between 1993 and 2011, almost a third of women who drew the benefit had at least one more child. In 2010 alone, 4800 children were born to solo mothers already on the DPB – 7.5 per cent of the total live births that year.

A third is far too high. Mistakes will and can occur, but at a third that suggests many of them are deliberate decisions to have further children despite being unable to even provide for existing children.

That is not fair on working parents who would dearly love more children, but who have put off increasing the size of their families because of economic pressures.

Exactly.

It is also not fair to the children of those beneficiaries.

It has long been established that children in working families have far better health, education and social outcomes. That is true for children with one parent as well as those with two.

Not only do children in sole-parent families benefit from their mother or father having a higher income than they would get from welfare payments, they also benefit enormously from seeing their parents go out to work every day.

This is the part that I think is most important. A child who grows up in a household where no adult ever works in paid employment is going to probably start life very disadvantaged.

Narelle Henson at Stuff reports:

Frustrated bosses say they can’t find suitable workers for even the most basic of labouring jobs despite the high unemployment rate, as they deal with people who turn up drunk if they come to work at all. …

But despite the many jobless, employers say continual absenteeism, substance abuse and poor work ethic appear to be making a lot of them unemployable.

Dave Connell, vice-president of the New Zealand Contractors Federation and managing director of Connell Construction, who is juggling operations in the Waikato and for the Christchurch rebuild, said 100 people responded to a Trade Me job advertisement for a junior construction role, but not one was suitable to hire.

“We are letting seven people go for every one we keep,” he said.

“I have had some people last half a day and walk off the job with $800 worth of [work] gear on them; one guy had six sick days in two weeks, and we have had issues with physicality too.”

Mr Connell said he was desperate to fill positions, but could not find anyone with the right attitude.

It will take many years to fix these problems.

The first is we need to stop people leaving school with inadequate literacy and numeracy skills.

The second is we need to install a work ethic in people from their teenage years. That is why I don’t support a minimum wage for under 18s, and why I support welfare reform.

Kate Chapman at Stuff reports:

As the second round of welfare reforms come back before Parliament Social Development Minister Paula Bennett says the 650 children born to women already claiming a benefit in January are reason enough for her tough reforms. …

There were 659 subsequent children born to parents already claiming a benefit this January, she said.Under changes introduced last October, they will have to return to work when that child is 12-months-old, if their older children are aged over 5.

Bennett said Work and Income staff used discretion to excuse 22 of those parents from the work requirement, largely because of timing around the announcement and implementation of the policy.

Meanwhile, in 2010 more than 7.5 per cent of live births – 4800 of 63,900 – were babies born to sole parents on the Domestic Purposes Benefit (DPB) and Emergency Maintenance Allowance.

And between 1993 and 2011, 29 per cent of sole mums on the DPB had another child.

”It does tell us that those that are already on benefits with children are still having subsequent children,” Bennett said.

I think there is a fundamental difference between having a child, and then ending up on welfare (because your partner leaves you, turns violent, dies etc) and already being on welfare and choosing to have further children.

Bennett admits work testing for sole parents was among the ”tougher” reforms.

But in 10 months of last year there were less people going onto the DPB that coming off. A feat which has only been achieved twice in the last 16 years, once when Working for Families was introduced.

A good start.

Stuff reports:

It’s another case of she said, she said. Labour MP Jacinda Ardern was yesterday bemoaning record benefit numbers during National’s reign.

DPB, sickness and invalid beneficiary numbers were at the highest since records began in 1940, she said.

It didn’t take long for Social Development Minister Paula Bennett to respond with her own gloating statement.

The number of people on the DPB, unemployment and invalids benefits all decreased last year, she said. It seems statistics are everyone’s friend.

Rather than just report that both MPs are claiming different things, it would be nice if the media actually provided the full data and allowed people to decide for themselves.

I blogged yesterday that the numbers cited by the HoS and Ardern were over a year out of date. That’s not opinion – it is fact.

The excellent Stats Chat site also gives people the full data, in graph form. Sadly the number of people who read that site is far far less than those who read newspapers.

Lindsay Mitchell also has some useful fisking of Ardern’s claims.

Ironically Anthony Robins at The Standard is also unhappy with the article. Not for the misleading claims, but because a Labour MP is suggesting that it would be a good thing to have fewer people on welfare!

The HoS reports:

Paula Bennett’s reputation for being tough on beneficiaries is in jeopardy as figures reveal record high numbers on state financial support.

