John Armstrong: Cautious Key making life tricky for Labour

It's welfare reform, Jim, but not as we know it. National's first substantial foray into territory from which it fled in undignified retreat in the Ruth Richardson-Jenny Shipley era is very cautious, very measured and very unthreatening. Deliberately so.

That poses some rather tricky problems for Labour. The centre-left was probably counting on National reverting to type and initially tackling its modernisation of the welfare state by rounding on the tens of thousands of people on the domestic purposes or sickness benefits and radically tightening eligibility, entitlements and obligations.

The Government has indeed been doing that with its "Future Focus" programme which, among other things, imposed stricter part-time work obligations on sole parents.

But Future Focus is more a case of tinkering with the existing system than the wholesale restructuring recommended by the Government-instituted welfare working group in February.

The challenge laid down by that advisory body was that a Government claiming to be serious about slashing the numbers on welfare had to have the necessary political bottle, plus a willingness to budget enough cash for back-up services so people had no excuse for staying on their benefit.

There are two ways of looking at the plan unveiled by the Prime Minister last Sunday to deal with "disengaged" youth.

The first is that it amounts to the first serious effort to ensure a segment of the population, albeit a small one, is no longer so prone to becoming reliant on a benefit.

The second is that some of those targeted - 16- and 17-year-olds on the independent living allowance - are already intensively "case-managed" by Work and Income and are obliged to be in school or some form of training. So what's new?

John Key's clever politics have been to pick a group which cannot vote and which, as far as most people are concerned, needs firm direction and protection by the state.

So it seems common sense to identify the 13,000 or so 16- and 17- year-olds who have left school but have no jobs and work with them closely to get them back into some kind of education and training so they can hold down a job.

Intriguingly, it is the more ideologically driven components of Key's plan which make it popular.

First, the mentoring and monitoring of the teenagers will be contracted out to non-government social services who will get bonus payments according to results. Second, the 1600 or so who are on the independent living allowance because of family breakdowns or the like will lose control over how they spend a large chunk of their benefit.

Removal of the supposed freedom beneficiaries have to drink, smoke or gamble away taxpayers' money will have widespread backing.

Even here, though, Key has been careful. It has gone unnoticed that National's plan stops short of the welfare working group's recommendation that teenagers receiving financial assistance from the state live with a "responsible adult" and their total welfare payments also be paid to that person.

That might have been seen as too punitive - and suggests that while Key will carry through with the broad thrust of the working group's recommendations, he will make them more politically digestible.

All this adds up to something Labour is finding extremely difficult to criticise without putting itself on the wrong side of majority opinion, while also driving a wedge between itself and what remains of its dwindling male, blue-collar constituency.

Labour is acutely conscious of the trap Key has set. It has limited its criticism to saying the plan is a con-job and an election stunt.

It says Key has promised to help younger members of the "underclass" before and nothing substantial has eventuated even though this must be at least the third National "youth package".

Labour has also waved a letter written by Social Development Minister Paula Bennett to a businessman in which she said the sort of oversight now planned for out-of-work teenagers was highly intrusive and the use of payment cards to stop beneficiaries buying cigarettes and alcohol was making moral judgments about individuals.

But Labour's prime means of undermining National's plan is to argue that making teenagers follow such a programme ignores the reality that with unemployment among 15- to 19-year olds at more than 27 per cent - compared with an overall figure for the labour force of 6.5 per cent - there are no jobs for them.

Labour has sought to widen the argument to the 58,000 15- to 24-year-olds who are not in work, education or training. Phil Goff has also cited a $145 million cut in industry training as proof National is not willing to match promise with delivery,

National does not dispute the figure, but points out the reduction is over several years.

As well, it says, Labour might have nearly trebled industry training's funding, but there was poor accountability, poor results and money was wasted.

An audit by the Tertiary Education Commission, for example, revealed a dozen cases of deceased people listed as being in training.

Such argy-bargy between the two major parties is somewhat removed from the question of welfare reform - a point of contention for National, which says it is simply giving priority to helping an age group which once it graduates to the benefit tends to stay on it for some time.

Labour may have had some success in shifting the argument on to a wider plateau. But eyes glaze over when politicians start throwing sets of statistics at one another.

In contrast, National organised its annual conference last weekend with the sole objective of ensuring nothing obstructed maximum television coverage for Key's speech.

National's strategy for welfare reform is clear - flag a gradual lift in the tempo and scale of reform it intends to carry out if re-elected while being careful to ensure it takes the public with it.

It seems to be working. But it is still very early days.