Parliament makes progress in disestablishing the Māori Health Authority, alleged Sydney killer reveals location of missing couple and new research paints a worrisome picture of our financial outlook in the latest NZ Herald headlines. Video / NZ Herald
OPINION
Two shocking stats were released last week.
After six years of Labour, the number of children in material hardship is higher than when Labour came to office. The total number of people on Jobseeker has reached 189,000.
These statistics decide the economic debate: Is the way to lift peopleout of poverty to redistribute wealth or is it to have a strong economy?
Labour engaged in massive wealth redistribution. Labour collected record tax revenues by letting inflation take taxpayers into a higher tax bracket. Labour then redistributed using the welfare system.
Max Rashbrooke, senior research fellow at Victoria University, says, “the previous Labour-led government poured an extra $16.5 billion into welfare, carefully delivered in instalments so as not to alarm the middle classes. The core unemployment benefit rose from $215 a week to $340. Even after adjusting for inflation and higher rents, the average beneficiary’s income grew by 43 per cent”.
The result is more children in material hardship.
Using the same statistical measure under National in the four years before Labour took office, 60,000 children were lifted out of material hardship.
Christopher Luxon is correct. The best way to reduce poverty is to have a strong economy. A rising tide lifts all boats. We will never eliminate poverty by making increasing numbers dependent on the state.
The left is claiming that Labour did not redistribute enough. If a future government was to confiscate all the wealth of our few billionaires, assuming they stayed to be robbed, it would only fund the government for a few weeks.
The Australian Labor Party is the most successful Labour party in the world. After the crushing 1975 defeat, its advice to the Labour caucus I belonged to in 1975 was Labour would never be elected government until we had economic credibility. It is still good advice.
Just as Labour could not out-promise Social Credit who pledged to print money, Labour cannot out-promise the Greens and Te Pāti Māori who say the rich will pay.
Today, no possible wealth tax enables the 2,297,000 in fulltime employment and the 525,000 part-timers to carry the 378,711 on benefits plus the 880,000 on superannuation.
Labour’s deputy leader Carmel Sepuloni still does not get it. She said on TV last week that Labour had increased benefits and blamed the cost-of-living crisis for the rise in child poverty as if her government had no responsibility for inflation. At the time this columnist warned that printing money always leads to inflation and inflation hurts the poor the most.
Louise Upston, the social welfare minister, attributes the increase in Jobseeker numbers of 70,000 to Labour’s reluctance to sanction those who refused to take suitable work.
Labour leader Chris Hipkins and deputy leader Carmel Sepuloni. Photo / Hagen Hopkins
Sepuloni says sanctions do not work, citing a “Welfare Expert Advisory Group” which says, “sanctions are problematic”.
Sanctions do have a role, but sanctions alone will not get the 189,000 Jobseekers into employment.
Work and Income says around 80,000 on the Jobseeker have disabilities that mean they are “not job ready”.
I suspect that National’s proposed job coaches will have limited success.
I have cited two young Jobseekers I know. They tried kiwifruit picking for three days. With no sanction for quitting, they decided they would stay on the benefit. Getting up early for work was too difficult.
They did have a job cleaning before their uncle who was their driver went to jail.
They tell me their ambition is to have a job so they can own a car.
Maybe it is the carrot to get young Jobseekers into work.
The Howard League for Penal Reform has had great success in getting ex-prisoners into work. The league says that 84 per cent of all entry level jobs effectively require a driver’s licence.
Most convicts come out of jail without a licence. The league has a driver’s licence course, helps ex-cons apply for a birth certificate and provides a legal car for the test. Once equipped with a driver’s licence, nearly all get a job.
The league has another programme for advanced licences such as forklift and heavy vehicles. These licence holders get well-paid jobs immediately.
Work and Income knows that not having a driver’s licence is a barrier to employment. It has contracted driver licence programmes.
Work and Income pays for the number who sat the driver’s licence not the number who passed. It is as silly as paying schools for the number of pupils they enrol not the number they teach.
If they had a driver’s licence the lives of those two young, failed kiwifruit pickers would be transformed.
Among the minister’s emails that she has yet to respond to is one from the Howard League offering the Government its scheme.
Richard Prebble is a former leader of the Act Party and a former member of the Labour Party.
