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So much for the success of welfare reform

By   /  January 31, 2014  /  20 Comments

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Calculating future welfare costs without looking at the overall picture of government spending suggests the reforms and their imputed savings are more about politics than economics.

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The growing divergence between the numbers officially unemployed and those getting a benefit are highlighted in Mike Treen’s blog Billions of Dollars Stolen From The Unemployed .   Worryingly the evidence around us suggests that a high price is being paid by those who have been excluded from or pushed out of the benefit system, but are not finding work.

When National embarked on a programme of ‘welfare reform’ in 2008 it justified it by raising alarm about the future cost of welfare. It decided to evaluate the success of these reforms, not by whether people’s lives were better, but by contracting a private actuarial firm at great expense to produce actuarial estimates of the future lifetime costs of the welfare system.  Success is trumpeted by the Minister because these lifetime costs are apparently falling.

But what a totally bizarre way to measure success.  Logically, if no one was on benefits the net lifetime costs would be zero.  Utopia for the Minister perhaps but disaster for a humane society.

There are so many things wrong with the actuarial approach.  An earlier report in 2010 had calculated the total future liability of welfare at $ $57 billion. A figure of $47 billion was used by the Welfare Working Group in its 2011 Final Report. Now a different methodology puts future liability at about $71 billion. Clearly calculating future liability is not an exact science, even for the experts.

The latest Taylor and Fry report heralded by Social Development Minister Paula Bennett as proof of the success of welfare reform is 225 pages long without the appendices. While claiming the reduction to $71 billion in 2013 from the 2012 figure of $81 billion was ‘significant’ she also acknowledges that $6 billion of the $10 billion reduction is because of various actuarial and measurement factors – that is, they are not savings at all.

So apparently the remaining $4 billion can be attributed to the success of welfare reform. This might seem like an impressive outcome, but we don’t have any context to assess this figure.  It is not an annual figure, but is the total expected to be spent over today’s beneficiaries lifetimes.  While the government is happy to single out the future liability of working-age beneficiaries, it does not calculate that of other forms of state spending such as for superannuation, or education or health care.

New Zealand Superannuation costs $12 billion per year and dwarfs other welfare payments, and the actuarial cost of NZ Super is a truly frightening number. Even without demographic change, the net present value of a future annual $12 billion a year at a real rate of 2% is around $600 billion in today’s dollars. A growing aged population and ever -increasing longevity blow the figures off the radar screen.

The headline figure of a reduction of $10 billion depends critically on numerous assumptions about future inflation, investment rates, unemployment and state of economy.

Small changes can have a big impact on the final figure. For example, a 1% increase in the unemployment rate increases total future liability by almost 6% or about $5 billion, while a 1% increase in inflation increases total calculated liability by $8 billion. The total liability is also highly sensitive to the discount rate used to bring future costs to today dollars.  Here’s another kicker- the total liability is before tax so the so-called saving to the taxpayer from welfare reform is already overstated on that score.

Conceptually the exercise seems to be asking: what difference does the welfare reform programme itself make, at a cost of half a billion dollars, to the outcomes that would have been achieved any way, given the state of the economy?   But just how are the effects of welfare reform to be separated from the recovery of the economy?  What happens when or if the economy slumps again? Economic downturns are famously unpredictable. How much further does the Minister want her $71 billion lifetime costs to fall to prove her punitive policies are justified?

New Zealand’s use of actuarial costing in welfare is unique, but not in a good way. While such calculations may be of benefit for private insurance policies they have no place in assessing the success of social policies. In the two years to November 2012 over 16,000 beneficiaries with children had benefits halved or cut altogether for not complying with work test requirements. This may save money in the short run but what do we know of the long-term consequences for the children whose meagre support is reduced still further?

The Taylor Fry report admits that the number of beneficiaries depends heavily on the state of the economy. Despite this, there is little serious debate about the need to invest in ensuring that decent work is available for those who want it, or in programmes to assist sole parents and others get a better job through supporting re-training and higher education. Instead, the welfare reforms, and their so-called  future cost  have focused on blaming individuals for their own plight .