Labour spokeswoman for social development Jacinda Ardern said the highest unemployment numbers were at around 10 per cent in the early 1990s but support for solo parents and invalids have hit record highs during Bennett’s reign as Social Development Minister.

“When it comes to the worst DPB, sickness, and invalid benefit numbers, these have all been since 2010 and under Paula Bennett,” Ardern said. “Interestingly, the two highest figures for the DPB were both after the introduction of Bennett’s welfare reforms, which mostly targeted DPB recipients by increasing their work obligations.”

Ardern provided the Herald on Sunday with figures which showed:

Between January 2009 and January 2012, the number of people on the DPB rose by 13.2 per cent. During the same period, the number of people on the unemployment benefit rose by 82 per cent. “The Government seems to be clamping down on DPB mums in an effort to show ‘action’ to mask their ‘inaction’ in employment and job creation,” Ardern said. “But neither figure will budge unless the core issue of job availability is first addressed.”

The moment I saw this story, I had a fair idea of what the actual data would show. Yes more people on those benefits between those two dates, but not a linear pattern. Of course Jan 2009 was as the GFC was in full force, and hence job losses occurring.  Also the comparison stops 12 months ago. Why?

Let’s look at the actual data, in terms of increase or decrease each year. For DPB they are

• 2008 +2,128
• 2009 +9,007
• 2010 +3,576
• 2011 +1,365
• 2012 -5,112

I think we now understand why Jacinda left the 2012 figures off. What I don’t know is why the Herald on Sunday did.

Let’s do the same with Invalid’s Benefit numbers.

• 2008 +3,419
• 2009 +1,537
• 2010 +67
• 2011 -1,062
• 2012 -472

And for those interested in the Unemployment Benefit.

• 2008 +7,760
• 2009 +35,820
• 2010 +756
• 2011 -7,120
• 2012 -6,217

They all show the same thing. The increase in benefit numbers started in 2008 (under Labour) and worsened in 2009 as the Global Financial Crisis struck.  Despite patchy economic growth since 2009, benefit numbers in all three categories have fallen in the last two years.

One has to congratulate Jacinda for getting the Herald on Sunday to run an entire story based on selective cherry-picked data. That’s a good achievement for an Opposition MP.

Claire Trevett at NZ Herald reports:

The number of sole parents on the domestic purposes benefit dropped by 5000 last year – a drop Social Development Minister Paula Bennett is attributing partly to her new policy requiring sole parents to get jobs when their youngest child turns five.

Figures released yesterday showed there were 95,138 sole parents on the DPB at the end of 2012 – down from 100,266 the year before.

More than half of that drop happened in the last three months of the year, after the introduction of Ms Bennett’s policy required sole parents to get part-time work when their youngest child turned five and fulltime work for those whose children were older than 14.

Ms Bennett said 3221 sole parents had returned to work since that came into force in October.

It’s early days, but that looks to be a promising start. The real beneficiaries of the policy are the kids, as growing up in a household with no adult in employment has strong correlations with negative outcomes in multiple areas.

Hamish Rutherford at Stuff reports:

Disability services group CCS says it has “grave concerns” about plans to introduce work ability assessments, influenced by controversial tests conducted in Britain.

From July, the invalid’s benefit, paid to about 85,000 New Zealanders, will be replaced by the supported living payment, as part of wide-ranging welfare changes.

Social Development Minister Paula Bennett has said this would mean little change, although in a speech to health professionals late last year she signalled a new assessment regime which “echoes” the British process.

Measuring the extent to which disabled can work, the British tests have prompted a debate in the British Parliament, as well as protests targeting the Paralympics where Atos, the private company doing the tests, was a sponsor.

CCS Disability Action chief executive David Matthews cited research showing the British Government had spent £42.2 million (NZ$80.5m) on appeals against the tests, about 40 per cent of which overturned Atos’ findings.

CCS may have a point, but the data they cite doesn’t make it.

The cost of appeals by itself means little. The UK has a population around 40 times larger than us.

The 40% being over-turned on appeal means little also, unless we know how many appealed. If only 1% of those classified appeal, then a 40% success rate would be lower than what I’d expect. If 75% of those classified are appealing, then a 40% success rate would suggest a wider problem.

Jay Boreham at Stuff reports:

Police have helped a South Auckland family of 13 avoid eviction by transforming their Housing New Zealand home, bringing it up to proper living standards.

