Little ‘transformational’ about Government so far

Jacinda Ardern promoted her Government as being transformational, but apart from transforming Winston Peters and Shane Jones into well funded promoters of their own interests these is not much transforming going on.

Ardern opened her year claiming that this would be her Government’s year of delivery, but what they have delivered so far has been underwhelming.

The just announced welfare ‘reforms’ have been paltry – see Welfare advisory group – 42 recommendations, 3 to be implemented.

Tim Watkin: Government is running out of chances to be ‘transformational’

Strike one: Capital Gains Tax. Strike two: Welfare reform. The Labour-led government is running out of chances to be the “transformational” administration Jacinda Ardern promised in the 2017 election campaign.

Today the Welfare Expert Advisory Group handed the government a radical blueprint to not just tinker with welfare, but – in their words – to make “urgent and fundamental change”.

It was scathing about sanctions against beneficiaries, saying evidence shows they do little but create more harm to those already at the bottom of society. And it recommended a massive 47 percent increase in current benefit levels.

Those would be hugely controversial reforms… or, you could say, transformational. And they are not of the cuff ideas.

The current and previous Children’s Commissioners have urged such substantial benefit increases as the most effective way to tackle child poverty.

What people seldom consider though is that since then wages and salaries have continued to grow. Super, linked to wages, has grown to. But other benefits – with any increases linked to inflation, not wage growth – have not been increased nearly as much. Until, that is, Sir John Key and Bill English famously raised them in 2015. So the gap between work and welfare has grown since the 1990s.

That’s why the report today says, “The level of financial support is now so low that too many New Zealanders are living in desperate situations”.

In sum, the argument in support of this radical prescription is that you can raise abatements here and offer support there, but the best and least bureaucratic way to tackle poverty is to – wait for it – give the poor more money.

So as part of their coalition deal, Labour and the Greens commission this report. They get the transformational advice most of them would have wanted. How do they respond?

Welfare Minister Carmel Sepuloni agrees the welfare system is not working.

Marama Davidson agrees the welfare system is not working.

And then they commit to ignore the report’s big recommendations.

They say no to up to 47 percent benefit increases, preferring “a staged implementation”. The call for “urgent change” is rejected. Remarkably, Ms Davidson has put her quotes into the same press release, tying the Greens to this approach, when they could have been dissenting from the rafters.

The political and institutional reality is that no government can make these changes overnight. But the cold water thrown on this report underlines what we’ve learnt about this government in its handling of tax, its debt level, labour reform and more.

It is not just incremental, it looks timid.

If the Ardern administration wants to be the transformational government she and her allies think they are in their hearts, they are running out of issues.

A lot of transformation has been limited by NZ First, who seem to have got most of what they want while limiting Labour initiatives (like the CGT) and hobbling the Greens.

Much may depend on what the Government come sup with on climate change, the issue Ardern describe as the nuclear free issue of the present time. Announcements on climate change have been delayed months already. There have been further delays, but promises for next week.

RNZ: NZ First voters will be happy with Zero Carbon Bill deal – Peters

New Zealand First leader Winston Peters says his party’s voters will be happy with the deal he’s struck with the Green Party over the Zero Carbon Bill.

Climate Change Minister and Green Party co-leader James Shaw this week delayed the release of two reports from the Interim Climate Change Committee until the government makes a decision on how to respond, which will contribute to the final climate change legislation.

Mr Peters wouldn’t be drawn on what the specifics of the bill are but did give an inch when RNZ asked whether his voters would be happy with the legislation, replying, “yes”.

That won’t be encouraging for those wanting transformative action on climate change.

Mr Peters said he couldn’t comment on when the bill would go to Cabinet because that was a matter for the Prime Minister but he understood it would be “sooner rather than later”.

Asked if it would be on the agenda at Cabinet on Monday, Mr Peters said he couldn’t answer that question.

Ardern and Shaw will have a lot of questions to answer if they fail to measure up on climate change. Their reputations are depending on actual transformation.

The future of the Greens in parliament may well depend on this one.

 

Welfare overhaul announcement ‘imminent’

Jacinda Ardern has said that an announcement on aims to overhaul welfare delivery is ‘imminent’, but it will rely on yet another working group so any decisions are likely to be quite a way down the track.

Some (Greens especially) have proposed a much more generous ‘no questions asked’ welfare payment system.

