Benefit cuts here to stay, author tells forum

University of Otago politics lecturer Dr Bryce Edwards holds a copy of Inequality: A New Zealand Crisis, while in conversation with its editor, Max Rashbrooke, yesterday. Photo by Craig Baxter.
University of Otago politics lecturer Dr Bryce Edwards holds a copy of Inequality: A New Zealand Crisis, while in conversation with its editor, Max Rashbrooke, yesterday. Photo by Craig Baxter.
Public opposition to increasing benefit levels means no political party is likely to reverse the cuts that did most to contribute to income inequality, Max Rashbrooke, the editor of a book on the subject, says.

Mr Rashbrooke was participating in a University of Otago election year ''vote chat'' forum filmed in Dunedin yesterday with politics lecturer Dr Bryce Edwards.

Inequality: A New Zealand Crisis was published last year and features different writers on the topic of income inequality.

Income inequality rose in the 1980s and 1990s. Since then, it had not moved greatly, and at some points slightly declined. Top income earners were hit by the 2008 financial crisis, but Mr Rashbrooke believed there was a pick-up in their incomes from 2012 onwards, which had not shown up yet in official data yet.

New Zealand used to have income inequality levels similar to those of Scandinavian countries, where the top 10% of earners had about five times as much as the bottom 10%. Now, in New Zealand, the top 10% had up to 10 times as much as the bottom 10%.

More equal countries had fewer social problems and higher economic growth. The effects permeated all levels of society, not just those at the top or bottom, and in more equal countries the ability of the very rich to influence laws and policies was constrained.

Asked to name the biggest cause of increased inequality, Mr Rashbrooke cited the early 1990s benefit cuts. However, they were unlikely to be reversed, because public opinion weighed against giving beneficiaries more money. Likewise, reversing the big 1980s tax cuts on the wealthy depended on what was ''feasible'' politically, in terms of public opinion. Constraining the ability to collectively bargain for higher wages had also increased inequality.

Mr Rashbrooke emphasised he was not advocating particular solutions. Declining to state a political party preference, he said he was a journalist, but also disclosed he was working for the Green Party on a short-term basis to help formulate its inequality election policy.

He would also work for the National Party if requested. It was wrong to assume income inequality could not fall under National, he said, pointing to the Keith Holyoake era when top earners saw their share of income fall.

Some ideas about countering inequality cut across the political spectrum. An example was the universal basic income idea, which was supported by the late right-wing economist Milton Friedman, but also by many people on the left. A universal income would give everyone in society a basic wage, unaffected by other income streams.

- eileen.goodwin@odt.co.nz

Why work?


"If we increase benefits and ensure everyone recieves a universal income then where is the incentive to work?"
A good question, Max_Power. At present the incentives are many, one of them being the need or desire for more money than WINZ provides. But that is only part of the answer. What about the people who have reached retirement age, or win the lottery, or have earned or inherited enough money to quit work and live comfortably? Why do people want to work when they don't have to?
There are, clearly, not enough jobs to go around. What is the usual procedure when something desirable and deserved by all is in short supply? Rationing, quotas, allocation of the desirable thing to those who need it most. So how about changing our view of work-for-pay as something that everyone should do, and as a society be grateful to those who voluntarily step out of the workforce - give them enough money to live on with dignity, because they are leaving the paid jobs for those who really need them.
Have you seen interviews with long-time unemployed, who at last find a job? And "undesirable" people e.g. ex-prisoners who have been given a chance by an employer? Their appreciation of the chance to work for pay, to have something purposeful to do, to have workmates and payday and structure, something to get up for, respect and self-respect, these are powerful incentives for many people, even if they are doing "lowly" work . Others take pride in what they can achieve in their jobs, they see good things being created, customers satisfied, problems solved. They get positive feedback, challenges, if they demonstrate excellence and effort they can advance in status and opportunities as well as income.
Those who opt out of the paid workforce but are not idle gormless types by nature would fill their time productively because that is the nature of the average human. So what is the person with 24/7 free time going to do? According to their interests and talents - volunteer! Get involved! Go for walks carrying a bag for rubbish and pick up the debris in the town belt. Help old and sick and disabled people. Read to school children at lunch time to encourage them to enjoy books. Help others with their gardens, process and distribute the produce when there is more than the garden-owner needs.
For the price of money that's a lot of community richness. There may be other reasons why paid work should become optional, so I will be curious to see other people's views and reasons. [Abridged]

 

It is as easy as changing the system

What needs to happen is the retirement age needs to gradually be reduced until it frees up jobs for the young. This could be optional for those that are willing and able to continue working. Most males get very little retirement after working all of their life and due to the physical nature of many jobs, are worn out.

