Editorial: Labour's head in clouds over welfare

Finance Minister Bill English. Photo / Mark Mitchell

Opinion

Finance Minister Bill English is adamant there will be no election lollies from the Government this year.

Further, he says, people do not want them because they understand the consequences of straitened economic circumstances, not least the borrowing of $300 million a week to cover the blow-out in the cash deficit.

The Labour Party clearly thinks differently. Initial indications of its social welfare policy, issued this week by deputy leader Annette King, include a promise to extend paid parental leave and to make Working for Families more generous for parents of under-2s.

At a different time, there might be something to be said for changes to the parental leave provisions. Indeed, in a perfect world, the leave period would be extended, in phases, from the present 14 weeks to one year.

This would convey a worthwhile social message, telling young parents that society believes it is right for one of them to care for their baby at home for that time.

Unlike many social welfare measures, paid parental leave is also relatively well targeted in that it is used mainly by women in low-paid, non-career jobs. Career-minded parents are more inclined to return to work as soon as possible.

But Labour's proposal offers no real advance on the present policy while increasing welfare spending. The paid leave period would be extended by just a month, from 14 to 18 weeks, and more parents would be eligible for it, mainly, it seems, to match Australia's new scheme.

This desire for comparability in spending is somewhat odd in itself. Hasn't the same Labour Party scorned the Government's goal of achieving pay parity with Australia by 2025?

More than that, however, an extra four weeks would offer little in the way of inducement or message. The money would still cover only a tiny fraction of the financial cost of a child.

More problematic still is Labour's plan to make Working for Families more generous for parents of children under 2. Already, that scheme is too benevolent in both its sum and reach. Many middle-class families have been able to arrange their financial affairs to qualify for unwarranted payments.

The Government has signalled a willingness to curb such access, but has honoured an undertaking not to touch either it or interest-free student loans, another example of the largesse of the previous Labour Government, in its first term.

However, reining in Working for Families should be high on the Government's agenda if it is re-elected. Precious public money should not be wasted on welfare for all, especially in the present circumstances.

The scheme sprang from a time of plenty, which the Government claims was largely squandered by the Clark Administration. The Government's books are not forecast to be back in surplus until 2015-16, providing fertile ground for it to attack Labour's social welfare policy. Now, it will argue, prudence demands that spending be restrained, not extended even further.

Annette King says Labour's social welfare package will be designed to make New Zealand the best place in the world to raise a child.

The country, she says, must take a long-term view, sustained across at least two political terms, if it is to greatly improve the chances of all children getting the start in life they deserve.

Pivotal to this would be the very early identification of children or families who need help.

Thinking beyond the immediate horizon is always welcome. But a core focus of this year's election campaign will, inevitably, be the parties' short-term plans and priorities to address the sluggish economy.

Even the first pointers to Labour's social package open it to accusations that it is guilty of wishful thinking. If they are a harbinger of policies to come, voters will have two very different approaches from which to choose.