The Flat Bush Neighbourhood Policing Team gained the support of the local community and businesses to upgrade the home, which was in such a poor state of repair the family was on its last chance with HNZ.

A great initiative by the local Police.

Constable Karen Ancell said 11 children lived at the house with their 32-year-old mother who was pregnant.

I’m sorry? 11 kids? No mention of father or fathers. And pregnant again? This is why the Government changed the law this year, to reform our welfare system.

“We have stepped in to get the house up to scratch so the family can make a fresh start,” Ancell said.

“They are struggling, to say the least, and some of the children are starting to come to police attention.”

More than 40 volunteers helped with the make over while businesses donated materials and services.

What a wonderful community. Hopefully their generosity will serve as a lesson.

The volunteers fumigated the house, repaired damaged walls and painted the interior. Outside they tidied the grounds, erected raised garden beds and planted vegetables.

Police, Salvation Army and Habitat for Humanity representatives also donated furnishings to completely refurnish the house.

The community’s input for a family they had never met was huge, Ancell added.
 
“It’s about giving a family a fresh start. They are in a good place to change now, whereas in the past that hasn’t been the case.”

But giving them a home they can be proud of is just the first step. The police are also working to give the family the tools to become good members of society.

They will receive mentoring, budgeting advice, counselling and health checks as well as anger management and parenting training.

“They are in a bit of debt and it is very difficult to make headway out – it’s a vicious circle.”

It is an opportunity for a fresh start. But part of that is self-responsibility. If you are struggling to cope with 11 kids, why would you have a 12th? Contraception is generally free, as are long-term procedures.

Stuff report:

Leah and Sarah Gilbert are on the domestic purposes benefit and want to stand against what they see as unfairness surrounding benefits and “beneficiary bashing”.

The Hamilton sisters have got behind Friday’s National Day of Action against welfare reforms and, have organised an event for people to have their say.

“Beneficiaries are being stereotyped as bludgers, parasites, lazy, selfish, that we all neglect our kids and would rather spend money on drugs and alcohol. I don’t fit into that. My kids are healthy and happy and go to school every day with full lunch boxes. That’s not me, and that’s not okay,’’ Sarah said.

And that’s great. And I don’t know anyone who thinks everyone on a benefit is a parasite, a bludger, lazy or selfish. I certainly don’t. I think there are some people on benefits who are using it as a lifestyle choice – but they are certainly not the majority.

But it is not acceptable to ignore the problems caused by the minority, just because some people think it is a slight on them.

Take for example rape and domestic violence. We have far far too much domestic violence in NZ, and it sickens me the number of men who bash women.

But when we talk about domestic violence in NZ, I as a man don’t feel I am being labelled a criminal, a thug, a violent person. I am confident enough to know it is a reference to the minority who are the problem.

Frankly labeling welfare reform as beneficiary bashing is just an attempt to avoid the actual issues.

I note in the comments to the article, that the Gilberts have an interesting political agenda. Extracts:

Welfare money all ends up in the hands of private businesses – I am merely a conduit for it to end up in the hands of my landlord, the supermarket, the child’s school, etc.

Goodness. First I didn’t know her school was a private business. But secondly, so what? We all spend all our money eventually. That doesn’t mean it grows on trees.

Employers are the ultimate gatekeepers of employment – I look for work, but my health and the job climate puts me at the bottom of the lists with my history DESPITE MY EFFORTS.

And if you are studying to gain qualifications and/or applying for jobs – then that’s great. From everything in the article, they’re doing what you should do on welfare – managing costs, studying, applying for jobs. That’s all the Govt is requiring – there is no requirement to get a job or lose your benefit – just to be available for work. I don’t regard that as beneficiary bashing.

If full-time salaries were split into part-time jobs, the government would recieve more tax revenue and opportunities for employment would be increased.

No they wouldn’t. I hope the degree is not in accounting or economics. Two people earning $20,000 pay much less tax than one person earning $40,000.

People are envious because the minimum wage does not provide a livable wage.

You’re having trouble getting a job, and you want to make it even harder to get one by putting up the minimum wage?

Also:

I never said I don’t like the amount I get, in fact I redistribute excess to a children’s charity and invest in a scholarship fund to improve my son’s opportunities.

And that’s great. Good to have an example of a beneficiary making ends meet, and a bit leftover. But why does the article also say you have sometimes gone hungry to feed your kids?