Perhaps the government needs to do an actuarial costing on the value of full employment and the benefits of providing the same sort of support to local manufacturing as it provides so willingly to overseas movie producers or yacht races.

Calculating future welfare costs without looking at the overall picture of government spending suggests the reforms and their imputed savings are more about politics than economics. There needs to be a much broader debate around welfare, well-being, the state of the labour market and how we can better plan for our ageing population. The thousands of individuals and families caught in the cross currents of the present shallow discussion deserve better.

 

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About the author

Co-director retirement policy and Research Centre, CPAG management committee

20 Comments

  1. In anticipation of rightwing right wing individuals who’ve set up ‘home’ here on TDB, just a reminder what a certain National Minister said on 29 April 2012;

    “There’s not a job for everyone that would want one right now, or else we wouldn’t have the unemployment figures that we do.” – Paula Bennett

    TVNZ Q+A: Transcript of interview

    http://tvnz.co.nz/q-and-a-news/transcript-paula-bennett-interview-4856860

    The rightwing “reforms” of the late 1980s and 1990s was supposed to create jobs and wealth “trickle down”.

    It did no such thing and instead.

    * jobs were exported overseas to low-wage societies,

    * wealth flowed upwards to the richest people in our society

    * child poverty increased

    * wages failed to keep up with the cost of housing

    * the wage gap with Australia widened

    Of course, neo-liberals complain that the reason for these failures is that the government hasn’t gone far enough with their “reforms”.

    Which is kind of like saying the patient never recovered because the alchemist didn’t leech enough blood out of his body.

    • unsol says:

      Frank the 1980s & 1990s were a long time ago. Yes they have relevance in terms of why the 5th Labour government increased its Welfare spending as much as they did. But they only tell part of the story.
      I am sure the point of the current Welfare reforms are not lost on you left wingers (yes I am a right winger – well, centre right!), but it definitely seems to be ignored: we all know that children don’t do well if their main source of family income is a benefit & further, trapping the middle classes in the web of Working for Families reduces productivity & stifles growth. We all know this and we ALL don’t like it. So what to do?
      The reforms are minuscule in terms of contention & overall impact.
      If we want to see real changes in NZ then we need to have a massive overhaul in the way that we deliver Welfare & the way that people view it.
      But all this aside, the truly valid part of this post is about NZ super – the massive elephant in the room that no one wants to address.
      We have known for decades that the ageing population was going to make NZ super unaffordable yet no one has done anything….except the 5th Labour government who made a last minute dart for the finish line to try & save their bacon.
      Universal Superannuation in a country that has a tiny proportion of nett taxpayers, where most of the ‘taxpayers’ actually rely on welfare (benefits or Working for Families) to make ends meet & thus getting back the same or more than what they put in, is never going to be sustainable. Especially when the biggest proportion of the population is heading towards retirement…and a long one at that. The average person lives for about 20 years after the retire.
      So for me I think a lot of these objections towards the current government is merely down to a case of wanting both the goat & the money. But you can’t have both.
      So we need to rethink things. And we have to honest, courageous & open minded.
      Of course politicians are rarely honest, courageous & open minded so I suspect we will see much of the same regardless of who is in government.
      Meanwhile child poverty – separate to family poverty of course – will continue to increase & our ageing population & subsequent Welfare budget will continue to grow.
      And what then? Bring back 39c in the dollar for anyone earning more than $60K? 50c in the dollar for anyone earning more than $100k? Do you think that would work? Or would it just drive those people overseas and/or stifle productivity even further?
      More importantly do you think that increased welfare – say to the average wage – would stop child poverty? Stop child neglect? Stop people sending their kids to school hungry, making them share urine stained mattresses on the floor?
      Do you think you could match an unemployed person to every job? That if you went up to every unemployed person & offered them a job that they would take it with both hands? That they would happily go where the jobs are – such as Southland whose farming community is having difficulty in getting staff?
      If your answer is yes then I would have to say you are naive.
      Make no mistake I believe that there is a fair case to answer in terms of fair wages & real wages versus the massive increase in the cost of living over the past 15 years, but extreme policies will only see us go backwards, not forwards; every government seems to either spend far too much, or make too many drastic cuts.
      We need to accept that these issues have been building up over many decades of poor government policy so it stands to reason we will need decades to recover.
      The tortoise does win the race.

