Time for emergency measures?

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The media silence on the $2 million dollar Whakamana Tangata report by the Welfare Expert Advisory Group (WEAG) has been staggering. It was given to the government in February and released publicly in early May.  Apart from a few policy wonks, who knows about it, let alone has read it? Unlike the Tax Working Group report there has been no public debate and to date the government has barely acknowledged its existence.

But now at last something  has emerged. The IRD, bless it, has quietly released  its Government tax policy work programme 2019-20.  In it there is a section on Social policy including Government response to the WEAG report.

“This work stream includes policy work on:

the Government’s welfare overhaul work programme including:

    • reform of Working for Families;

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    • child support pass-on; and

    • debt;

  • student loan scheme (non-BT work);

  • KiwiSaver – enhancing Trans-Tasman superannuation portability; and

  • other agency initiatives that impact on the tax or social policy system.

On the Government response to the welfare overhaul, officials are working closely with MSD and other agencies to develop a welfare package. This will take a phased approach given the complexity of the welfare system and the need to balance fiscal prudence with improving wellbeing and other high priority government objectives.”

It is great that the Government intends paying attention at last to the broken welfare system. But has it left its run too late?   Will there be a time- consuming round of consultations for the changes that may eventually proposed? Will the delay mean that welfare reform is going to have to be an election issue? Is that a dangerous path to go down?

In the meantime, while high level secret talks may be taking place in Wellington, there has been very little immediate relief for the 174,000 children and their parents living under the impossibly low 40% after housing costs median income poverty line.   For this group the families package has been clearly inadequate  and the changes for them to come in next April from this year’s budget, are just miniscule.

The foodbanks are saying they are overwhelmed with demand, in spite of government being kinder with supplementary assistance and hardship grants.  The Auckland City Mission has had a 45% jump in the number of food parcels given out over the last year. The medical world is warning about diseases of poverty:

“Not being able to get to the doctor for scheduled vaccinations is another barrier caused by poverty. Immunisation coverage rates for infants have significantly dropped in the past two years, particularly for infants from severely impoverished households, and particularly tamariki Māori. “ CPAG 2019

Many families in precarious work are already feeling the effects of  the beginning of an economic recession: how much worse will it be by this Christmas?  We can expect that recessionary pressures will exacerbate the already entrenched poverty. One of the best counters the government could make would be a significant emergency package for the worst-off delivered before Christmas.

The government could keep to its long-term plan for future welfare reform while doing some things that will move it immediately in the right direction.  Here are some highly targeted suggestions that would provide a real counter-recessionary boost and reduce the depth of child poverty and family misery.

·         Join up WFF and give the 72.50 a week to all low income families that currently are excluded \ at a cost of $0.5 billion that is a lot of bread and milk).

·         Increase the amount that can be earned on a benefit to 10 hours at the minimum wage, ie  $177 per week.

·         Continue the WEP for all on a benefit-and for those superannuitants getting an Accommodation Supplement for another  6 months- a much needed defacto benefit rise.

So far we have had a reduction in interest rates that is supposed to stimulate more real investment and be good for jobs.  But that outcome relies on investor confidence and that may be rapidly evaporating. Easier loans will no doubt help buoy the property market, and keep share markets afloat, at least for now, but that is no help to the 174,000 children who need help right now.

There is plenty of fiscal space for positive action.  The net debt rule should not be the hold up. One avenue to explore is the immediate suspension of the contributions to the NZ Super Fund. We should not be building this treasure chest for the future with $2 billion annually from working age taxpayers who  won’t see anything back until 2050, and then only a trickle, while today’s low income families go hungry and in poor health with totally inadequate housing.

The most important thing is to act with urgency before an intractable depression-like situation is reached for the worst off families with severe repercussions for them, their children and for society.

