Last weekend’s attempt to revivify a government a year out from what looms as being a close election was something trailed as "securing a future for our young people", but which instead has dismayed thousands of teenage jobseekers and their parents.
Prime Minister Christopher Luxon and Social Development and Employment Minister Louise Upston unveiled details of a Budget day proposal plan whereby many young people aged 18 and 19 will no longer be eligible for Jobseeker payments if their parents can support them.
It is difficult to argue against the underlying principle of the government’s announcement: a life spent dependent on welfare is not desirable, and youngsters are far better being in gainful employment — with all the fiscal, social and health benefits that brings — than being home and unproductive on the couch.
That said, their methods for dealing with this seem misplaced, mean-spirited and meagre.
In reverse order, government figures suggested that just over 15,000 18-19-year-olds are on the Jobseeker benefit, and of those about 4300 would be affected by the benefit changes.
That is a very small cohort being smashed by the government sledgehammer and if saving money is a subsidiary motivation for this policy any minuscule economies will likely be shaded by the amount it will cost MSD to administer the revamped scheme.
The policy seems mean-spirited as it is the government’s own economic policies which have, to a large degree, driven the increase in overall unemployment in general and youth unemployment specifically.
It was well-known and understood that a focus solely on reducing inflation would bring with it a rise in joblessness, and all Budget fiscal projections predicted that. It seems unfair for the government then to take what can be argued is punitive action against an age group which struggles through inexperience or lack of training to get a job at the best of times, at a time when sectors such as construction or hospitality — which might hire such workers in better times — are struggling mightily for survival.
The key plank of the policy, that the parents of the affected teenagers will be obliged to offer their offspring financial support if all criteria of a new Parental Assistance Test are met, seems entirely misplaced.
At 18 and older the law considers teenagers to be adults, able to vote, drink by themselves on licensed premises, marry, and enter into contracts. Their parents no longer have any of the rights or responsibilities that come from being their guardian.
Except now they suddenly will, even if their child for all intents and purposes is an independent adult.
Most of the adverse comment regarding the policy change has stemmed from the income level set for when parents will be expected to make a contribution toward supporting their children: about $65,000.
There is some logic to this limit: it is set at an income cut-out point for a couple with children receiving the supported living payment.
But for many New Zealanders a $65,000 income does not mean they are living in the lap of luxury: latest Stats NZ figures estimated the average annual household equivalised disposable income (after tax and transfer payments) at $60,982.
Rents are rising, grocery prices remain high, and the cost of electricity and healthcare is still spiralling upwards. Parents of 18- and 19-year-olds who are doing everything they can to get a job now face another financial cost, one which is arguably an unfair imposition.
The stick of the Jobseeker benefit slashing was balanced with a small carrot: that young people enrolled in MSD’s new community job coaching service could apply for a $1000 payment if they got a job and stayed off the benefit for 12 months.
That is all very well but, again, it is a very measly morsel — especially when compared to the mallet of the parental assistance test.
The government’s intention to encourage people into work is laudable but its small-thinking and paternalistic approach is set to irritate rather than incentivise, and do little to solve the wider problem of rising unemployment.
