Social security and welfare: Dole stand defines parties

Social security and welfare take about $14 billion of our taxes a year and are the largest areas of Government spending. Health is next, taking $6.4 billion and rising. Jan Corbett looks at what the parties plan for these big-budget items.

Less than three weeks from the election, Associate Social Services Minister Peter McCardle is unable to say if one of National's key welfare initiatives has worked.

Last year, he introduced the community wage, or what we colloquially call Work for the Dole. The idea is that being out and active in community work or training is more likely to lead to a proper job than sitting at home.

But although plenty of journalists and politicians have been asking how it's been going, Mr McCardle says the figures are highly complex and will take another couple of weeks to produce.

From a cursory glance, he says, it looks as though around 30 per cent of those in community work have gone on to fulltime employment.

Despite there being no evaluation of the policy, whether beneficiaries should "work" or "train" in return for their benefits is one of the principal policy divisions between the parties.

The Alliance and Labour would scrap the scheme; New Zealand First, National and Act would either keep or extend it.

Social security/welfare is the largest area of Government spending, consuming around $14 billion a year.

But the proportion of gross domestic product that goes to sustain our welfare system has been steadily declining every since Ruth Richardson's 1991 Mother of All Budgets.

That year, 14 per cent of GDP was spent on welfare. By 1997 that had dropped to under 12 per cent.

The total number of beneficiaries has hovered over 800,000 through the '90s – a drop from 1.2 million at the end of the 1980s, thanks to the abolition of the universal family benefit.

Of all benefits, it is those paid to the unemployed and solo parents which arouse the most passion.

The reality is that, at 6.8 per cent, our unemployment rate is one of the lowest in the OECD, bettered only by the US and Japan.

Who is the most vulnerable? Most recent data showed that, of the 138,000 unemployed, 51,000 had no school qualifications, while 37,000 had both a school and a post-school qualification. Nearly two-thirds, or 83,000, were Pakeha. The age group worst affected were the under 24-year-olds.

Of the 112,000 or so on the domestic purposes benefit, 40 per cent were aged between 30 and 39 and 66 per cent were separated from a spouse or partner.

If the Alliance becomes the Government, the people on the DPB, and all beneficiaries, would get a $20-a-week pay rise, funded from higher taxes.

It also promises to create 80,000 extra jobs with a $200 million development fund and impose a 5 per cent tariff on imports to protect local manufacturing jobs.

Labour would scrap work-for-the-dole and work testing of sickness beneficiaries. NZ First would expect beneficiaries to contribute to the community and Act would make all unemployed work or train for up to 40 hours a week.

National promises that if we stay on the current course there will be 100,000 new jobs by 2002.

But employment alone will not solve all our welfare issues, according to social policy senior lecturer Mike O'Brien of Massey University at Albany.

None of the parties, he complains, has so far had anything to say about child poverty, which not only affects children of beneficiaries but those from large families where the principal earner is on a low wage.