Friday, November 26, 2010

Radical Changes to Social Welfare System

Excellent article from the world socialist website about what the Government was doing earlier this year:

New Zealand government attacks beneficiaries

By Tom Peters
12 July 2010

New Zealand’s conservative National government is preparing radical changes to the social welfare system, designed to cut costs by restricting access to benefits for tens of thousands of people. The government, like those in Europe and elsewhere, has launched a policy of austerity to reduce its sovereign debt in line with the demands of international investors. This entails imposing the cost of the global economic crisis on the poorest and most vulnerable people in society.

Legislation due to be passed later this year will introduce mandatory work-testing for sickness beneficiaries and force single parent beneficiaries to look for work once their youngest child turns six. Social development minister Paula Bennett said the new laws would apply to 43,000 single parents, while 9,000 sickness beneficiaries had already been found fit for work and would be expected “to do what they can to support themselves”. The Social Assistance (Future Focus) Bill will also require people on unemployment benefits to undergo a “comprehensive work test” every 12 months. Those unable to prove they have been looking for work will face sanctions, including having their benefits halved or cut off entirely.

Despite its rhetoric about an “unrelenting focus on work,” the government has no intention of funding new jobs to replace those destroyed by the economic crisis. Instead, its new policy seeks to harass and hound people off welfare and into total destitution or reliance on family networks and private charities.

The new laws will further restrict access to emergency hardship payments for food, power bills and other basic needs. Bennett railed against welfare recipients, telling a press conference that “too many people view welfare not as a last option but as a way of life”. She called for “a shift from a mentality of entitlement to one of self-responsibility”.

In a cabinet paper, Bennett said the government would carry out “a stricter application of the eligibility rules for hardship assistance”. Desperate beneficiaries who receive three or more hardship payments in a 12-month period will be forced to “complete compulsory budgeting activities”. They will be denied further assistance if they cannot “demonstrate that they have done something of their own initiative to improve their situation”. Bennett told the media: “Last year the government paid out over $250 million in hardship payments and that, frankly, is unsustainable”. Provocatively, and without giving any evidence, she accused beneficiaries of attempting to “milk the system”.

In fact, the high number of hardship payments—over one million payments were granted by Work and Income in 2009—is a measure of the devastating impact of job cuts and rising prices since the onset of the recession and demonstrates that benefit levels are grossly inadequate. As of March, 324,814 people—close to one in eight of the working-age population—were reliant on poverty-level welfare payments, which amount to a maximum of just $194 a week for adult unemployment and sickness beneficiaries and $278 for single parents. For 18 to 19-year-olds living at home, the rate is only $129.

While official unemployment fell in the first quarter of 2010, from 7.1 percent to 6 percent, it remains well above the 3.5 percent level in 2007. Food prices have risen by about 8 percent in the past two years. The food parcels and emergency assistance given out by the Auckland City Mission increased by 50 percent last year.

The government is taking steps to shift people from the invalid’s benefit, which pays $242 a week, onto the sickness benefit, which pays $194. From September, Work and Income case managers and designated doctors will “vigorously” assess applicants for the invalid’s benefit—many of them people with mental health problems or serious disabilities—to determine if they are capable of part-time work.

Paul Blair, a beneficiary advocate from the Rotorua People’s Advocacy Centre, told the New Zealand Herald in April that there was already “a nationwide campaign to kick [people] off the invalid’s benefit”. Blair said Work and Income regional health advisers were ringing doctors and “cross-examining” them about whether their patients were really incapable of working 15 hours a week.

More attacks are being prepared. In April, Bennett appointed a Welfare Working Group (WWG) to address “long-term welfare dependence and to look for ways to turn around the growth in beneficiary numbers and expenditure”. Bennett told parliament on June 15 that the Group would look at recent welfare restructures in Ireland, Australia and the UK. She praised the UK government’s new “welfare-to-work” programme, which will strip the unemployed off benefits if they refuse to take a job offer and use “tougher” medical tests to drive the sick and disabled off benefits.

A WWG forum held on June 9-10 also discussed proposals such as time-limited benefits, as in the United States, and a worker-funded unemployment insurance scheme. The WWG will report to the government in December.

The Maori Party and Whanau Ora

Another element of the government’s assault is the Whanau Ora (“family well-being”) policy devised by the Maori Party. Following the 2008 election, the Maori Party entered into a “confidence and supply” agreement to support the National government on key policy issues. In return, National is backing policies designed to benefit the thin layer of Maori elites that the Maori Party represents.

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