Kate Chapman at Stuff reports:

Welfare reforms are expected to save up to $1.6 billion over four years.

Social Development Minister Paula Bennett yesterday introduced the second round of reform legislation.

The Social Security (Benefit Categories and Work Focus) Amendment Bill replaces the current benefits with three new categories: Jobseeker Support, Sole Parent Support and the Supported Living Payment.

I see the savings as a bonus, but not why this should be done. I think the major beneficiaries of these reforms will be the families of those who move into work.

What is described as an investment approach – based on an insurance model – is expected to save between $900 million and $1.6 billion by June 2017, with 44,000 people expected to come off benefits and up to 6000 working part-time.

I presume this figure doesn’t just include the reduction in benefit expenditure, but the increase in tax receipts as more people work.

The Dom Post editorial:

Observing the wailing and teeth-gnashing that has accompanied the latest welfare reforms, a visitor could be forgiven for assuming the Government is hellbent on introducing Dickensian-era workhouses to New Zealand.

In fact, nothing could be further from the truth. The new sanctions unveiled by Social Development Minister Paula Bennett are not an attempt to deny assistance to the children of beneficiaries, but to ensure they get it.

Exactly. Making sure they get taxpayer funded user-free ECE, making sure they attend school, making sure they do their free Wellchild checks is hardly bad for the kids.

Every child deserves a decent upbringing and the opportunity to develop to his or her full potential. Simply handing money to bad parents is no guarantee that their children will be fed, clothed or loved.

The wider Kahui clan was reportedly receiving more than $2000 a week in benefits when 3-month-old twins Chris and Cru suffered the injuries that caused their deaths. There is no reason to believe that more money would have made a difference. Similarly, four adult beneficiaries were living in the Rotorua home in which 3-year-old Nia Glassie was mortally injured. Would larger state payouts have prevented her from being stuffed in a tumble dryer, beaten and hung from a clothesline?

The left are convinced that more money is the solution to everything. It isn’t. Labour and Greens are about to vote for a bill to extend the $60 a week in-work tax credit from working parents to parents on benefits, in the belief this will cure child poverty.

Child poverty is defined as being in a household that earns less than 60% or 50% of the median income. So if the median income drops, this will actually be celebrated as bringing kids out of poverty!!!

The problem in both cases was not the level of state support, but values. A small section of society has so lost touch with the notion of right and wrong that it does not even recognise the obligation to take care of its own.

The minister’s reforms are an attempt to fix the problem by using benefit payments to remind those tempted to neglect or abuse their offspring that with rights come obligations. By any standard, the new “social obligations”, which will take effect next July, are measured, moderate and compassionate. Beneficiaries will not be penalised for failing to use services that do not exist in their areas and, before any sanctions are imposed, they will be given three opportunities to comply with the new regime. Furthermore, the minister is promising the speedy restoration of entitlements once failing parents do the right thing.

The best policies tend to use both carrot and stick. The carrot should be that these services are free, and they are good for the child and family. The sick is sadly necessary for some families.

Instead of condemning the new measures, Labour, the Greens, Plunket and beneficiary advocate groups should be applauding Mrs Bennett for having the courage to tackle a problem that decades of well-intentioned but ineffective policy-making have failed to remedy.

What I would find interesting is a clear statement from Labour on whether they will repeal the requirement?

Kate Chapman at Stuff reports:

The lifetime cost of current beneficiaries is more than $78 billion, a new report has found.

An actuarial valuation conducted as part of the Government’s welfare reforms shows the average total cost of all who had received a working-age benefit in the year to June 30, 2011 was $78.1b.

Of that, $17.8b came from those who started out on the DPB, $19.1b from those on an invalid’s benefit and $7.2b to those who were on a sickness benefit.

Just five per cent of the total cost, or $4b, was from those who started out on an unemployment benefit.

They’re some large figures, and do demonstrate why it it important to reduce the numbers of people long-term on welfare. Those on the dole tend to be for a short period of time. It is the other three major benefits which have the bigger impact.

But the fiscal cost is not the main reason we should try and reduce the number of people on long-term welfare. It is for the benefit of those actually on welfare. There are a small number of people who are genuinely incapable of ever being able to do any paid work – and they should get gold plated support.

But most people are capable of some work, even a few hours a week. Yes they’ll still need income support, but being in work benefits people not just financially, but physically, emotionally and mentally.

