Monday, June 01, 2020

The Left loathe the concept of the 'deserving' and 'undeserving'

A commentor on Kiwiblog drew attention to a Newsroom article by an Auckland University sociology professor:

Dr Louise Humpage was hoping Covid would help Kiwis better understand how tough it is to live off the benefit, but the newly unemployed are not being treated like main beneficiaries at all...
I became more suspicious of the Government’s intentions when it announced that 35 new unemployment centres would be established across the country, along with an employment service specific to those directly impacted by Covid-19, who are not on a main benefit.
Why? Work and Income already has offices in most towns and cities across New Zealand which focus on finding employment.
Could it be that they are either a) not very good at their job; or b) that the ‘toxic culture’ endemic in these offices is so awful that we couldn’t bear the shame of letting ‘ordinary’ (i.e., working) New Zealanders experience it?

I doubt the 35 new employment centres referred to will be places people walk into. Applications and grants all take place on-line. The new processing centres will be about boosting staff capacity to approve applications and attempt to redeploy workers.

The usual eligibility requirements she refers to as a “toxic culture” have been suspended because of the increased workload in processing new applications. Not because they were unfair.

She writes, “the base rate for the existing Job Seeker Support is $250 a week (before tax – yes, it is taxed) for a single person over 25.” Wrong. It is $250 after tax.

Essentially she wants all benefits paid at the same rate as the temporary Income Relief Payment saying, “a truly brave government would look voters in the eye and say ‘we want to treat all unemployed people, no matter when or how they came to be jobless, with the same dignity and respect that all New Zealanders deserve’.”

There are thousands of beneficiaries who have 1/ never worked 2/ made themselves unemployable through crime and/or drug and alcohol abuse and 3/ have no incentive to work because it pushes up their child support liability and income-related rent. This is the unfortunate reality of the benefit system.

In fact it would be preferable if the system could take more account of ‘deserving’ and ‘undeserving’ – not less, leading to greater fairness for anyone who is genuinely (temporarily or permanently) unemployed through no fault of their own.


alloytoo said...

What we really need is a tax free threshold that kicks in at the minimum wage.

As you do that reduce the benefit to the current after tax level.

The wider the gap between benefits and minimum wage the better.

Lindsay Mitchell said...

$18.90 per hour minimum wage @ 40 hrs = $756

After tax = $643

Current jobseeker benefit rate for single 25 or older = $250 net

For a sole parent = $375

The gap appears large but.... muddied by the accommodation supplement and family tax credits (and other third tier assistance) which can bring the total benefit up to or in excess of $643.

The problem with trying to design a system that incentivises low paid work is the inherent evolved complexity.