Another call for bigger and better benefits

Two academics have corroborated in an article published in today's NZ Herald entitled, Crisis may just be starting for poor. It continues from the anti-child poverty activity generated earlier in the week by the Paediatric Society report into the social health of New Zealand children.

...children exposed to low family income in the early years, in addition to experiencing higher hospital admissions and mortality in the short term, also have worse long-term results.

What they should have added then, is, that children on low incomes from benefits do even worse than children on low income from work. Ministry of Social Development research found;

Standard of living data show that poor children reliant on government transfers are more likely to be subject to restrictions in key items of consumption than are poor children in families with market income. The results demonstrate that there is considerable variation in the living standards of those below the poverty threshold, and suggest that poor children in families with government transfers as the main income source are a particularly vulnerable group and warrant a policy focus that recognises their multiple sources of disadvantage.


It follows then that the focus should be on work over benefit reliance. But no. Although the writers do not specifically spell it out, what they want is benefit rates to rise. In particular the In Work payment to be extended to parents who do not work.

"...the numbers moving off the DPB, also a low-replacement-rate benefit, are falling too."

The DPB is not, by international standards, a low replacement benefit. In 2002*, for a single parent with two children the long-term replacement rate was 79 percent whereas the OECD average was only 69 percent. And there is no time limit on uptake. This results in NZ having one of the lowest single mother employment rates in the OECD, averaging 47% through 2009. According to the OECD;

Sole parents have one of the highest rates of joblessness in the OECD. The disparity in employment rates between sole parents and other mothers is higher than in any other Member country.

Paula Bennett was right when she recently described NZ's welfare system as "generous compared to many other countries". That applies not only the how much is paid but to the period of entitlement - indefinite.

The effects of the recession may be prolonged for certain groups. That is true. But it is because the benefit system allows too many in, too easily and for too long.

*Since then there have been annual CPI increases and upward adjustments to family support/tax credits.