Colin James: Cabinet’s thinker gradually wins over the doubters

Steve Maharey has become one of the Cabinet's most influential ministers. That was unthinkable five years ago.

Maharey has always been the most theoretical minister, a student of "third-way" theory. That was too airy-fairy for Helen Clark, whose politics are a mix of farm-girl practicality and 1970s university social democracy.

Clark's thinking has been gradually infiltrated by Maharey's ideas for welfare. We will see another one today when he launches his prized "single core benefit" to mesh with last year's intricate (too clever?) Working for Families. Stand by for a variant of "asset-based welfare" if Labour gets a third term.

That's welfare. In education, a portfolio area he exited in December, the story is different: avoidable scandals in his tertiary bit (though he told me several times in the past few years he was uneasy about the wananga and asked for audits); avoidable exam shambles in Trevor Mallard's secondary school bit.

How do I know the NCEA shambles was avoidable? I chaired an informal seminar of principals, academics and educationalists in November. A strong theme was an expectation of wide variations in the results. If those people expected a mess before the event, how come the bureaucrats and ministers didn't? The answer is bad management - which, if the anger endures, will spell bad politics for Clark on election day.

Don Brash might have reaped a greater reward from Orewa II by focusing on education, as I suggested here in January, partly with that seminar in mind. Instead, he tickled prejudice in welfare.

By contrast, it is in welfare that Maharey might ultimately prove most useful to a prime minister who wants to command the political centre.

Today's announcement is more managerial than ideological. The "single core benefit" will collapse seven of the current 10 different benefits into one (leaving orphans, unsupported child and independent youth benefits as they are for now) and drastically reduce the 36 add-ons.

There will be one set of benefit rates and eligibility criteria and the focus will be on work for all but the severely impaired. Disabled beneficiaries, now on a higher rate, will get a "premium" which will follow them into work. So, for all beneficiaries, there will be some other add-ons. Because the Cabinet has insisted no one will lose money in the first three years of the new scheme, which begins in 2007, there is a cost: in the tens of millions.

The managerial rationale is simple. Frontline staff spend 70 per cent of their time working out beneficiaries' entitlements, which can change week to week. Maharey and his advisers hope with the simpler single benefit, frontline staff will spend 70 per cent of their time on "case management" - preparing beneficiaries, including sickness and invalid beneficiaries, for work, getting them into work and keeping them there "sustainably".

The aim of a single benefit dates back to Michael Cullen's fond wish when he was welfare minister in 1987-90. But Maharey, whose thinking on this I have tracked here over several years, has added two ideas not current in the 1980s. One is the emphasis on work. The second is his ideological rationale that this is "investment".

Contrast the Brash approach which reckons Maharey is all carrot and no stick and many beneficiaries are malingerers who make a lifestyle off the carrots. Spare the rod and spoil the beneficiary.

Probably most voters would agree. But Katherine Rich would say, if she were still Brash's welfare spokeswoman, that malingering beneficiaries are a minority.

Maharey would add that his staff have found that if they wave a stick, all but a truly dreadful few recognise an "obligation" (another new word for Labour) to work or prepare for work. Just belabouring beneficiaries impoverishes the children.

That's his theory. It sounds like soppy 1970s sociology, killing with kindness.

Yes, but for the emphasis on "work". This has quietly been replacing income support as the raison d'etre of Labour's welfare policy. The Greens' Sue Bradford may gag, but Peter Harris, Cullen's former economic adviser, put it bluntly in a paper last year: "Employment remains the most efficient welfare policy ever invented."

Translate this as: "independence, not dependency". Which takes you back to old Labour, before the 1970s welfare warp. The 1930s rationale was to enable households to be self-sustaining. Work is the key, psychologically and practically.

You get the drift? Okay, here's another one. Maharey has long been taken with "asset-based welfare" - accounts which people themselves manage, to cope with unemployment, education and retraining and superannuation.

The PM used to pooh-pooh that. But Ngai Tahu is planning such a scheme for its members, to end a "dependency culture". And recently Clark has become enamoured of the "ownership society".

Maharey got there half a decade ago: "People do have to have some kind of financial assets. It gives them a stake in society." Sometimes ideas count in the long run.