Carmel Sepuloni has her report. The Welfare Working Group has done its job. Now, the real political work begins. How to support, manage, and generally meet the needs of the 300,000 New Zealanders who rely for their survival on the transfer payments made to them by the State.
The Working Group’s recommendations are admirably clear. The raw quantum of state support needs to rise. The management of beneficiaries needs to become much less punitive and much more facilitative. The most glaring need? For the thousands of New Zealanders in receipt of benefits to be made to feel that they are free and equal citizens: assets of their country – not liabilities.
That’s a tall order.
Quite how Grant Robertson, the Finance Minister, is supposed to materially improve the living standards of the nation’s beneficiaries without, at the same time, breaching his Budget Responsibility Rules (BRR), remains frustratingly vague. The most obvious solution, and the one recommended by the Working Group, is to increase the amount beneficiaries can earn from paid employment before their state-provided income begins to abate. All well and good, but for those in the unfortunate position of not being able to take even the most part-time of jobs, the declining purchasing power of the benefit continues to be a big problem.
Robertson could, of course, cast aside his BRR and make the necessary adjustments to benefit levels. He could also raise the tax rates of the country’s wealthiest citizens to pay for it. Both courses of action would, however, entail breaching the solemn promises which Labour made to the electorate during the 2017 election campaign. They would also undo all of the effort Robertson has put in to reinforcing the notion that he is not a typical, left-wing, “tax-and-spend” finance minister. Fiscal responsibility has been his signature phrase for nearly two years now. It is, therefore, pretty safe to assume that he will not be making anything larger than the normal inflation-driven cost-of-living adjustments to the nation’s social-welfare benefits in this month’s Budget.
Perhaps sensing the absence of political realism in calls for substantial benefit increases, the Working Group has called for a significant re-orientation of the Ministry of Social Development’s (MSD) interactions with its “clients”. Rather than focus its energy on monitoring beneficiaries’ compliance with its rules and regulations, and sanctioning those who fail to meet their “contractual” obligations to the State, MSD is being urged to devote considerably more of its resources towards actively assisting beneficiaries into some form of socially useful – and preferably paid – work.
The current practice is to place the bulk of the responsibility for finding work onto the shoulders of each individual beneficiary. The resulting, confidence-destroying, dispatch of endless (and almost always unsuccessful) applications for employment (most of which are never even acknowledged) accompanied by the constant updating and tweaking of CVs that most of the people doing the actual hiring will never read, constitute two of the most familiar, heart-breaking, and soul-destroying aspects of beneficiary existence.
Of much more practical assistance would be a reassertion of the very earliest objectives of “Labour Departments” around the globe: namely, to act as state-run labour exchanges where the needs of employers and workers could be conveniently matched. This would, obviously, involve a great deal more than simply pinning “positions vacant” cards to a notice-board. Implied in the whole notion of a labour exchange was a large measure of “active” labour market management and planning. Direct state intervention designed to advance not only the interests of employers and employees, but also those of the national economy as a whole.
There is every reason for Robertson to be all over this hands-on approach to moving citizens from welfare to work. He was, after all, the man assigned the task of investigating “The Future of Work” by Labour leader, Jacinda Ardern’s, predecessor, Andrew Little. He knows full well that as artificial intelligence wipes out more-and-more middle-class professional occupations, the whole concept of a “steady, well-paid, nine-to-five job” will become increasingly archaic. The trick, politically, will be to make it possible for the same technological and scientific revolution that is wiping out all these “good” jobs to be harnessed to the task of ensuring that the emerging “gig economy” is both less individually exploitative and more socially beneficial.
It is in this potentially game-changing context that the Ministry of Social Development might finally begin to live up to its name. The expertise it gains in assisting the least qualified and most vulnerable citizens into situations where their strengths can be maximised and their weaknesses worked around will become increasingly useful in a society where the work required to make profits for capitalists will be the preserve of intelligent machines, and the work required to sustain social, cultural and physical environments will be the preserve – and delight – of human-beings.
Potentially, then, the report of the Welfare Working Group could be the political catalyst for precisely the “transformational” government Prime Minister Ardern has been promising since 2017. The sixty-four-thousand-dollar question, politically-speaking, however, is whether or not the Minister of Social Development, Carmel Sepuloni, possesses the imagination and the requisite heft in Cabinet to persuade her colleagues to apply it to Labour’s transformational project. To date, Minister Sepuloni has not impressed as either a visionary or a risk-taker. Indeed, the only firm commitment she has made, vis-à-vis changes to the MSD regime, is to end the sanction attached to a solo mother’s refusal to name the father of her offspring.
This is hardly helpful – aggravating as it does the worst prejudices of conservative New Zealanders against welfare beneficiaries. Ethically dubious, at best, the removal of this sanction will provide the right-wing shock-jocks of commercial radio with endless hours of “benny-bashing” sport. What’s more, many of the social conservatives energetically nodding their heads to these diatribes will be existing or erstwhile Labour supporters. Such people can be enlisted in a pro-social welfare political movement (just as they were, to stunning electoral effect, eighty years ago) but Sepuloni’s promise – which substitutes the state for the biological father of a woman’s child – is hardly the best start!
With an election looming in eighteen months time, the opportunities for initiating transformational change that genuinely addresses the needs of a society which is being reshaped by forces over which voters urgently need to regain some real measure of control are rapidly fading. The Welfare Working Group’s report, like the 300,000 people it has been written about and for, can be seen as an opportunity or a cost. It is to be hoped that Minister Sepuloni has what it takes to make it the former – and not the latter.
Chris Trotter has been writing and commenting professionally about New Zealand politics for more than 30 years. His work may be found at http://bowalleyroad.blogspot.com. He writes a fortnightly column for interest.co.nz.