      • Unsol – I’ve given your post my Thumbs Up. Not because I necessarily agree with your sentiments, but because you put a coherent, intelligent case. You actually posit issues for the reader to think about and expand on, rather than parrot mindless cliches. (And apologies if that sounds patronising. It’s not meant to be.)

        Respect.

        On the points you raise;

        Frank the 1980s & 1990s were a long time ago. Yes they have relevance in terms of why the 5th Labour government increased its Welfare spending as much as they did. But they only tell part of the story

        Yes, the so-called “reforms” happened 30-odd years ago – but they hold great relevance to present day events because,.

        1. It laid the basis for our current socio-economic model,
        2. You can’t see where we’re going if you can’t see where we’ve been (sounds a bit ‘wanky’, but bear with me) and would we want to return to Muldoonism? No, because the past shows us certain mistakes that were made.
        3. The neo-liberal “reforms” also indicates what promises were made; expectations set; and consequences where those policies failed.

        I am sure the point of the current Welfare reforms are not lost on you left wingers

        Indeed not. Welfare “reforms” are a mask for National’s failure in job creation policies. The grand cycleway plan did not create the 4,500 jobs expected. The purchase of rail units from China and Sth Korea sent jobs overseas. The high Kiwi dollar resulted in thousands of jobs lost from the manufacturing/export sector.

        You might think that’s the “market” working – but no. It means that every time a person is employed and creates wealth for a firm – that business benefits. (And pays taxes.)

        When I person loses that job (to, say, overseas firms), not only is the wealth lost to overseas economies – but the State loses tax, and now has to pay the person to survive.

        Profit is privatised; loss is socialised.

        The whole point of National’s welfare “reforms” is not that welfare is “broken” – it ain’t. It’s clearly doing the job meant to; keeping people alive as jobs were lost when the GFC kicked in, pushing unemployment from 3.4% (2005) to 7.2% (2012) according to the HLFS.

        So welfare worked as the label on the tin stated.

        What the Nats are doing is creating the perception that welfare is “broken” because it has “resulted” in high unemployment. This, as you and I both know, is absolute bollocks.

        High unemployment was caused by events originating in Wall St, USA, and not because 95,000 New Zealanders suddenly woke up one morning in 2008;

        “You know what? Bugger working for $60,000 a year. I’d rather live in the lap of luxury on the dole” ($206.46 per week, net).

        – said no one ever.

        Of course, the Nats are vulnerable on this issue. They tried to make it seem that they were Doing Something with the Jobs Summit in Feb 2009; the Broadband Upgrade; and the cycleway. But it simply wasn’t enough.

        Not by a long shot.

        Cutting taxes in 2009 and 2010 resulted in the Nats being hamstrung in what else they could do.

        Plus FTAs and other neo-liberal policies meant that, for example, government couldn’t favour local manufacturers for their procurement (thereby helping manufacturers). That would be “illegal”.

        As a result, the government/Kiwirail bought cheaper trains – but increased unemployment when Hillside Railyard was forced to close (also impacting on downstream services/businesses).

        Profits overseas. Loss socialised to taxpayers.

        So as unemployment rose and the public started to look to the Nats for answers – the government had none, except that old mantra of “leave it to the marketplace”.

        Which was no comfort to the public.

        So, the Nats set about “reforming” welfare – thereby suggesting that ongoing high unemployment was a consequence of welfare being “broken”. Bennet’s suggesting that solo-mothers (but not solo-dads, notice) be sterilised or that solo-mums and their daughters be put on contraception created the impression that solo-mothers (but not solo dads, because , evidently solo-mums breed by parthenogenesis) were reckless “breeders”.

        Add to that forced drug testing (which failed – 22 people out of 8,001 tested positive or refused to do the test), which created the impression that the unemployed were “lazy druggies”.