 

 

 

4 COMMENTS

  1. I’ve nearly finished my house renovations and this is what I learned.
    If one must repair a house? One must start at the roof and work one’s way down to the foundations. The foundations are the last repair. And it’s wise to remember that the wall linings must go on prior to the electrical wiring and one must always put the undercoats on AFTER the top coats of paint. To get a warm house one must first hose it down inside then smash out all the windows. Everyone knows that.
    No! Wait? That’s our government policy on virtually everything.
    Handing out a few pissy cents here and there after a tangle of bureaucracy has been untangled by $ix figure$ plu$ entitlement$ bureaucracy untanglers is as absurd as the above.
    You really want to make a difference to AO/NZ’s most at risk, and that’s most of us? Then start at the foundations of the dysfunctions that plague us.
    GET.RID.OF.THE.FOREIGN.BANKS.
    Each one of those useless bastards will be sucking out half a billion dollars every six months while our gubbimint wrings its hands about a few million spent on those who voted them in and who pay them. Is that a cruel irony?
    We’re an incredibly lucky few living on beautiful islands rich in real and actual resources and the foreign banksters are allowed, in fact encouraged, to maul us into poverty then keep us there for their pleasures while our government/s sits on it’s soft, pasty little hands.

    Since our investigative journalists are too cowardly or are too well paid (off) to dare to go after our banksters perhaps we need an Australian to come to the rescue?
    Australian investigative journalist Adele Ferguson
    https://www.rnz.co.nz/programmes/the-detail/story/2018708634/banks-behaving-badly

    • Too right. Go after the banks. They make around $1000 profit on every man woman and child in the country. It is an extractive industry and should be subject to a healthy royalty. Call it BANK PROFIT EXPORT TAX. Make the rate 50% that’s $2.5 billion right there for the populations ‘wellbeing’. Of course they would scream capital flight but, really would they leave and go without the other $2.5 billion profit. Not on your nelly.

      Still if it such a scenario was too ballsy for a NZ government to implement then they could simply require 50% of profits be reinvested within the country instead of exported.

  2. We seem to be adding more and more low income people who needs benefits, while having so much labour fruad that other legitimate businesses are going under – bit of a worry – but not fashionable to think about prevention, just ask for more and more money to prop up business that can afford to pay people more but don’t need to due to government subsidies and wonder why drugs and banking in NZ are the most profitable in the world. We have skewed our economy in a direction of highly polluting or socially harmful industries… that are growing rapidly to cater for NZ growing poor, so those industries are wanting more people in poverty and more money to third parties (aka them) to solve it.

    Examples – we find that in spite of 1.4 million in rubbish bags in cash and 1.5 million illegal cigarettes this women is able to afford the services of Marie Dyhrberg QC, the judge found that the person qualified for suppression due to legal hardship. (weird because most people before the courts also suffer from loss of reputation when charges and it effects people they know too, but they don’t get name suppression, only rich ones, aka poor kids are ok to find their parents charged, rich ones get suppression????)

    https://www.stuff.co.nz/national/crime/115014183/cigarette-smuggling-case-defendants-keep-names-secret-to-protect-children-employees

    In spite of working of a parents farm worth 20 million dollars this lady claimed $200k from WINZ and many other benefits while living rent free and working for her family .

    Family’s battle over $20m farm: Grandchildren go to court over land
    https://www.stuff.co.nz/business/farming/114928850/familys-battle-over-20m-farm-grandchildren-go-to-court-over-land

    On of NZ issues is that there are so many ‘poor’ claiming benefits on paper who are not poor due to trusts and other ways to hide benefits, while those who are poor have to share with this growing group of greedies who come to NZ and sign on or adult children who can sign on while having rich parents and not having to work, that have access to a lot of family wealth and free accomodation that the ‘real poor’ can’t access.

    But our laws keep importing paper poor people into NZ and supporting their families and relatives coming with them with benefits that the working and middle class of NZ are paying for while benefits are being drained like super and the health care system.

    Stop the relatives coming into NZ and claiming benefits like free education, health care, super, WFF and WINZ is a start and make it a lot longer before you can start claiming everything for free on top of a bogus job or ‘investment’.

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