Editorial: Key's benefit plan needs the jobs first

John Key. Photo / Getty Images

National governments customarily spend a lot of time worrying about benefit bludgers. This one has been no different, and yesterday it released what John Key described as "a comprehensive reform of the benefit system". The package is not quite that and probably raises as many questions as answers about what the Prime Minister said was an unsustainable situation. Chief among these is the package's emphasis on getting beneficiaries into work at a time when jobs are hard to find. Other parties will doubtless relish the opportunity this provides to focus on the country's unemployment statistics.

The National Party's policy is based on some of the less radical suggestions of Paula Rebstock's Welfare Working Group. Its new system would scrap the old benefit titles and put beneficiaries into three categories, depending on their ability to work. All those now on unemployment and sickness benefits would be placed on a Jobseeker Support Benefit and be required to look for fulltime work. Single parents with children over 14 would go on the same benefit.

Parents on the domestic purposes benefit would get Sole Parent Support until their youngest turned 14. They would be required to undergo work testing when their child turned 1 and would be expected to work part-time when their youngest was 5.

The invalids' benefit would also be axed and those with permanent, severe disabilities would, instead, receive a Supported Living Payment. They would not face work obligations.

National says the changes would get 46,000 people off the benefit, have another 11,000 working part-time, and save $1 billion within four years. That is optimistic. Whatever the rejigging of titles and talk of changed expectations, the number of work-shy beneficiaries has always been overstated. Indeed, the finger of blame could as easily be pointed at the doctors who assess and certify beneficiaries, and who surely bear particular responsibility for the increased number on sickness benefits.

The effectiveness of National's policy would also depend on the attitude of those overseeing the benefits. They should certainly be encouraged to more actively manage long-term beneficiaries. But this has been a staple policy in the past, especially of Labour governments. And when jobs are scarce, beneficiaries are, understandably, unlikely to be pushed too hard.

To its credit, National has rejected some of the harsher measures proposed by the Rebstock working group. It has recognised, for example, that mothers should have the option of staying at home to look after pre-school children. Sole parents will, therefore, be expected to work part-time once their youngest is 5 and at school, not 3 as recommended by the working group.

National is prepared, however, to be harsh on solo mothers who are judged to have no inclination to work and have another child so they can continue as long-term beneficiaries. Such women will receive only a 12-month exemption from their existing work obligations.

Mr Key is right to suggest that change is needed. One in eight people aged between 18 and 64 is on some form of main benefit, at an annual cost of $8 billion. National's package would be convincing, however, only if it were accompanied by one creating jobs. So far, it has offered plans for a new wage for 16- and 17-year-olds, which aims to get more teenagers into a new job, and more flexible arrangements for employers.

That will hardly prove sufficient given the numbers that National says will be coming off benefits and looking for jobs.

Even if the numbers prove to be rather less, a truly comprehensive revamp of the benefit system will be viable only when the economy is more buoyant and jobs are there for the taking.