        Add to that cutting the dole for unemployed with outstanding warrants (such as “kidnappers”!) – creating the impression that the unemployed were all criminals – and that just about completed the “picture” of beneficiaries being (a) lazy (b) druggies (c) crims and (d) reckless breeders, dropping babies like that scene in Monty Python’s “Life of Brian”.

        Thus, yes, we left wingers are acutely aware of the purpose of welfare “reforms”.

        we all know that children don’t do well if their main source of family income is a benefit…

        Let’s change that phrase to read,

        “we all know that children don’t do well if their main source of family income loses their job”

        – and it attains a whole new meaning.

        As I said, I doubt 95,000 kiwis gave up their jobs voluntarily post-2008.

        And what jobs there are, attract hundreds, if not thousands, for each vacancy; http://fmacskasy.wordpress.com/employment-unemployment-fact-sheet-1-queues-for-vacancies/

        trapping the middle classes in the web of Working for Families reduces productivity & stifles growth

        It has been said that WFF is a subsidy for businesses so they don’t have to pay their employees higher wages (thereby leaving more profits to distribute to shareholders, and thus pushing up share-values – Chorus tried that stunt last year).

        The alternative is for middle class families to fall further behind in terms of real incomes.

        The answer is not, as some put it, “higher productivity”. The answer is for workers to be paid fair wages.

        This info-graphic from the NY Times speaks volumes, and whilst it focuses on American stats, I suspect it holds for our country as well; https://www.nytimes.com/imagepages/2011/09/04/opinion/04reich-graphic.html?ref=sunday

        Even as productivity rose, compensation (wages and salaries) failed to keep pace. The wealth created is flowing elsewhere – especially as organised workers’ representatives (Unions) lose the power to negotiate higher wages, because businesses can move their manufacturing off-shore to cheaper-waged societies. (And the taxpayer picks up the tab, yet again.)

        But all this aside, the truly valid part of this post is about NZ super – the massive elephant in the room that no one wants to address.
        We have known for decades that the ageing population was going to make NZ super unaffordable yet no one has done anything….except the 5th Labour government who made a last minute dart for the finish line to try & save their bacon.

        Actually no, the Third Labour Government tried to implement a compulsory superannuation scheme in 1972. This was over-turned by Muldoon in 1975. (Remember the “Dancing Cossacks” advert? That’s what that was all about; http://www.nzhistory.net.nz/media/video/dancing-cossacks )

        So our super-savings scheme was ditched. Our Aussie cuzzies, however, ran with it from 1992 onwards, and they now have about A$1.6 trillion saved up; http://www.deloitte.com/assets/Dcom-Australia/Local%20Assets/Documents/Industries/Financial%20services/Deloitte_Dynamics_of_Superannuation_2013_report.pdf

        Had New Zealanders not fallen for Muldoon’s scaremongering and kept our own super scheme, it would now be worth over $240 billion, according to Brian Gaynor, writing in 2007 – http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10465138

        Instead, we have to make hard decisions because baby-boomers will be nearing retirement and there won’t be the workforce to pay for the billions needed for superannuation and increasing health costs. (Private health insurance is useless for aging people as the premiums are prohibitively expensive.)

        Unless someone comes up with a solution, raising the age to 67 seems inevitable, and Key is simply post-poning the Day of Reckoning (as Muldoon did in 1975).

        And what then? Bring back 39c in the dollar for anyone earning more than $60K? 50c in the dollar for anyone earning more than $100k? Do you think that would work? Or would it just drive those people overseas and/or stifle productivity even further?

        The problem is, we’ve had seven tax cuts (not six as I’ve written earlier) since 1986 – and New Zealanders still expect comprehensive public services.

        If we want good public services, it has to be paid for. Nothing is free (which us Leftists keep saying, and the Right doesn’t seem to listen) and taxation and other revenue (eg; SOE income) are about it.

        Raising income tax can be easily avoided. Too many tax loop-holes and havens around the world; http://www.theguardian.com/business/2012/jul/21/global-elite-tax-offshore-economy

        There are other options which you omitted to mention, such as a Capital Gains Tax and FTT. The latter would probably require international treaties to make effective, but a CGT could be implemented immediately.

