The welfare and unemployment tales of two cities

By Simon Collins

Prime-aged unemployment has dropped to just 11 people in booming Tauranga - while an hour away in Rotorua, one in every eight working-aged adults still lives on welfare.

Unemployment benefits being paid in Tauranga have fallen by 93 per cent in four years, from 1718 in June 2004 to 123 last month - of whom only 11 were under age 60, not on training courses and available to work.

In Rotorua there has been a big drop too, but only from 2418 to 810.

The total on unemployment, sickness, invalid or domestic purposes benefits has shrunk to just 7 per cent of the working-aged population in Tauranga, while in Rotorua it has dropped to only 12 per cent - still one in eight.

This is partly a story about diverging local economies. But it is also partly about structural faults in our tax and welfare system and a psychology of chronic welfare that exists as much in growing South Auckland as in Rotorua's Fordlands, which inspired Alan Duff's book Once Were Warriors.

Tauranga has been the country's fastest growing city for 20 years, driven by our ageing population seeking retirement in the sun and by expanding horticulture.

Rotorua, a forestry and tourist town, has stagnated. Jobs were slashed by state forests' corporatisation in the 1980s.

Fordlands widower Bob Stewart, who maintained phone lines for 29 years, was made redundant in 1989 when the Post Office was corporatised.

"I went to the [Waipa timber] mill, but that was killing me and I left after three years," he says. He lives on a sickness benefit with his trainee teacher daughter and her two sons.

Former Plunket worker Petrina Marsh says the jobs that are available require skills which many ex-forestry workers don't have. "A lot of them are lacking the education," she says.

And even if they find a job, it may be so poorly paid that they may be better off on benefits.

"My cousin makes more money than I can working a 40-hour week," says a young woman in the Mitchell Downs Tavern with a cousin on the domestic purposes benefit (DPB).

"She's got two boys who both go to daycare. She has from 10am to 3pm to herself. I'd be better off to go and pop out a couple of kids."

Rimaha Wiringi, now a supermarket manager and spare-time pastor, grew up in a family where people "could work but they won't".

In his early years, he drew the dole while his partner and children got the DPB. "I just said I was not living there but I was."

He grew and sold marijuana and on-sold stolen property such as leather jackets. He also earned $150-$200 a week from undeclared cash-only labouring.

"Even though the Government was only paying me $140 a week, all-up you could easily take home $500-$600 a week. So why work?" he asks.

Penny Mitchell of the iwi social service agency Te Roopu a Iwi o Te Arawa says it is hard to coax people out of this lifestyle into working for perhaps only $25,000-$30,000 a year. "Some of them try and do three jobs to make the money - fruit-picking, cleaning houses and so on. But if you get tax taken off, it's not worth it."

Almost alone among developed countries, New Zealand taxes people from the first dollar earned, starting at 16.2c in the dollar and rising to 22.2c from $183 a week.

If you declare a wage, you also lose 70c off your benefit for every dollar you earn above $80 a week. It doesn't take too many other clawbacks from family support or income-related state house rents to leave you without even the bus fare to get to work.

Turning this around isn't easy. But Tauranga shows that genuine full employment is still possible.

For a start, you can commute from Rotorua to Tauranga as quickly as from one side of Auckland to the other. Work and Income helped to start what is now a fully commercial workers' bus service between the two cities, and still subsidises a bus from Tokoroa to Taupo. Regional Commissioner Carl Crafar is considering a third bus from Whakatane to Tauranga.

Unions are pushing to raise local wages. National Distribution Union organiser Neil Chapman says he is "increasingly finding the minimum wage in non-union jobs. Our struggle is around breaking that low-wage mentality," he says. He has had some success: at a previously non-unionised food processing company, the union won 12-15 per cent pay rises on base hourly rates of $10.25 to $11.60.

Recent increases in family support, and a cut in its clawback rate from 30c to 20c in the dollar, mean most low-income families now keep getting family support when they start working.

But Auckland University economist Susan St John says the $80 income limit on the unemployment benefit, the 70c main benefit clawback and the 15 per cent tax rate up to $183 a week have not been adjusted since 1986. In Australia the first $6000 a year ($115 a week) is tax-free.

For young people, Rotorua is one of 10 places so far with "youth transition services" to help school-leavers into jobs or training. Waiariki Purea Trust, which launched the local scheme on May 1, starts by helping youngsters get their birth certificates, bank accounts and Inland Revenue numbers.

"Everyone goes through a career plan with a professional career planner and talks about the options and what to do," says Laurie Durand, a trust director.

Rotorua District Council runs a similar "Pathways" scheme which has placed 16 cadets on Te Arawa trust farms and provides work experience in tourism, health and social services.

Some argue for a stick as well as a carrot. Penny Mitchell advocates subsidised work schemes to help chronically unemployed families break out of the mindset of idleness, and recruiting some into the Army.

"We have to stumble on those families to help them reintegrate back into something more positive," she says. "They do want to get out of what they are in, but just don't know how to."


Jobs or the dole: Differing takes on the work experience

"There's not much work for us Maoris. You've got to be clued up in the head," says Harry Wilson, enjoying the sun on the family deck overlooking the Ford Block liquor store.

Harry and his father Willie, 68, deliver the Herald around western Rotorua, but he says "hardly anyone" else in the area has paid work.

Willie and his late wife moved into Ford Rd in 1961, with paddocks surrounding their house. He helped build the hydro dams on the Waikato River, then worked at the Waipa timber mill and moonlighted as a bouncer at the Palace Hotel.

Up the road, Shirley Paton moved in with her husband in 1958 and says everyone was working then.

"I don't think the dole was even invented, because there was work around," she says.

Rachel Wilson has the same opinion as her brother Harry. "There's no work around," she says.

Her partner, Nathan Walters, doesn't work because his foot was run over by a car when he was 9.

Some of the family have moved to Australia for work. Brisbane-born baby Lia Bennett, 11 months, was visiting when the Herald called this month.

Other local Maori say that those who can't find work in Rotorua are "lazy".

"It's so easy to get a job," says a mother who has worked all her adult life and now has adult children who work.

"I really disagree with giving them benefits," she says. "If they need food, give them food tokens."

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a2 at 19 Sep 2014 23:56:34 Processing Time: 2047ms