Time To Loosen Welfare's Grip On New Zealand

Monday 5 Jul 2004

Dr Muriel Newman - Speeches - Social Welfare

Speech to Canterbury ACT members and supporters; ACT Leader's Lunch; Chateau in the Park, Christchurch; Sunday July 5, 2004.

It is an honour and a privilege to be addressing you today as the new Deputy Leader of ACT New Zealand, and to be here supporting our new leader Rodney Hide.

This is an exciting time for the Party. The leadership change signals a new beginning, and a fresh start. While ACT's fundamental principles of personal responsibility, freedom and choice will never change, this new era provides an opportunity to present and communicate our message in a way that engages a far wider group.

The New Zealand at the heart of our vision is a country where the vast majority of people can live happier and more prosperous lives. The changes we believe in will help all citizens - not just a few. With our independent spirit, our values of hard work, commitment to family, industriousness and enterprise, we can achieve outstanding success - if only we were not held back by Government failure.

And, if we were to identify one area where Government failure does irreparable damage, it is welfare.

Many of you here today will know that I entered the recent ACT primary with a commitment to make welfare reform a key platform for ACT. I want to use this opportunity to share with you why a women from Whangarei who used to work as a right hand man for the highly successful entrepreneur Michael Hill jeweller would change her world so much to champion such an issue.

You will all be aware that welfare is a bit of a problem. But let me share with you why it is so critical to our country's future. Firstly, let's look at some reasonably well-known statistics.

For 130 years, from 1840 to 1970, welfare was not a problem. We had a society that was built on the very principles - particularly personal responsibility - that underpin ACT.

In 1970 - only 34 years ago - we had 28 full-time workers for each person on a full time welfare benefit. Today, we have around four full-time workers for each beneficiary.

In 1973, 31 years ago, we had 12,000 sole parents. Today we have 112,000.

In 1983, 21 years ago, we had 8,000 on Sickness beneficiaries. Today we have 43,000 - over five times as many.

In 1983, 21 years ago, we had 18,000 Invalid beneficiaries. Today we have 72,000.

If you believe Labour, you would think that unemployment is no longer a problem. Yet, in 1973 - 31 years ago - there were fewer than 2,000 people unemployed. Today there are around 100,000 on all forms of the unemployment benefit. That is 50 times as many.

So, from a long-term record of low dependency levels of under 40,000, in just 30 years our society has dramatically changed. Benefits now support 330,000 people now - an eight-fold explosion. And, with it has come, a change in public attitude.

And those numbers only begin to tell the welfare story.

Did you know that one in six sole mothers cannot or will not name the father of their child? That's over 18,000 women, a 50 percent increase in the time that Labour has been in power.

Not only are those mothers denying children the right to know their father, but they are protecting those fathers from having to front up to the personal and financial responsibility of raising a child.

And did you know that New Zealand is so sick - has been hit by such an epidemic - that there has been a 30 percent explosion in the total number of adults supported by the Invalids and Sickness Benefits since Labour became government?

Then there are the children. More than a quarter of a million New Zealand children now live in families supported by benefits. That's one child in three. One in four live in sole parent families.

Hidden within these statistics is an extremely disturbing trend for Maori: one half of all Maori children are now being brought up on welfare and, if present trends continue, by the year 2010 three out of four Maori babies will live in families without a father.

As a result of this disintegration of family, and over-representation on welfare, almost 40 percent of all children placed in the care of the Department of Child, Youth and Family are Maori.

When Labour came into power in 1999 the economy was growing strongly on the back of the economic reforms of the 1980s and early 1990s.

As a result, short-term unemployment - which is always driven by the economy - has fallen. Long-term unemployment, however, which depends on the Government's welfare policies, remains a serious problem, with tens of thousands of able-bodied people remaining on welfare - despite there being a critical shortage of workers.

Even Labour's 2004 budget - sold as an answer to the country's welfare problem - is destined to fail. By their own admission, official Budget projections show that all four of the main benefit types are expected to rise by over 22,000 beneficiaries within the next four years.

Did you read that in the paper? I expect not.

As a society we seem to have now come to accept that welfare is a right, rather than a temporary hand up. Worse, we are becoming de-sensitised to the harm caused by long-term welfare dependency. All too often we treat it as an inevitable - if shameful - part of New Zealand society.