        More importantly do you think that increased welfare – say to the average wage – would stop child poverty? Stop child neglect? Stop people sending their kids to school hungry, making them share urine stained mattresses on the floor?

        I think you’ll find that some families that are stressed (Dad and mum home all day; not much money; bills mounting; Bennett on TV constantly remind them they are “lazy druggies”) financially, begin to loose the plot after a while. Financial stress can lead to emotional stress, such as increasing domestic violence, depression, loss of hope…

        So whilst Dad (or Mum) had a job and an income – they were out of the house, causing less inter-personal stress (not in each others faces); interacting with others.

        Then the GFC hits and 95,000 (approx) people end up out of work. Others are under-employed at only a few hours a week.

        The rent/mortgage still has to be paid. Power bills need to be paid; deadlines missed; 10% “penalty” added on. The phone bill needs to be paid, and needs to be maintained, otherwise it’s pretty damn hard to keep in touch with the outside world (and phone prospective employers about vacancies). Kids get sick; medicines now $2 more expensive. Shoes have to be bought – especially for growing, active children. School uniforms bought. School fees paid. Groceries have to be bought (I’ve heard of houses where parents put locks on cupboards to keep kids from getting into the food) – but there is less and less available as other bills have to be paid.

        We keep hearing the cliche that “money won’t solve poverty” – and yet tax cuts were certainly welcomed by those who got them in ’09 and ’10.

        Yes, the truth is that more money does help. If anyone is in doubt, trying living on $206 a week, and give the rest away. After all, “more money won’t help”. Ridiculous, eh?

        Make no mistake I believe that there is a fair case to answer in terms of fair wages & real wages versus the massive increase in the cost of living over the past 15 years, but extreme policies will only see us go backwards, not forwards; every government seems to either spend far too much, or make too many drastic cuts.

        Indeed.

        Having lived through the Muldoon Era; the Lange/Douglas Era. The Richardson “Mother of all Budgets”; the Bolger/Winston Era, the Clark Era… Yup, I’ve seen governments come, and governments go. I’ve heard the promises; the “trickle down”; higher wages, etc.

        All BS.

        ” The 1980s & 1990s were a long time ago” – their effects on our lives are still very much with us.

        I’ve lived long enough (and I’m no aging Time Lord, for sure!) to see where we’ve been, where we are now, and all the bits in between.

        And we’ve gone backwards in so many ways.

        (Ok, lecture time over. Anyone reading this is probably in a deep coma by now…)

        • unsol says:

          Haha thank you Frank! 🙂 I won’t respond to each of the points raised in your fantastic albeit ultra wordy reply (seriously, that is the longest reply I have ever seen….and I am known to write plenty haha!) as we could both argue our respective points until the cows come home. Plus we both would have heard each other’s arguments in one form or another a squillion times.

          And yes I gave you the thumbs up for the same reasons…..acknowledgement of the same goal even if we prefer different ways to get there is always good as it means we prove political debate can avoid resorting to personal insults!

          P.S I will concede on one thing though – whilst I have plenty of views on why the recession hit us as hard as it did & the lack of what I consider to be personal responsibility (whether 2 high incomes facing a redundancy or people on low incomes having more kids), I am very disappointed with the lack of innovation re jobs, research, general productivity.

          There comes a point where we just have to draw a line in the sand & go OK, time to stop going round in circles, what can we do going forward and I feel that this current government has been very timid.

          Even if I didn’t agree with the policies the thing I liked most about Helen was that she was decisive. In fact I consider her to be the best PM NZ ever had….she was just in the wrong party 🙂

          • Cheers, Unsol.

            I must admit, I got carried away on that one. But it’s refreshing to read something that taxes the mind – rather than just annoys/bores me – hence a novella-length reply.

            Interesting when you write,

            “And yes I gave you the thumbs up for the same reasons…..acknowledgement of the same goal even if we prefer different ways to get there is always good as it means we prove political debate can avoid resorting to personal insults!”

