Monday, October 18, 2010

Lindsay Mitchell: Labour promises built on false premises

Addressing the Labour Party Conference, Deputy Leader and Welfare Spokesperson, Annette King, singled out the domestic purposes benefit as a policy that would change under their new 'putting children first' philosophy. Unfortunately Ms King doesn't properly understand the dimensions of existing DPB dependence and its effect on children. Ms King claimed that, 'Around 70% of people on the DPB move off the benefit in 4 years, it's used as a family transition.'

In striking contrast recent Ministry of Social Development research found that:

On average, sole parents receiving main benefits had more disadvantaged backgrounds than might have been expected:
· just over half had spent at least 80% of the history period observed (the previous 10 years in most cases) supported by main benefits[1]


The anomaly arises because many people leave the DPB but return within a short space of time.

Ms King went on to criticise National for cutting training support for sole parents yet a Treasury Report to the Welfare Working Group found that the Training Incentive Allowance may have actually resulted in beneficiaries staying on welfare for longer;

Fifty-one percent of DPB recipients participating in an intervention took the Training Incentive Allowance, which MSD found to have no effect on the time a beneficiary was likely to spend off benefit – in fact the study found there was a chance TIA slightly increased the average time spent on benefit. MSD did note there was a chance that TIA may have an unobserved long-term impact (after seven years) on time spent off benefit.[2]

The speech also claims that the DPB does not provide an adequate income. Yet a typical DPB recipient with two children living in Auckland receives $580 per week [3], significantly more than someone working full-time on the minimum wage earns. Hence the incentive to move off a benefit is reduced. International research shows that the higher benefit payments are, the more workless households result.

Starting from so many faulty premises does not bode well for the potential of Labour's promises to improve the prospects of children on welfare.


[1] http://www.msd.govt.nz/documents/about-msd-and-our-work/publications-resources/research/sole-parenting/understanding-sub-groups-of-sole-parents-receiving-main-benefits.doc

[2] http://ips.ac.nz/WelfareWorkingGroup/Downloads/Working%20papers/Treasury_Report_WWG_Sept2010.pdf

[3] http://www.msd.govt.nz/about-msd-and-our-work/newsroom/factsheets/future-focus/domestic-purposes-benefit.html#ImportantstatisticsaboutDPB7

3 comments:

AronWatson said...

And you would fix the problem how Lindsay??

How about keeping with your right-wing buddies, give those long-use DPB mothers a time limit, and if they ain't working 15 hours or more, cut there benefits in half regardless if there children starve or not.

Typical right-winged fascist thinking.

Anonymous said...

"A typical DPB recipient with two children living in Auckland receives $580 per week" - so all you have to do is get pregnant, have a couple of kids, and if Labour has their way, you will receive an income greater than the average wage for most of the rest of your life! What a great way to entrench dependency. We should be introducing reforms that give people a helping hand while they get back on their own feet. The DPB should be abolished and replaced with a temporary benefit that provides time limited support.

Anonymous said...

I don't think we should allow the DPB to become a way of life with recipients having a string of children from different fathers.

Yes, there should be reforms and accountability but the devil is in the detail.
Are we going to cut off the money and let children starve? Are we going to demand that recipients work when the jobs are not there?
Are we going to take account of the fact that net income from employment may be less than the benefit once transport and childcare costs are taken into consideration?

Another aspect which should be faced is the difficulty solo parents may face when they have a sick child and no support person to assist. Do they tell the boss they can't come that day? Do they leave the child at home alone? Do they shunt the child off to school anyway?

So, let's solve the problem, if we can, in a context of realism and common sense. Surely there have been some reasonable solutions arrivied at in other countries that we may learn from.

We don't want long term benefit dependency but let's not make the cure worse than the disease!