Andrea Vance at Stuff reports:

Parents face having their benefits slashed in half if they don’t send their children to school or early childhood education centres and enrol them with a doctor.

They must also complete basic health checks.

Social development minister Paula Bennet has just announced new ‘social obligations’ which she says will give kids a better start in life. …

From July next year all beneficiary parents must ensure their children:

* attend 15 hours a week Early Childhood Education (ECE) from age 3

* attend school from age five or six

* enrol with a General Practitioner

* complete core WellChild/Tamariki Ora checks

If they don’t, a ”graduated sanction process” will allow three warnings before they face a cut of up to 50 per cent.

People say we need to do something about child poverty. I believe this will do more to help a lot of vulnerable children, than almost any other measure.

If the taxpayer is providing money to parents specifically for the purpose of raising children, then it is not unreasonable to have a requirement that the kid go to (free*) school, get their (free) medical check ups and attend (also free or close to it) at least 15 hours of ECE.

The three warnings regime means the stick will only be used as a last resort.

A case can be made that this requirement be extended to any family that receives family tax credits through Working for Families.

* free in this context means to the parent

Paula Bennett has announced:

People with outstanding arrest warrants will no longer receive a benefit while evading Police says Social Development Minister Paula Bennett.

“Of the approximately 15,000 people with a current arrest warrant, around 8,200 are on benefits,” says Mrs Bennett.

“If someone has an unresolved arrest warrant we will stop their benefit until they do the right thing and come forward to the authorities.”

I’m a bit amazed that up until now you could be on the run from Police, and indefinitely keep claiming a benefit!

Stuff reports:

The Government’s welfare reforms have become law but the controversial policy will continue to dog National, with a rowdy protest planned for the party’s annual conference at Sky City this weekend.

Teen beneficiaries will have their payments managed as soon as next month and new requirements for solo beneficiary parents to look for work will come into effect in October. Parliament passed the changes by 64 votes to 57 last night.

I honestly don’t think we do teenagers a favour by just handing the benefit over to an 17 year old, and saying here’s the money, now go away.  Likewise while we must have a welfare state that looks after children and parents who are left without enough financial support, we shouldn’t have a welfare state that encourages a sole parent on welfare to have further children.

The changes have been labelled an attack on the poor by beneficiary advocates, but the Government says it will modernise welfare and overhaul the system from a passive approach to an active, work-focused system.

Auckland Action Against Poverty and the Auckland-based student movement Blockade the Budget will picket National’s conference on Sunday in protest to the reforms.

Excellent, not the same without Sue Bradford there. I recall one conference in Dunedin where she charged into the church service, and one of Bolger’s staff did a very nice tackle on her. For years afterwards many delegates thought Todd was DPS, rather than a political advisor!

Auckland Action Against Poverty spokeswoman Sue Bradford said there were no jobs for beneficiaries to move into, especially those who could only work between the hours of 9am and 3pm, or who faced leaving their children at home alone after school.

In which case they will remain on the benefit. The requirement is to seek and be available for work – not to gain a job. Having said that, while there are not jobs for everyone on welfare – there are and will be jobs for some. The jobs market is fluid, not static. There are always vacancies coming up.

The Government failed to realise that parenting was a job in itself, she said.

It is a job, and hence generally no work-testing until the child is five.

Beneficiaries will also been given access to long-term reversible contraception.

How awful. That’s just like Nazi eugenics according to the Dom Post cartoonist Hodgson.

The HoS reports:

Taxpayers are forking out $2000-plus a week to a select group of benefit-dependent parents with more than 10 children.

Official figures show that twelve families on welfare have 10 or more kids, receiving a range of top-up payments on top of their average of nearly $1000 a week.

It would be interesting to see how many families there are with more than 10 children who are not on welfare. A generation ago there would have been quite a few. Jim Bolger had nine kids for example. I suspect far fewer today. Even the Catholics seem to manage to restrict themselves to four or five kids – Vatican roulette must have got better over the years

As for the 12 families on welfare with over 10 kids, what I’d be interested in is whether the kids came before or after they were on welfare. If one parent died, then their surviving partner would go onto welfare with the kids. That is how it should be (although I would recommend life insurance for parents with large families). But if a family has had 11 or more kids, and the parents have never been in the workforce – that is not a good thing.

“There’s two words we don’t use often enough in this country and that’s self-responsibility,” Bennett told the Herald on Sunday. “The size of someone’s family is their business, so long as they don’t expect someone else to pay for it.”