So what would ACT do? Change the incentives, of course.

It was the Kirk Labour Government that undermined the welfare system in the 1970s, by changing the incentives from being a hand up to work, into a dependency trap. That's why we've had such an explosion in welfare numbers.

The reality is that, in life and in public policy, you get what you pay for. If you have a welfare system that pays people to do nothing, then that's what they will do - for years and years.

If the system pays people to have and raise babies they do not really want, then you will get an epidemic of abused children. If welfare pays families to split apart, then the result will be an escalation in family breakdown with all its disastrous consequences.

But if, on the other hand, personal responsibility is re-introduced as the underlying principle of welfare - and if the scheme is designed to be a hand up to work - then welfare will again become a system to support and empower people into independence and a better future.

That is ACT's goal: step one would be to require everyone to re-apply for their benefit in order to re-assess their needs.

Step two would be to introduce time limits for the able-bodied - if after six months they haven't been able to find a job, then they would need to sign on to work experience.

And step three would require them to engage in full-time work experience. The programme would consist of work, training and job search - providing the beneficiary with the best professional help and support to help them to overcome their personal barriers to work so they can get, and keep, a job.

ACT's ultimate goal is to eliminate long term benefit dependency for those who are capable of working, while supporting those who are genuinely unable to provide for themselves. Achieving that will take us closer to realising our vision of a New Zealand that we can all be proud of: a free and prosperous country, where everyone contributes in their own way, where ambition can flourish, where achievement is rewarded, and where success is celebrated.

Today, in Auckland, Don Brash is making his well-signalled speech on law and order. I hope that ACT's lead on this issue, and our championing of a zero tolerance approach to crime, is not forgotten.

I wonder whether the central role that welfare plays in crime will be highlighted: when I was in the Papakura Police Station at 2am one morning - on the night beat as Police Spokesman, I hasten to add - the link between welfare and crime was overpowering.

The duty officer flicked through the charge sheets of all of those arrested that day: "Unemployed, unemployed, unemployed, sickness beneficiary, unemployed ... oh look, we have a plumber!" Their rule of thumb is that seven out of 10 people arrested will be on welfare. Further, over half of all offenders in prisoners came off welfare.

If we are successful in reforming the welfare system - giving people back the responsibility of providing for themselves and their family - crime will drop and we won't need to spend billions of dollars building more prisons.

I've been asked why I am so passionate about welfare reform. Essentially there are three reasons:

Firstly, I grew up in pre-1970 New Zealand, when welfare worked well. We were a safe, prosperous and successful country where poor families could get ahead, and where the sky was the limit for the young.

Once I realised that it was public policy that had caused our decline to the situation we face today, I became determined to help change the system and put it right.

Secondly, we learned from our parents that each generation has a responsibility to leave a better country for their children. If our generation is to leave behind us the legacy of hope and aspiration that our children deserve, then it is imperative that ACT succeeds in implementing our programme of reform.

And thirdly, I've been a solo mum on welfare with young children, and personally faced the dependency trap. I've lived the day-to-day existence, seen the wasted lives, and experienced the seductive grip of that twilight world of welfare.

I am driven by wanting to change the system, so that all of those talented New Zealanders who have become enmeshed in the welfare trap can break out, get going, and achieve their potential. We need a welfare system that empowers and lifts people. ACT's programme of welfare reform will do just that.

If we stand back and reflect on Labour's damaging and visionless agenda - driven by political correctness, social engineering, and an obsession with regulation - we come to the realisation that the next election is probably the most important for the future of New Zealand since 1984.

With the resurgence of the National Party, and the opportunity that our new leader - one of New Zealand's best communicators - brings to ACT, we have an important mission ahead.

We must win the next election, and win for ACT a central role in the new government.

To make a real difference that new government will need ACT's ideas, ACT's commitment and ACT's courage.

But we cannot win without your help. We cannot succeed without you.

We need you to help us by reaching out to everyone you know, explaining to them who and what ACT is about. We want to encourage them to check us out, to get to know us so that they too can become part of our team.

Within 12 months, we will be engaged in an election battle.

ACT's goal is to return New Zealand society to one that is built on the values of personal responsibility, freedom and choice. Only when we achieve that goal can we confidently look forward to living in a country where no one is left behind.

ENDS

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