Catriona MacLennan: 10 ways to fix NZ's welfare state

Heart-breaking stories of Auckland families living in cars, garages and overcrowded houses demonstrate that our welfare state is broken.

We have the money to house all New Zealanders properly: the fact that we are not doing so is a tragedy, both for the families and for our wider community.

It also shows how far we have moved away from the philosophy and practice of our first welfare legislation.

The Social Security Act 1938 was ground-breaking law - both in New Zealand and internationally. It was based on the simple view that every New Zealand citizen had the right to a reasonable standard of living, and that the community, collectively, was responsible for helping those who could not support themselves.

Prime Minister Michael Joseph Savage said that a new principle was introduced by the act -
"[C]itizens of the Dominion are insuring themselves against the economic hardships that would otherwise follow those natural misfortunes from which no one is immune."

Our current legislation, the Social Security Act 1964, is being rewritten by the Government. It has produced a 446-page bill, which is described as a technical rewrite. In fact, the bill makes policy changes, and also continues the recent philosophy of emphasising sanctions and obligations rather than primarily ensuring that everyone in need receives help.

But the combination of the law rewrite and deep community concern about the plight of needy Aucklanders presents the perfect opportunity to rethink both the spirit and the operation of our welfare law.

Let's return to the simple philosophy of 1938: it is the role and responsibility of the community to help those in need.

We can afford it. Collecting the $1 to $6 billion lost every year in tax evasion and cancelling the proposed $3 billion tax cuts would easily provide enough money to ensure that no Auckland child grows up living in a car.

Here is how we could improve our social welfare law;

1. Delete the purposes and principles sections from the bill and replace them with the statement "The purpose of this act is to ensure all New Zealanders in hardship receive the help they need and it is the responsibility of the Ministry of Social Development to do this."

2. Make the reduction of poverty the aim of social welfare, rather than the current focus on reducing the number of beneficiaries.

3. Write into the bill a recognition of the value of parenting. At present, our welfare system is preoccupied with ensuring as many people as possible enter the paid workforce. This is a short-term approach and fails to take account of the long-term value to the community of parents spending time with their children. In addition, casual, very badly-paid work means that paid work is no longer a guaranteed route out of poverty.

4. Delete section 70A from the bill. This sanctions women who cannot name the fathers of their children by docking their benefits - initially by $22 a week and later by $28. The main people this punishes are actually the women's children. They are already growing up in a financially-deprived household and further reducing the family's meagre income exacerbates that hardship.

5. Require the Ministry of Social Development to provide all beneficiaries with all the assistance to which they are entitled. Currently, people seeking help face major difficulties in obtaining their legal entitlements. Research demonstrates that those accompanied by an advocate have a better chance of receiving assistance. Hundreds of people have queued in recent years to receive help from Auckland Action Against Poverty at "Impacts" in Mangere and elsewhere. Voluntary groups should not have to do the job a government agency is funded to carry out.

6. Delete the phrase "long-term welfare dependency" from the bill. This makes welfare a burden, rather than the responsibility of the community and an investment in the future wellbeing of New Zealanders.

7. Write into law a provision that grants, advances on benefits and other additional assistance are not recoverable by MSD from beneficiaries. If people were not in desperate need, they would not be receiving such help. Requiring them to repay these amounts - as in the case of people staying in Auckland motels at the moment - merely pushes them further into hardship.

8. Stop sending mothers convicted of benefit fraud on the basis of a confusing and inconsistently-applied legal test to jail. As these women are already single parents, sending them to jail has disastrous consequences for their children, who end up deprived of both parents. In addition, if the debt established against them cannot be repaid within two years, it should be written off. That is what happens in other parts of our legal system. Pursuing them for the rest of their lives for debts they cannot repay means they can never improve their families' financial position.

9. Abolish Benefits Review Committees and establish an independent process for reviewing the ministry's decisions.

10. Make benefit rates liveable, rather than keeping them very low to punish those who cannot - for many reasons - either find or perform paid work.

* Submissions on the Social Security Legislation Rewrite Bill close on June 22.

Catriona MacLennan is a barrister and former political reporter.