KEY POINTS:
The important debate about New Zealand's underclass needs discussion in the light of what we know about poverty, social exclusion and antisocial behaviour.
The underclass is a loose term, defined differently by different people. After more than two decades of ad hoc social policies, New Zealand has adopted an approach, based on international evidence, to confront and reduce social exclusion and disadvantage. The results are impressive and beginning to compare favourably with other countries.
National's leader, John Key said there was an underclass in this land of plenty. Prime Minister Helen Clark responded by saying it was diminishing. Both are correct, but both are applying different solutions.
Key recommends work-for-the-dole schemes and business involvement in feeding school children.
The Government points to the policies they consider have led to less unemployment, fewer people on benefits, higher educational achievement and less crime.
The underclass can be defined, very tightly, as referring to households characterised by continuing low incomes, unemployment, low skills, and antisocial values such as crime and drug use.
On the other hand it is sometimes defined very broadly, referring to people who are out of work or on benefits.
Some writers use a moral definition referring to family values, children born to unmarried parents, and crime, as well as welfare and unemployment.
Others refer to a combination of race and poverty as experienced by many migrant workers and refugees in different countries.
The present political debate has focused on a broad definition of the underclass. It has been about social exclusion, including varying emphases on low incomes, unemployment, educational failure and crime.
These originate from the economic restructuring during the late 1980s and 90s. As New Zealand endeavoured to balance its accounts and become internationally competitive, many businesses folded. As unemployment grew the incomes of many dropped, particularly those with low skills. There was a minimal focus on retraining and upskilling and very few sunrise industries to create employment.
On top of this, in 1991 Ruth Richardson, as Minister of Finance, delivered a budget that cut deeply into welfare benefits and introduced market rents on state houses.
The double whammy of lower incomes and higher rents for those who were already unemployed or on low incomes created levels of poverty we had not experienced in post-war New Zealand.
There was little social monitoring, few social statistics available on a yearly basis, and no public measure of income poverty, and so the social impacts of the reforms were debated largely around the ideology rather than facts. Eventually, academic and non-government research groups, such as the Poverty Measurement Project, developed measures of our key trends such as increases in poverty and their impact, bringing into view transparent evidence of the growth in levels of deprivation.
With the change of government in 1999, key ministries, such as the Ministry for Social Development, were required to introduce a raft of transparent social monitoring, including that of health, education, income, living standards, employment, housing and many others.
The measures were designed to be robust and internationally comparable. Many are now produced in the annual Social Report. They were designed to independently measure, on an annual basis, the effectiveness of policies created to reduce social exclusion and disadvantage.
The ministries were also required to scan international research and evaluation studies to discover the most effective ways to reduce unemployment by creating "job rich" growth in the economy. A similar approach was employed to address child poverty, improve educational outcomes and reduce crime. The critical change that took place involved developing evidence-based policies.
International research and evaluation have provided evidence of what has been successful in different settings and what has failed.
Our record reduction in unemployment has not occurred simply as a result of growth in the economy, because it has been sustained during the recent lower growth period and has occurred at a higher rate than other countries with strong growth.
It has been supported by a change of practice by Work and Income that involved high-quality case management, job matching, employment pathways and partnerships with employers.
The record low unemployment in New Zealand, when compared with other OECD countries, is a result of the combination of a strong economy and evidence-based policies. Likewise, the $1.6 billion committed to Working for Families grew out of international best practice.
The model that has been developed, parallels the British approach to reduce child poverty and has also been adopted in Australia.
The debate on the underclass has been alarming because people have reached for anecdotal solutions rather than those we know work from the evidence. There is no doubt that there are people who are socially excluded and disadvantaged in New Zealand.
The debate would be much more helpful to them if evidence-based solutions that would develop what is already being achieved were presented.
It would be tragic for New Zealand if we reverted to the practice of previous decades of applying ad hoc and un-researched solutions to the serious social problems on which we are clearly making progress.
In this regard, Key should be aware that the evaluation research suggests that work-for-the-dole schemes are ineffective if the goal is to create employment.
If businesses are to be involved in providing food for schools, there needs to be a credible and sustainable plan that can be rolled out across the country.
Tasti Products has indicated that their generosity is a one-off agreement - and that gives pause for thought.
These are complex problems that require sustainable solutions underpinned by robust evidence and solid experience. Vulnerable people's lives are at stake.
* Charles Waldegrave, Poverty Measurement Project
