Monday, August 15, 2011

Mike Butler: Better ideas needed on welfare reform

The leader of the National Party, which claims to believe in personal responsibility, and individual freedom, wants to change the privacy laws to track down the 11,900 teens aged 16 and 17 who are not in education, training, or work, and who do not receive a benefit, and put them on a training scheme. Has anyone else spotted the irony?

Prime Minister John Key also told the National Party’s conference yesterday that young people aged 16 or 17 on a benefit, and the 1000 DPB recipients aged 18 will have essential costs such as rent and power paid directly by the government, and will have money for basic living costs like food and clothing loaded on to a payment card. It will not be possible to buy cigarettes or alcohol on the card. Only a smaller discretionary amount will be paid directly into bank accounts.

The rationale for this is that an estimated nine out of 10 teenagers not training or in work go on to a benefit once they turn 18, and teen parents spend on average seven out of 10 years on welfare once they are introduced to the system.

Key is targeting disengaged 16- and 17-year olds. How did they get disengaged? School didn’t suit them? Parents on welfare? Why only one parent? Is mum better off financially to be on her own? Would that mean that the government provides more money for her to raise children on her own?

The slick, stage-managed National Party conference appeared worlds away from disengaged teens, yet quite conceivably a number of those teens would have been the children of those party faithful at the conference. The disengagement starts when the parents are too self-absorbed to be involved in their children’s lives, and could become worse if school does not go too well.

The Nats’ latest move could be seen as a kick from right up at the top, and that is going to disengage a few more teens, especially after the zero alcohol law for teen drivers and the recent crackdown on boy racers. More scapegoating of a vulnerable group. The Key government has a habit of cracking down on everybody else.

Key could have helped by reinstating youth rates that would bring paid work within the reach of 16- to 17-year-olds. Absence of youth rates prices teens off the job market. Obvious economic illiteracy by numerous politicians, who are either too dim to understand the problem, or have their own fixed beliefs.

Key puts a lot of faith in community and other organisations that will be funded by the government to provide a transitions service that can arrange access to social services like drug and alcohol or counselling services. This creates a business opportunity for these hand-holding social service agencies, that regularly appear in the news for receiving funding for non-existent clients.

Training schemes are demoralising. I’ve seen a person go through three years of computer training on such a scheme and the best he could get at the end of it was a few hours of part time work at a school.

Direct payments of rent from Work and Income work well for both parties, although Work and Income staff members have been very reluctant to set these payments up. And while a pre-loaded card for groceries that cannot be used for liquor or cigarettes may be appropriate for drinkers and smokers, addicts will always find a way to circumvent it, and it is an insult to provide such a card for non-addicts.

Key says that this is the first of a number of moves, so I hope his next steps are better thought out. What is really needed for these young, disengaged people is a job, someone to encourage them to stick at it every day, their own money to save or spend as they choose so they can grow in independence, and access to addiction services if needed.

Above all, keep them out of the government system, because once in the system, they’re dependent for life.


Ray said...
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Good comments.
However, the oft made comment that one of the main things stopping employers taking on young staff is the so called minimum wage. If employers could pay "youth rates" they would employ more. I suggest that any business that operates so frugally that the difference between youth rates and the minimum wage would likely break them probably shouldn't be in business or looking at other ways is improve margins.

Paul King said...
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Would the introduction of youth rates displace those on minimum wage with cheaper workers as often as it creates new employment? More people should be employed overall, but low skilled workers would become less employable with age in roles where skills=value do not increase significantly as a result of that type of employment?

Anonymous said...
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I don't really give a shit about poor bludgers to lazy to work: the biggest problem in NZ's welfare "system" is welfare - stop that and the problem of welfare dependency will simply go away.

The two comments about do nothing but point out the problem isn't the lack or otherwise of youth rates: the problem is the minimum wage (and the employment "relations" act and the various employment related sections of the crimes act). Get rid of those, and you'll also get rid of unemployment.

Welfare creates welfare bludgers. Employment law creates unemployment. It really is that simple.

R Cressy said...
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Anonymous show your name or shut up.

The problem of youth unemployment could be that it is not the problem but just a symptom of deeper issues.

Capitalisms 3 percent or bust growth model may be the cause or it could be that the unemployed are just wastage or excess in our efficient economy. Low unemployment in the past would have been due to a low population mining cheap resources and exporting them as well as building the country up as the population expanded.

Our economy has slowed as access to commodity resources has slowed. The fish stocks are low, land is not cheap and although farming is still expanding and mining may increase technology means far less people are required. Quite simply for the economy we choose to run we have to many people.

To remove welfare and the minimum wage and think this would solve the problem is to forget why these things were introduced to start with. A radical socialist would love you to do this.

A better idea would be a proper education system geared to the needs of the children and society not just the needs of the educators as at present. We still need to move away from commodities as this leads to a slow decline in demand for labour to meet the growth everyone expects.

I would also like to think that we realise we are a community of people and not some isolated individuals moving in a container. As a community we could say that no person will be unemployed unless they choose and actually find work for those with out. I think it's called work for the dole.

If you want to ban something ban unemployment.

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