Tuesday, April 29, 2008

Media Release

CPAG AT LOGGERHEADS WITH OECD

Tuesday, April 29, 2008

The latest Child Poverty Action Group report has slammed work-first policies as discriminating against children of beneficiaries and 'insufficient to eliminate child poverty'.

Welfare commentator Lindsay Mitchell says the CPAG wants child poverty solved through higher benefits. "This ignores international research* that shows an increase in benefit payment results in increased rates of sole motherhood and subsequent benefit uptake."

The group states that, 'generous welfare need not result in a poverty trap...' . According to Mitchell, however, "This is exactly what generous benefits do already. The OECD showed out of 23 countries New Zealand has the third highest sole parent benefit payment at 54.8 percent of the median income. Because our benefits are not time-limited they draw young and unskilled women into many years of dependency. As many of half of those sole parents currently on welfare started there as teenagers. "

"The CPAG acknowledges that the vast majority of children in poverty are living in one-parent welfare dependent homes yet reject work as the best way to reduce child poverty. This puts them in direct conflict with the OECD. In 2007 , on the back of extensive international research** exploring the comparative effectiveness of using benefits or work to reduce child poverty, the OECD recommended to New Zealand 'reforms to reduce joblessness among families with children should be a priority.' Sweden, the most effective country at reducing child poverty, has a sole mother employment rate almost 60 percent higher than New Zealand."

Mitchell concludes, "It is the availability of welfare that is central to the child poverty problem - not the availability of work. The solution does not lie in simply giving people more money. As a strategy this has already proved extremely unsuccessful."

Lindsay Mitchell
Welfare commentator
ph/fx 04 562 7944

* The Effect of Benefits on Single Motherhood in Europe, Libertad Gonzalez, August 2006
**What Works Best in Reducing Child Poverty: A Benefit or Work Strategy?, Peter Whiteford and Willem Adema, OECD, 2007

4 comments:

Anonymous said...

I can't believe you're arguing that we should follow the swedish welfare model?

But that seems to be what you're saying.
Frankly, even if we wanted to, we just couldn't afford it. We lost 1000 jobs last week in just two businesses, and will lose another 1000 this week in small businesses, with 500 people, leaving to go to Australia where they will receive absolutely no state benefits

The best example of solving this problem is of course the US (although the leftists refuse to admit it) and the problem is solved simply by not having any such welfare benefits in many states, and using food stamps and "draconian" time limits in the rest.

In NZ, all classes of government spending consume 50% of our GDP. In Ireland it is 25% and in the US about 15%. That explains why, in NZ, poverty is spiraling out of control, why Ireland is holding steady, and why the US is the only "Western" country to compete economically with China.

Adopt the Swedish model? you must be crazy!

Lindsay said...

The only aspect of Sweden I mentioned was the employment rate of sole mothers which is 80 percent to our 50 percent.

In the short term, unless my suggestion of using the current spare caring capacity of those sole parents with just one child to provide childcare for those moving into work is adopted, the government will have to cater in some way for childcare (resource and cost) because low wages will not. That's the reality.

But it wouldn't be a permanent state of affairs because once the DPB was ended, people becoming sole parents would drop off as would the demand for childcare.

Our current level of all government spending is 43 percent of GDP; Ireland's is 34 and the US 36.

Where do you get your figures from?

Anonymous said...

It seems to me that we have a generation (or two) who conciously (or unconciously) figure the benefit in their decision(s) to have children. People see themselves as state pets. True Green(ie)s can see that this is not a good policy... it just aint in the script.

Anonymous said...

employment rate of sole mothers which is 80 percent to our 50 percent.

And how do you think they manage that?

State-controlled, state-mandated child "care" centres, perhaps?

In the short term, unless my suggestion of using the current spare caring capacity of those sole parents with just one child to provide childcare for those moving into work is adopted, the government will have to cater in some way for childcare (resource and cost)

precisely.

In fact, wages commensurate with productivity (our wages are only 10% lower than Aussie, but our productivity is 30% lower and dropping every day) will solve this problem - by making it more affordable to supply childcare, and in general, making it more possible to continue businesses in NZ. Childcare is affordable at $3 per hour; not at $12 (or whatever the minimum wage is now!)



But it wouldn't be a permanent state of affairs because once the DPB was ended, people becoming sole parents would drop off as would the demand for childcare.


You'll have to stop much more than the DBP to do that: effectively stopping all benefits (except the pension I guess), and taking out student "loads" and all the rest.

The aim must be to transfer the burden within the family - which is why a Singapore-style personal responsibility law would be a great innovation for NZ.