Absolutely. So long as the parents are capable of providing for their family, it is no one’s business how many kids they have. However if you are already unable to provide for your existing kids, and you choose to have more – then the taxpayer does take an interest.

The data, released by the Ministry of Social Development under the Official Information Act, shows there are 143 parents on Work and Income’s payroll who have eight or more children and receive basic payments of $7 million a year, plus supplements.

There are more than 3000 large families with five children or more on the benefit. One-third have been on the benefit for more than five years and 430 for more than 10 years.

This is what the recent welfare reforms are designed to reduce – long-term welfare dependency.

Bennett said there were some people, such as grandparents and foster carers, who had taken children into their care who were doing a valuable duty for the community – but others who were taking advantage of the system.

Yep, need to differentiate.

But beneficiary advocate and former Green MP Sue Bradford said everyone would be better off if beneficiaries received more money.

Umm, except taxpayers I presume. I would also dispute that keeping people on welfare is good for those families long-term.

The Herald reports:

Beneficiaries who refuse or fail drug tests while applying for jobs will have their welfare cut from mid-2013 under the Government’s next round of welfare reforms.

The National-led Government says there are now no consequences for drug-takers who opted out of job applications when faced with a drug test.

Social Development Minister Paula Bennett told the Herald the new Welfare Reform Bill would have new requirements for drug testing, but the finer details were still being finalised.

National’s pre-election policy document said beneficiaries who did not apply for a job because a prospective employer asked them to take a drug test would have their benefit cancelled.

If they took the drug test and failed it, they would also be sanctioned.

Mrs Bennett said the requirements would be introduced to Parliament later this year and were expected to be implemented in July 2013. She expected the rules to apply to anyone on the new Job Seekers benefit.

It will be interesting to see the final details of the policy. If it merely states that if you refuse to apply for a job because of a drug test, then that is fair enough. If all job seekers are expected to be tested regularly, then I’d say that could be pretty intrusive. I would be surprised if it is the latter.

Two good articles by Simon Collins on welfare reforms. While not always agreeing with them, I almost always find his articles well researched and fair.

The first article is here.

Tough welfare reforms now going through Parliament may deter some women from seeing the sole parent benefit as a viable lifestyle – but at the risk of long-term harm to their children.

As with almost all policies, there is a trade-off. The reforms should deter some women from having multiple children while remaining on the DPB, but they may cause some hardship for some families. I don’t think the status quo was working or acceptable, so support the reforms.

Now she is pregnant again to a man she met only once.

“It was just a silly thing one night, I got drunk one night in town,” she says. “I was alone by myself that weekend, Antonio had gone to his family. I decided to go into Auckland City with friends and they showed me a whole life that I didn’t know.”

She considered an abortion but rejected it: “It’s a Maori belief, it’s a gift from God.”

A good example of the problem with the status quo.

New Zealand has among the world’s highest rates of sole parenthood, especially among low-income groups for whom the DPB may seem a viable lifestyle option. In the 2006 census, 25 per cent of all New Zealand children and 43 per cent of Maori children lived in sole parent families, compared with an OECD average of 16 per cent.

Otara administrator Delaney Papua, who turns 20 next month and is expecting her first baby in November, says going on the benefit seems to be just what you do when you get pregnant.

“All the people that I know that have kids go on it, so I kind of just assumed that you have to be on that,” she says.

And again, the challenge to break those expectations.

Another woman, Renee, became pregnant with a flatmate while on the benefit when her first two children were 8 and 5, and says it “was never a boyfriend/girlfriend thing”. She also thinks the new law is “fair”.

“If the law had been in place, I just would have been probably more cautious,” she says.

At another McDonald’s recently, she overheard two young mothers with babies talking about how they were trying to get pregnant again.

“I’m loving this benefit shit,” one said. “I’m going to have another baby, I’ll keep having them, it’s free money.”

And that is a very bad reason to have a baby.

In the second article, Collins reports:

A single-parent support group says some women are being driven to abort their babies because they are scared of the Government’s new hardline welfare laws.

Which is why free contraception is a good idea. Contraception is far preferable to abortion.

Julie Whitehouse, of the Auckland Single Parents Trust, says other mothers are going “underground” and trying to hide their babies from authorities rather than go back to work one year after giving birth.

This is a weird and illogical statement. Hiding your baby means you get no reprieve at all from work testing, rather than a one year reprieve. It also means they get no additional DPB. I suspect Ms Whitehouse doesn’t know what she is talking about – or her comments have not been communicated well.