It will then get to a point where the young and lazy have no excuse for not getting a job and the unemployment benefit can be cancelled.

It's much better to have the elderly sitting at home enjoying their hard worked for pension rather than having the young and troublesome sitting around getting up to mischief. 

Ever been on a benefit?

Really? Keith Holyoake? When was that? Not this century. I would ask if any of those commenting have ever been on a benefit? Its a humbling experience - maybe you should try it. Poking into every aspect of your life. Having to tell your story, cap in hand, again and again to new case managers. Secondary tax!  Courses! It's an industry on its own. Those in goverment are the biggest beneficiaries in the country, milking it for all its worth. Free housing, travel, cars, security, retirement and golden handshakes. Another industry. What they take in one week is enough to keep one of these families all year. But sure, let's keep them down - that's how you run a country. 

It's easy - just change the system


"You make it harder each time to stay on the benefit by getting the clients to complete tasks such as contacting x number of businesses, completing courses, doing x number of hours volunteer work etc."

The requirement to apply for x-number of jobs was dropped after businesses got sick of their time being wasted by having to tick-box for applicants turning up on their doorsteps,  trying to satisfy WINZ demands for proof they had applied for jobs, although the companies had no vacancies.  When there is no job there is no job.  I think it was this nonsense requirement that cut the number of firms that advertised their own unskilled and semi-skilled jobs, and they used agencies to filter out the unsuitable, sending only the best to the employers.

Compulsory courses provide quite well paid employment - for the course providers.  Courses for jobs that do not exist are a way of taking up beneficiaries' time and making it look as if something useful is being done.  How many of these courses actually result in real, full-time jobs on wages a person can live on, is something that could be looked at by an investigative reporter. These things need to be examined periodically to check whether they are worth the taxpayers' money, or if they exist mainly to make the department and the Minister look good.

Compulsory "voluntary" work is all very well, but someone has to organise the work, provide the tools, supervise the workers - and find jobs that do not take away the paid work that people and businesses rely on. Simple answers to complex problems, eh chazj? 

 

The New Benefit Fit

Am I not with The Programme? I thought benefit payments were now The Job Seeker Allowance, reduced if beneficiaries fail to comply. Raising benefit levels does not affect a compulsive incentive to seek work. A Treasury driven Market also requires a permanent pool of unemployed to restrain wages.

Training for work

Max Power: If we had a govenment who built employment instead of destroying it we may have enought real jobs for people not to need training for work schemes. We also need to address corperate welfare, tax increases for the rich, asset sales and the very real growing inequality in New Zealand society.

 

 

 

 

Change the benefit system

Change the benefit system from the current system to one of a restricted time limit. When you first go on the benefit you would get full minimum wage per week for 6 months, unless you find a job within that period. Then at the end of the six months, the benefit would be reduced to current levels or stopped unless you meet criteria based on location, situation, kids, medical conditions etc. You make it harder each time to stay on the benefit by getting the clients to complete tasks such as contacting x number of businesses, completing courses, doing x number of hours volunteer work etc. If they don't do that then their benefit stops - simple as that.

A benefit system that is based on a financial payment that is half the minimum wage is counter-productive and restricts people to living well below the poverty line, while continuing to expect people to meet work requirements to continue the financial support.

Another point: return Winz to the old system where case managers work proactively with the client to help them find work. At present there is no help at all from Winz. They sign you up and ring you once in a while, but pretty much wash their hands of you unless it's review time or they need to contact you to complete a criteria. 

The benefit system needs to be supportive, not a hinderance or counter-productive. 

Benefit bashing

Nice benefit bashing Max. Simplistic, fact-free and loaded with prejudice.

Training's all you need

"If you can't get a job why not take up one of the many free training opportunities that will lead to a job."  Thanks, Max_Power. You're onto it.  For the sake of those who already have diplomas, certificates and  degrees, who have trained - clearly for the wrong careers - which free training opportunities would you recommend?  Shortages in IT are not for the relatively low-skill equivalent of data entry; medical specialties and trades seem to all be for people with advanced education/training, from what I have seen in the "wanted" advts, and these are not free, nor is it free to live while training to become, say, an anaesthetist.  So further information would, I am sure, be gratefully received by those recently graduated nurses and others who have not been able to find jobs.

Where is the incentive to work?

If we increase benefits and ensure everyone recieves a universal income then where is the incentive to work? Here's a novel idea, if you are on a benefit and struggling look for a job. If you can't get a job why not take up one of the many free training opportunities that will lead to a job.