            Amen to that!

            Who knows, it may mean not being entrenched in respective views (myself included to be brutally frank *ahem* with you!) and actually coming up with new ideas!

            I’ll keep an eye open for your posts, Unsol. Even if I may or not not agree, your words encourage thinking issues through.

            And on that “love fest” note, gotta get back to work…

      • arbeitslos says:

        Yeah right. As a 51 yr old female, breast cancer survivor with joints wearing out, I’m really going to move to Southland for a farming job!

    • Gosman says:

      We have a lower unemployment rate than nations that follow far more left leaning policies. Take France as an example. They seem to follow pretty much what you think works yet have a massive unemployment problem. Why do you think that is Frank?

  2. unsol says:

    Anyone working one hour per week is automatically considered “employed”.

    Normally I would ask you to quantify that statement Frank however, haggling over how bad our employment is almost as immoral as haggling over child abuse & child poverty statistics.

    The bottom line is in NZ we should zero child abuse & child poverty & have stuff all unemployment – we have a hugely productive economy with a massive farming sector that is booming….well, in dairy at least. There might not be a job for every NZer that wants one, but it is close.

    My problem I find with those who continue to attack the current government’s policies – which are not playing mere semantics in terms of doing things differently to other governments, especially those from the Muldoon, Lange, Bolger/Shitley/Richardson eras – is that they tend to be light on the solutions side. The real solutions that is.

    Welfare does not lower unemployment & neither does crippling businesses with more tax, red tape & general BS – the Clark government certainly tried & some would argue they succeeded however, there was still unemployment, thousands still left for Australia & many businesses just got cunning & found ways to skip on their obligations. Clark et al did the dumbest thing ever when they introduce a new top rate of tax while leaving the door wide open for trusts, LAQC & the ability to claim revenue generating expenses under those entities.

    So we are paying for it now. We had a real opportunity to reverse those previous big 3 evil empires & we didn’t. And no the railway doesn’t count. It cost far more than it was worth & it’s still not worth anything. And sticking the boot in further re the free rent to Toll – the Australian competitor for our very own & successful Mainfreight as well as all the small business transport owners (LG Anderson, Jets, Peter Baker, Freightways etc), was ill-thought out & shortsighted.

  3. Just briefly (I’m on my way out to meet a client),

    Anyone working one hour per week is automatically considered “employed”.

    Normally I would ask you to quantify that statement Frank however, haggling over how bad our employment is almost as immoral as haggling over child abuse & child poverty statistics.

    Fair enough. The source;

    People aged 15 years and over are defined as employed if they worked for one hour or more for pay or profit, or without pay in a family farm, business, or professional practice, or if they had a job but were not at work for some reason.

    2013 Census QuickStats about national highlights
    http://www.stats.govt.nz/Census/2013-census/profile-and-summary-reports/quickstats-about-national-highlights/work.aspx

    And,

    Employed: people in the working-age population who, during the reference week, did one of the following:

    worked for one hour or more for pay or profit in the context of an employee/employer relationship or self-employment

    Household Labour Force Survey: March 2013 quarter
    http://www.stats.govt.nz/browse_for_stats/income-and-work/employment_and_unemployment/HouseholdLabourForceSurvey_HOTPMar13qtr/Definitions.aspx

    The implications of this are obvious; unemployment (or “under-employment, if one prefers), is most likely much higher than is commonly believed.

  4. By the way, Susan – excellent blogpost. Your link to Bennett’s statement here (http://www.msd.govt.nz/about-msd-and-our-work/newsroom/media-releases/2014/taylor-fry-welfare-valuation.html) has comments from her that suggest a separate blogpost all on their own!

    • Susan St John says:

      Thanks Frank
      You are so right. This issue is huge where does one begin?
      The first Taylor-Fry report cost over a $million dollars. I presume we are locked into this farcical exercise each year– or at least until it stops giving them the answer they want

  5. Marc says:

    The mentally and spiritually unenlightened commenters of the types like Gosman and UNSOL do not give a damn, whether the draconian welfare reforms, now using an “investment approach” and actuarial tricks to justify the meanest measures to deal with the most vulnerable in society, do cause serious harm to people’s wellbeing and health.

