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Home / Politics

<i>John Armstrong</i>: Labour jumping at ghosts in the mirror

By John Armstrong
NZ Herald·
15 Aug, 2008 05:00 PM6 mins to read

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Opinion by

KEY POINTS:

If - as Labour so vociferously argues - National's new welfare policy is a return to that party's punitive policies of the 1990s, then Labour has some serious explaining to do.

Labour argues its mechanisms for getting beneficiaries back into the workforce involve far more carrot and much
less stick than National's.

However, starting with its Jobs Jolt programme in 2003, Labour has imposed more and more "work focused" obligations on beneficiaries, most recently with the passing of the Social Security Amendment Act.

With the addition of Work and Income's adoption of "intensive case management" of individual beneficiaries, the dividing line between the two major parties has blurred on benefit policy, most notably for those on the unemployment benefit.

Sometimes in politics though, it suits everyone to pretend they are very different from one another.

John Key and his colleagues were happy with the "National talks tough on welfare" headlines that ran counter to what is a pretty moderate policy by National's previous standards. Having adopted Labour's stance on so many other issues, National needs something by way of differentiation.

It did not want to be accused of being "soft" on beneficiaries. But neither did it want to be seen as being too harsh, given its courtship of middle-ground voters.

National believes it has some leeway because it thinks that audience is now more receptive to more pressure being put on beneficiaries - including sole parents - to find work.

If so, Labour has misread voters by opting for the "back to the '90s" line of attack. The clever, but braver option would have been to outflank National by saying it was already doing much of what National intended.

Labour, however, is consumed with slapping the "hidden agenda" label on Key and company. That tactic does not work if National's agenda is the same as Labour's.

Key is countering the hidden agenda charge bit by bit with trust-building promises. The first was his promise to resign as prime minister if National alters state-funded superannuation. His latest assurance is to promise to take a bill to Parliament to make it mandatory on governments to inflation-adjust benefit rates each April. This is code for saying National will not be repeating Ruth Richardson's 1990 benefit cuts.

Likewise his belief in and "personal commitment" to the welfare state - made in the week that Labour was marking the 70th anniversary of the groundbreaking legislation underpinning it. Key's endorsement flows from his state house upbringing. But such a hand-on-heart declaration from a National leader would have been unthinkable just a short time ago.

On top of these assurances, Key could not cut benefits even if he wanted to. MMP has put paid to such unilateral acts by one party.

This makes a nonsense of Labour's scaremongering. But there seems to be little recognition of this rather large obstacle. So Labour keeps hammering the fear factor.

Ruth Dyson, replying for the Government as the Minister of Social Development, slammed National's plan to force sole parents with children six years or older and who are on the domestic purposes benefit to work or train part-time, saying it would have "devastating effects on the young and vulnerable".

Tell that to Gordon Brown. Britain's Labour Government has deemed that from this October lone parents with a youngest child aged 12 or over will no longer be automatically entitled to income support and will be expected to look for suitable work. The age limit drops to 10 and then seven over the following two years.

National's new policy covering sole parents is more moderate than its 2005 version. It has quietly dropped the requirement that the parent look for full-time work when the child turns 14.

But the big test - and one National shows little evidence of passing - will be whether there is adequate childcare available for sole parents who go out to work. Without that provision, the policy is essentially window-dressing.

Also quietly dropped from the latest policy are any dates or targets for cutting the overall number of beneficiaries, not just those getting the unemployment benefit - an admission that is a tougher task than National had previously suggested.

The policy will make only a tiny dent by imposing part-time work obligations on those on the sickness or invalids benefit deemed to be able to work part-time. That is a notable point of difference. Labour is not work-testing these beneficiaries, although they are required to produce personal plans on how they intend getting back into the work force unless specifically exempted as too ill or disabled.

Labour has instead reinforced work-test obligations elsewhere by making applicants for the unemployment benefit undertake activities which enhance their prospect of getting a job.

Labour likes to talk about incentives - such as the in-work payment income top-up for low income families in jobs - while National stresses beneficiary obligations. But Labour's incentives have become obligations because it is increasingly difficult for beneficiaries to opt out of looking for a job or training without suffering sanctions, such as suspension of the benefit.

All this points to an emerging consensus on welfare-to-work policy even though neither party would admit it. Both face the same pressures - pressure to make savings in the huge sums spent on benefits, and, economic growth stalled by labour shortages.

These factors saw the Labour Party undergo a marked shift in thinking during Steve Maharey's tenure as Social Development minister which has seen it adopt a "tough love" sort of approach to getting beneficiaries back to work. It just doesn't make a lot of noise about it.

National has undergone a shift in the other direction. Its prescription for radical welfare reform in the 1990s gave it an image of cold-heartedness which has taken it a long time to dispel.

It has also had to adapt to MMP. It has worked out that reform at a breakneck pace is impossible when you are running a minority or coalition government.

Its welfare policy is an apt illustration. While Act and NZ First would support its contents, United Future's Peter Dunne warned National's policy risked being overly punitive and harsh in practice if "hardliners" ended up implementing it.

However, it is the Maori Party which National wants to keep sweet. While that party wants policies which build Maori self-esteem and self-reliance, its MPs could not countenance a wholesale attack on beneficiaries given the over-representation of Maori in the benefit statistics.

That would only drive Maori Party voters back into Labour's hands.

It is another reason why National's welfare benefit policy merely builds on Labour's model - rather than flagging yet another restructuring of the welfare bureaucracy and its services.

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