06 December 2011
Privatising welfare not the answer

National and ACT’s moves to corporatise welfare will cost New Zealand more money for worse outcomes, the Green Party said today.

“The agreement between National and ACT openly seeks to privatise the welfare system and punish those who are most vulnerable,” Green Party Co-leader Metiria Turei said.

“National and ACT want to contract Work and Income services to third parties who seek to make a profit.

“Profiting in the welfare system does not mean a more effective system; it means a more expensive system because companies will be extracting profit for the same services provided by public agencies.

“Simply moving welfare services to private companies does not address the fact that many families do not have enough money to live on.

Mrs Turei said that children will be the hardest hit by privatisation of welfare and moves to manage the income of people who do not meet new punitive standards.

“The policy of managing the incomes of beneficiaries is an extraordinary intrusion by the state into ability of individual families to make their own choices,” Mrs Turei said.

“Private companies which manage family income will not prioritise the needs of children over their own interests.

“By making Working for Families work for those who need it the most we can ensure that when people go on benefits they can provide for their children. By lifting the minimum wage,
we make work more viable for families.

“Privatising welfare has been shown to be ineffective. We have seen this in the Northern Territory of Australia where income management is targeted discrimination.

“The UK has tried similar reforms, which have seen private companies boom while inequality and poverty have grown,” Mrs Turei said.

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