The Labour-Green confidence and supply agreement stated:

Fair Society

10. Overhaul the welfare system, ensure access to entitlements, remove excessive sanctions and review Working For Families so that everyone has a standard of living and income that enables them to live in dignity and participate in their communities, and lifts children and their families out of poverty.

That is toned down from what Metiria Turei promoted before crashing during last year’s election campaign, in a policy labelled ‘Mending the Safety Net’:

We will:

  • Increase all core benefits by 20 percent
  • Increase the amount people can earn before their benefit is cut
  • Increase the value of Working For Families for all families
  • Create a Working For Families Children’s Credit of $72 a week
  • Remove financial penalties and excessive sanctions for people receiving benefits
  • Reduce the bottom tax rate from 10.5 percent to 9 percent on income under $14,000
  • Introduce a new top tax rate of 40 percent on income over $150,000 per year.
  • Raise the minimum wage to $17.75 in the first year and keep raising it until it’s 66 percent of the average wage.

Our welfare system should provide effective support for people who need it, while they need it. The social safety net should stop families from falling into poverty and guarantee a basic, liveable income. That’s what it means to live in a decent, compassionate society.

Punishing people through benefit sanctions, cuts, and investigations has not worked. Rather than giving people ‘incentives’, it traps them in a cycle of poverty and puts children’s wellbeing at risk. Children suffer when the welfare system punishes their parents, and in the long term, so does society. It is never ok for the government to use poverty or the threat of poverty as a weapon.

The Green Party’s plan will ensure the people on the highest incomes pay their fair share and those that need help are treated with respect and dignity.

That last paragraph looks like code for a major redistribution – one could wonder if it aims at ‘fair share’ being equal share, no matter what work one does or doesn’t do.

Stuff: Welfare overhaul working group details leak out online

Details of the “imminent” Government overhaul of the welfare system have emerged in online job listings.

The job listings show the Government is setting up a welfare overhaul “expert advisory group” supported by a secretariat of officials from different departments.

The listings for a project manager and strategic communications advisor were posted in March of this year on the Ministry of Social Development’s (MSD) website.

In the job description MSD write “the Government has committed, through the Labour/Greens Confidence and Supply Agreement, to overhaul the Welfare System. This work will be led by an independent group of Experts, supported by a Secretariat of officials from MSD, the Treasury and Inland Revenue.”

The listings have emerged as Prime Minister Jacinda Ardern has said an announcement on the welfare overhaul is “imminent”.

Ardern has made clear that some sanctions would remain after the overhaul.

She said a culture change was needed at Work and Income, but acknowledged that “by and large” case managers did a good job.

“Culture change is difficult. We are coming in after nine years of there being an expectation that there be a singular focus on reducing benefit numbers and of course we want people in work, we want people who are seeking work to be able to find work, but I think it has tipped over into a space where it actually denying people who need help the help they need,” Ardern said.

This reform could be a real test of Labour versus Green aims.

Greens want a radical change to generous state assistance as a right and a choice. This may meet some resistance from people who pay tax, but is likely to be supported by those who can’t work, and also by those who don’t want to work.

If I was offered the option of a comfortable income from the Government I would be very tempted to retire early.

We already have sustained high immigration because we don’t have enough New Zealand workers for a number of industries. If we have more of a choice to not work would higher immigration to compensate be acceptable?

Welfare reform is a big and contentious issue.

There is no doubt that the current system has serious flaws and is punitive, but it will be difficult – and potentially very expensive – to make major changes.

For the Greens to get what they want it will involve much more than welfare reform – their wish list would require…

  • welfare reform
  • tax and revenue reform
  • employment reform
  • serious reconsideration of immigration

…and probably more

If it ended up how some indicate they want it too it would involve a radical shift towards virtual socialism.

Targeting policies

One law for all?

One benefit for all?

One job for all?

Or are we moving into a new era? The comfort blanket policies of giving a lot of people benefits and tax credits are very costly and very easy to abuse. Is targeting the biggest problems a better approach?

Obviously some policies should be universal, like most laws, National Super, maternity and infant health benefits. others will get better results – and benefit those that need and deserve the most benefits.

National are drip feeding policies leading in to the election. Two have targeting written all over them.

The Green Paper on Children is suggesting ways of prioritising money and efforts on the most vulnerable children in New Zealand. And now National have announced another target:

Welfare reforms to start with young people

Social Development Minister Paula Bennett today said the National-led Government’s welfare reforms begin with a fresh approach to working with vulnerable and disengaged young people.

Will we see more targeted policies released prior to the election? And, as a National likely, will the targets be dealt with in their next term?