    I wonder what the true costs are for persons with disability, with illness and especially mental health issues, who now get re-assessed by WINZ trained and paid (biased) “designated doctors” (and soon also by specially outsourced private assessment providers), and who cannot cope, who end up with traumatic life experiences (possibly self harm, physical damage)! Many are now considered to be “fit” to do some work, and told to look for part or full time work, thus competing with fit and healthy. The doctors get told to follow the ideology of one Mansel Aylward from the UK, and his bizarre “research”, who claims many just suffer from simple “illness belief”, not real illness!

    What costs will there be in the form of future health and various social expenses, for sick, disabled, and also sole parents and their kids, who get pressured relentlessly to look for work, that may not even get enough pay to compensate for extra costs for commuting, clothing and so forth?

    Stress is not good for health and causes many illnesses and further damage, so how is the pressuring of them meant to be beneficial and “save” money?

    It can only be so, if those suffering will also be denied future health care. Indeed doctors are now being tied into the agenda, and told to not quickly sign persons off as incapable of working. The Principal Health Advisor of MSD, Dr Bratt, and his mentor Professor Aylward, even claim, that work is “therapeutic”, meaning work in open employment!?

    We are not told the true situation, not given the true figures, as it is all “creative accounting” they use now!

    One needs to look at what is behind it all:

    http://www.aucklandcitymission.org.nz/uploads/file/Calder%20Centre/Sickness%20Benefit%20explanation.pdf

    http://accforum.org/forums/index.php?/topic/15188-medical-and-work-capability-assessments-based-on-the-bps-model-aimed-at-disentiteling-affected-from-welfare-benefits-and-acc-compo/

    It is all about cost saving and reducing welfare claimant numbers, nothing else, whether there are jobs to go to where people live or can reasonably get to, or not.

    Next comes a re-introduction of “poor houses” and of “work houses”, I presume. That maybe on the agenda if the Nats and their ACT lackeys get another term. Think before you vote later this year!!!

    • Intrinsicvalue says:

      Since when was expecting people who are given taxpayers money to attend to certain conditions ‘draconian’? If I borrow money from a bank I am required to honour certain conditions. Taking taxpayers money to support a lifestyle is no different.

      • Marc says:

        Yep, the bank can then, according to your interpretation and “reason”, set any rules it considers “appropriate”, like charging you 30 or even 100 per cent interest per annum, right?!

      • Nic Farra says:

        “A lifestyle” – it has a certain style, I’ll say that much, but it’s scarcely a life.

  6. […] economic recovery actually is. We have seen the manner in which this government manipulates welfare numbers and beneficiaries and I wondered at how the recent clamour to point to a  consumer led retail […]

  7. Andrea says:

    Beware of the unconsidered sound bites.

    “But all this aside, the truly valid part of this post is about NZ super – the massive elephant in the room that no one wants to address.”

    I thought it was ‘trickle down’ in operation.

    The government releases 12 billion or so to a section of the population that mostly spends their ‘enormous largesse’ in their community. Or helps their families in many ways (including kids kicked off benefits, and providing free child care so young people on pitiful incomes can work part time and still see some sense to working i.e. a bit of cash to use.)

    The way this elephant is so often mentioned – well, anyone would think the entire ‘aged population’ skipped off to Great Barrier Island to blow their massive hoards on ferry trips and over-priced lattes.

    If it wasn’t for that same elephant spreading money into the communities there would be fewer tradies, health care practitioners, cafes, and so on.

    Why do people sound so grudging about the only bit of this damned ‘welfare/social security’ train wreck that actually WORKS?

    And, if it is so distasteful to pay people a pension – just where is the activity around the pernicious ageism in the workplace? Or the stingy over-priced and low-quality training available for ‘up-skilling’ to raise our ‘productivity’?

    Plus keeping the tacky money-grabber fingers off people’s patiently-saved nest eggs, and producing an economy that is far more stable. ‘Save for your retirement!’ Yeah, right.

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