Earlier this week, the Turnbull Government announced a new wave of welfare reform that would use data analysis to crack down on long-term welfare dependence, which is based upon a system implemented in New Zealand in 2012.
Now, a group of experts has emerged to attack the proposal, claiming that the system in New Zealand “abuses and brutalises” the poor, while removing assistance from those that need it most. From The Guardian:
“In New Zealand our welfare system operates the same way as our prisons – it treats beneficiaries as a threat to society, to be policed and managed,” said Darrin Hodgetts, a professor of societal psychology at Massey University and an expert on poverty in New Zealand.
“If Australia want to abuse and brutalise their people, then sure, copy our system”.
…poverty experts in New Zealand say the Australians are signing up to a system that is routinely harming, rather than helping, New Zealand’s most needy.
“Any of these data modelling tools – trying to predict the future – they are notoriously wrong,” said Louise Humpage, a senior lecturer in sociology and criminology at the University of Auckland.
“And they are hugely dehumanising as well – people become a statistic and not an individual”…
Last year Auckland University of Technology social science lecturer Michael Fletcher penned an opinion article for the Australian website the Conversation warning Australians not to follow New Zealand’s welfare changes.
“The claim that the NZ investment approach has been ‘very successful’ is at best unproven. Arguably, it is plain wrong,” he wrote.
“The data which the government is so excited about is incomplete,” he told the Guardian after Australia’s announcement this week.
“We don’t know what has happened to people once they have come off the benefit…”
I am not going to pretend to you that I understand the workings of New Zealand’s welfare system, because I don’t.
What I will say is that the Government appears to be jumping at shadows here.
Last week’s HILDA survey revealed that welfare reliance for those aged below retirement age has actually fallen over the past decade:
Moreover, if the Government truly wants to reduce welfare spending, surely it should focus on the biggest and fastest growing component – the Aged Pension ($45.7 billion currently rising by $2 billion per year to $2 billion by 2019-20) – which dwarfs the other forms of welfare expenditure (see below chart)?
As already argued this morning, the home ownership rate for Australians aged 65 and over is 75%, and this cohort has experienced an enormous rise in wealth on the back of rising housing values. And yet for no good reason, housing is excluded entirely from the assets test to receive the Aged Pension.
As such, Australia finds itself in the perverse situation whereby older Australians have experienced an unparalleled rise in wealth at the same time as their dependence on the Aged Pension has risen rapidly, and is projected to continue doing so.
Surely, then, any reform to welfare spending should target the Aged Pension first, since it is by far the biggest and fastest growing component and the most poorly targeted?
It’s also fair to say that very few people ‘choose’ to go on welfare. Take a look at the below table, which shows that a single Newstart recipient receives a pitiful $37.70 a day:
This compares to $62.42 per day on the Aged Pension once supplements are factored in, despite most older households (75%) owning a home:
So, tell me again why the Government should further tighten the screws on welfare recipients, whose numbers are falling and are already paid a pittance?