Interviews with solo mothers who have become pregnant again while on welfare have found that most plan to respond to the new law as the Government intends – by taking more care not to get pregnant again, and by agreeing to look for work after a year if they do have another baby.

Excellent. The best outcome is taking more care not to get pregnant.

Treasury commissioned two public health researchers from Otago University to examine Stats NZ  longitudinal survey data on family incomes. The report from Otago University is here and an analysis by Treasury here.

I think income mobility is far far more important than income inequality. I do not think there is much merit in insisting that an untrained unskilled 18 year old should be earning the same as a 50 year old professional with 30 years of experience.

100 years ago in the United Kingdom there was little income mobility. Those families with wealth tended to keep it, and poor families stayed poor. I can understand the appeal of socialism 100 years ago. But today, while of course not perfect, there is greater income mobility. The knowledge economy especially means that land and capital are not as important as previously. More and more of the world’s billionaires and millionaires created their fortune, rather than inherited it. This graph from the analysis shows the situations in New Zealand over just a seven year period from 2002 to 2009.

So of the families who were in the bottom 10% of family income – in just seven years, 74% of them were no longer in the bottom decile. And only 46% of those in the top decile were still there seven years later.

By far the biggest characteristic indicating likely persistent deprivation is being a sole parent family.

Also of interest is that only a third of familes who spent the whole seven years on low income had been in deprivation at any point.

The Treasury’s conclusions:

• Policy should emphasise mobility, deprivation and persistent low income
• Policy should be designed with mobility in mind
• Targeting policy effectively can be difficult
• Solo parents are perhaps the group to be most concerned about

Income inequality is used by the left to argue for higher taxes and more welfare.  But as I said I do not accept that there is a problem that an 18 year old with no mortgage, no kids, no skills, no experience is paid less than someone with decades of experience. What we want is the ability for that 18 year old to get a job, to get education and training, to earn more over time and not spend a lengthy period of time (if any) in deprivation or hardship.

Some other stats:

• Around 47% of families moved at least two income deciles over seven years
• Over the seven years, 50% of families experience low income at least once
• But 43% of those who had low income, only had it for one or two of the seven years
• Sole parents are 12% of families but over 50% of those in persistent deprivation

This is one of the reasons why I think the welfare reforms are so important.

Stuff reports:

The Government’s plan to offer free long-term contraception for beneficiaries and their daughters is being labelled as an insult and intrusive to women’s right to have children.

Social Development Minister Paula Bennett yesterday said contraception would eventually be fully funded for female beneficiaries and their 16 to 19-year-old daughters.

Oh my God how mean and nasty. Having taxpayers fund free contraception.

Auckland Action Against Poverty spokeswoman Sue Bradford this morning said while the contraception was voluntary, it was “totally unacceptable” for the Government to get involved in women’s reproduction.

So Sue is arguing against any taxpayer subsidy for contraception for any woman? She should join ACT!

Bradford said the Government was persuading women to take contraception through sanctions, such as having beneficiaries who have an additional child on the benefit to look for work when that child was one.

“We believe that women in this country have the right to control their own reproduction,” she said.

They do. But taxpayers also have the right to say if you have half a dozen kids while on the benefit, we won’t keep paying for your choices.

Lindsay Mitchell writes in the NZ Herald:

Metiria Turei describes this as “forcing” mothers into work but that claim doesn’t stand up under scrutiny. Nobody is forced to have a baby on a benefit – a benefit provided, incidentally, because she is already unable to independently support her children. Never before have women been better able to control their fertility. If she chooses to get pregnant and have the baby she will be doing so fully aware that if a part-time job is available when that baby turns one, she will be expected to accept it (along with the childcare assistance needed to do so.) The choice is ultimately hers.

This is a key point. The vast majority of those who have further children on welfare, choose to do so.  Despite being unable to even support their current children, they choose to have further children.

Mitchell points out the Key Govt response is different to the US response:

Some American states attempted to deal with the same problem by introducing ‘family caps’ which limited cash assistance to a fixed number of children and no more. The results were mixed and such a move here would be met with objections about depriving additional children, especially from the Child Poverty Action Group.

So the government went with the one year exemption option.

If the parent moves into work, due to work testing, that will actually increase the family income.

