Ministry of Social Development in Whanganui. Photo / Bevan Conley
Ministry of Social Development in Whanganui. Photo / Bevan Conley
Anti-poverty campaigners say the Government has been “woefully slow” after promising to reform the welfare system five years ago yet not one of the 42 “urgent” recommendations it received has been fully implemented, according to the latest stocktake.
Social Development Minister Carmel Sepuloni says it is not a “box-tick exercise” and the Government has implemented most recommendations in part, alongside increasing benefit rates by record levels, eating away at the 1991 cuts that plunged tens of thousands of families into poverty, and reducing sanctions that impact children by 87 per cent.
But campaigners say those increases are still not at the levels they recommended five years ago and have only just made up for the previous cuts - not the decades of impacts afterwards and entrenched poverty.
Before 2017, Labour campaigned on reforming the welfare system, including rolling back a range of sanctions introduced under National targeted at people on benefits.
Soon after Labour was elected the Government established the Welfare Expert Advisory Group, part of its confidence and supply agreement with the Green Party, which in February 2019 produced the report Whakamana Tāngata: Restoring Dignity to Social Security in New Zealand.
The group came up with 42 recommendations, which ranged from amending principles of the legislation guiding the welfare system to specific initiatives such as removing certain sanctions and increasing benefit levels.
Some steps in part, including a range of benefit sanctions targeting single parents, were almost immediately adopted.
Carmel Sepuloni, Deputy Prime Minister, and Social Development and Employment Minister. Photo / Mark Mitchell
But in several progress reports since, including the latest provided to Cabinet in December and released to the Herald, the Government has not been able to claim to have fully implemented any of the recommendations.
Sepuloni told the Herald it was not a “checklist” and she was happy with the progress made.
“It’s informed our [welfare] work programme, helped to inform the $14.6 billion that has gone into our welfare overhaul and is a really important roadmap, but it was never a box-tick exercise.
“I don’t think that anyone could expect the welfare system to be overhauled, even within five years.”
She said the most significant changes included increases to benefits and income supports that fixed the cuts from 1991 in then-National Finance Minister Ruth Richardson’s infamous “Mother of All Budgets”. The changes had helped lift tens of thousands of children out of poverty.
Since 2018, benefit income levels had risen by 43 per cent after accounting for inflation and housing costs. About 351,000 individuals and families were on average $113 a week better off now than in 2017.
These situations would improve further from April 1 after the Government announced it was indexing benefit increases to inflation (7.22 per cent) rather than the average wage rise (6.24 per cent).
View the document below:
But Child Poverty Action Group’s professor emeritus Innes Asher, who served as a WEAG member, said benefits were still not keeping up.
“Indexing to inflation is good but just means people are not falling further behind.”
On reviewing the stocktake, Asher said the Government had been “woefully slow”.
“It’s now in its fifth year. The report says that the Government remains committed to overhauling the welfare system that ‘ensures people in need are able to have an adequate income, are treated with respect and dignity and are able to participate meaningfully in their communities’.
“Well, I don’t see any evidence of those things being progressed.”
On benefit levels, Asher pointed to a study by Fairer Futures last year that found a New Zealand family on a benefit needed an estimated $165 more a week just to get by.
That study had adjusted the WEAG recommendations from mid-2018 for inflation and found that despite increases some main benefits were still falling short along with other income supports.
In 2022, 12 of 13 households in the study were not able to meet their total costs and nine of 13 household types were not able to meet their core costs.
In private rental, without debt repayments, a two-parent family with three children would be about $307 a week short and under a sole parent $239 a week short.
Even after this year’s April 1 changes, Jobseeker Support for a single person will be about $337 compared with $373 as recommended in the WEAG report (adjusted for inflation from mid-2018).
“These deficits are because benefits were slashed in 1991, and there have been only small increases in the last 10 years, not nearly enough to make up for what was lost,” Asher said.
She said other critical areas included income supports that affected children. This included reforming the Family Tax Credit to include those on benefits, not only those in work, which would give them an extra $72.50 a week.
Addressing this was part of the Government’s ongoing Working For Families review.
View the Cabinet paper here:
Sepuloni said there was still work to do in this area but the Government had to make priorities, especially given the workload over the past few years responding to Covid-19.
“All of those things are priorities but we can’t always fund everything every year.”
Sepuloni said she could not comment on any impending changes in this year’s Budget, but confirmed the Government was looking at increasing hardship grants, which had not increased in the past 20 years and also affected civil defence payments.
Green Party social development spokesman Ricardo Menendez-March said it was clear implementing all of the recommendations was not an urgent priority.
“The Government needs to treat the overhaul of the welfare system as a core bread and butter and cost of living issue, and move those timelines forward to lift people out of poverty and ensure that a welfare system treats people with dignity.”
Menendez-March said there were policies that could be easily changed, which Sepuloni herself had publicly spoken out against, including the impact of someone’s relationship status on their income support and sanctions like the one targeting beneficiaries with a warrant to arrest. Work on these was not planned to begin until next year.
“It’s not something that would be technically complicated. And it could be achieved, basically, immediately if the Government was to do so.”
Over the next one to three years the Government also intends to progress a Welfare Overhaul Bill, which responds to the first of the WEAG recommendations.
Menendez-March said such a change should have been the first action the Government took.
“It is critical that a Welfare Overhaul Bill commits to mandating our agencies that support people to ending hardship, not just alleviating it, because that would have flow-on tangible changes and [affect] how people access assistance for things like housing, or travel.”
Sepuloni said changes needed to be made before the legislation was changed, which is why it was delayed.
Sepuloni said she believed the act needed to be more aspirational.
National Party social development spokeswoman Louise Upston said Labour had made some “big promises” around welfare reform and she understood that for people their lack of progress would be “pretty frustrating”.
Upston said there were some recommendations National agreed with, including improving reporting and lifting the steps to freedom grant for those leaving prison, but it would not continue the overall process, including progressing a Welfare Overhaul Bill.
She said the party’s focus would be on supporting people into employment, citing an increase in numbers of people on benefits and the time it took to get into work.