Freedom of choice is what the reforms are essentially about re-balancing. True freedom of choice can’t encroach on someone else’s. Most voters are behind the reforms because they feel unfairly treated when one group is allowed to make a choice that they are denied. Why is it fair for single parents to be supported to stay at home indefinitely when most partnered parents go back to work quite quickly? It becomes especially gruelling for working mothers to then hear that putting their young children into daycare is a form of “child abuse”, an argument advanced by the opposition to reject the reforms.

Absolutely. Also most parents choose to limit their families to a size that they can afford. This was not a choice available 100 years ago, but is a choice today.

Children who spend many years on the DPB generally have much poorer outcomes. This is well-documented. To knowingly exacerbate this situation by adding more children to a workless household can’t be defended at any level. In the interests of children the government is entirely justified in trying to break this habit.

Well said Lindsay.

Duncan Garner blogs:

Who really thinks National’s welfare reforms are that scary?

They’re not.

Forcing people to be work-tested should be a basic contractual agreement between the Government and its “clients” when money changes hands.

Indeed much of that happens already – and has been occurring for years.

Paying the rent and power bills of teenagers directly before they spend their benefit money on booze and cigarettes is hardly radical.

No one will lose their benefits if they can’t find a job. All the Government is asking is that they get work tested sooner and that they become more aggressive in their search for work. They will lose the right to turn down work – they must take a job if it’s offered. If they continue to thumb their nose at work, they will start to lose their benefits.

And Duncan addresses the issue of the job snobs who say you should be able to choose what job you take up:

People need meaningful sustainable jobs. Flipping burgers is a job; it’s a start, we’ve all done this sort of work.

But it’s true for those entering the workforce for the first time in a long time that they need to start somewhere but they also need a pathway to show them the way out of those jobs too.

I often get accused by some who say I’m a media hack and what would I know about low-paid work?

Well I know something. I know I cleaned the Whitcoulls Queen Street store at 16 in my school holidays for youth rates – about $4.50 an hour at the time. I powder-coated curtain rails for $6.00 an hour in a Glenfield factory a year later. I put lids on toothpaste at the Avondale Redseal factory at the same time to help me pay for my first year at university.

My first job at TVNZ in 1995 was as an intern and I was paid $15,400 a year – about $250 a week from memory. A year later they put me on $21,000. By year three it was $30,000.

I worked like a slave for $250 a week. Try living on that in Auckland – it was impossible.

They were part-time crappy jobs (not the TVNZ one) – and they sure as hell encouraged me to take my studies seriously by year three!

Like Duncan I cleaned a store while at school. But I was 14 and got $1.99 an hour for cleaning at Woolworths. I was so proud to be in regular employment, working every day after school plus Friday nights and Saturday mornings. And my first job after university was $22,000 a year only and at one point I was working part-time for $18,000 a year.

But back to Bennett and her handling of these changes so far.

She’s tough. She’s been there. She’s been a solo mum. She’s had it hard. She’s come out the other end. Labour hates her. And she hates them more. It’s a perfect rematch of the Rumble in the Jungle – except these guys might be tougher. Labour regards her as a traitor in my opinion – and they’re going after her. Problem is – nothing is sticking yet. …

But Bennett has started the year with a spring in her step. She looks determined to front foot these welfare changes that she believes in.

Yesterday in response to questioning by Hone Harawira, I thought she nailed him by telling him to sort out his patch and his voters – who she claimed would rather smoke drugs than get jobs. Not every minister would try that one – but it silenced Harawira, which isn’t easy.

The Hansard records the exchange:

Hone Harawira: When the Minister talks about young mums going out to look for jobs, does she think young mums should be allowed to go to the front of the queue of the 150,000 people who are already unemployed, or does she think that the young mums should be made to wait until the 150,000 get jobs first, and can she please tell us where the jobs are for the 150,000 who are already unemployed, so that young mums can then get in line for the next jobs?

Hon PAULA BENNETT: The member could look in his own patch, actually. I have a newspaper article here about the forestry industry that is saying they cannot get enough workers because of the drug taking that is going on, and some of those workers are not stepping up and do not actually want the jobs. I was in Kawakawa just a few weeks ago, when I heard about someone who had 19 jobs and could not fill them. Two young women had gone into a job in hospitality in his own patch. Within 3 days their boyfriends came along and told them they did not want to see them working, because they did not want to see them getting ahead of themselves. We are going to back those young women. We are going to back them into work and try to get them off benefits. That member may not think that they are worth it, but we do.

Bang.