Ten days into 2024, Port Moresby descended into chaos as opportunists looted and burned shops in Waigani, Gerehu and other suburbs.

That morning, police, military and correctional service personnel gathered at the Unagi Oval in protest over deductions made to their pays that fortnight. Unsatisfied with the explanations, they withdrew their services and converged on Parliament to seek answers.

It took just a few hours for the delicate balance between order and chaos to be tipped to one side.

In the absence of police, people took to the streets. They looted shops nearest to them and forced the closure of the entire city. Several people died during the looting.

The politicians — the lawmakers — were left powerless as the enforcers of the law became spectators allowing the mayhem to worsen.

While many saw the so-called Black Wednesday, 10 January, 202, as a one off incident caused by “disgruntled” members of the services, the warning signs had been flashing for many years and had been largely ignored.

Two weeks back, I asked a constable attached with one of Lae’s Sector Response Units (SRU) about his take home pay. It is an uncomfortable discussion to have.

Living conditions
But it is necessary to understand the pay and living conditions of the men and women who maintain that delicate balance in Papua New Guinea.

He said his take home pay was about K900 (NZ$385). When the so-called “glitch” happened in the Finance Department, many RPNGC members like him had up to one third of their pay deducted. That’s a sizable chunk for a small family.

Policemen and women won’t talk about it publicly.

They also won’t talk about the difficulties and frustrations they face at home when there’s a pay deduction like the one in January.

Black Wednesday showed the culmination of frustrations over years of unpaid allowances, poor living conditions and successive governments that have ignored basic needs in favour of grand announcements and flashy deployments that prop up political egos.

Why am I raising this? What does Black Wednesday have to do with anything?

That incident showed just how important the lowest paid frontline cops are in the socioeconomic ecosystem that we live in. The politicians, make the laws, they “maintain law and order” and we’re supposed to obey.

Oath of service
Police, military and correctional service personnel, entrust their welfare to the state when they sign an oath of service. This means the government is obliged to care for them, while they SERVE the state and the people of Papua New Guinea.

But for decades, successive governments seem to have forgotten their obligations.

Out of sight. Out of mind.

Politicians have opted for short term adhoc welfare “pills” like paying for deployment allowances while ignoring the long term needs like housing and general living conditions.

The Acting ACP for the Northern Division, Chris Kunyanban has seen it play out time and time again. He said, as a commander, it is difficult to get a cop who is struggling to fix his rundown police housing to work 12 hour shifts while there’s a leaking roof and a sick child.

It’s that simple.

The government says it is committed to increasing police numbers. Recruitments are ongoing. But there is still a dire shortage of housing for police.

Republished from Lekmak with permission.

Article by AsiaPacificReport.nz

The day after New Zealand’s first lockdown was announced, I expressed to a senior colleague my concern for those around the country whose livelihoods would suffer as a result.

She agreed, but was confident that the spirit of “we’re all in it together” accompanying these drastic public health interventions would allow the government to lead the country towards a kinder, more equitable society.

“I think we might see a universal basic income,” she said hopefully.

As it turns out, the government had little appetite for progressive welfare or tax reform.

Instead, working with the Reserve Bank, they have propped up the economy through a combination of measures that have drastically inflated the price of houses.

This has most likely protected some jobs, but it has also made work increasingly irrelevant as capital gains completely outstrip wages. The wealthy have been made even wealthier, while many can no longer afford a roof over their heads.

In the past year, the average New Zealander effectively lost $54.59 for every hour they turned up to work if they did not own a home.

According to Stats NZ, the median worker earned $26.44 per hour before tax in 2020. That comes to $21.49 per hour after tax if working a 40 hour week.

Median house prices
Meanwhile, in the year to end of February 2021, the median nationwide house price increased from $640,000 to $780,000: a difference of $140,000. If houses took weekends, public holidays and four weeks’ leave off each year – which of course they do not but it makes the calculation simpler – that makes an hourly rate equivalent to $76.08 per hour. Tax-free.

This is a direct result of the decision to support the economy through a combination of quantitative easing, a reduced Official Cash Rate and wage subsidies, instead of meaningfully increasing spending on things we need such as infrastructure and welfare.

The government handed out money to the banks, effectively at no cost, allowing them to lend more at increasingly attractive rates.

The government also bought bonds at the same time, devaluing deposits and making it pointless to keep money in the bank. This combination of easy credit and disincentivised saving caused a large amount of money to start sloshing around looking for somewhere to go.

The traditional concern with this approach to stimulus is that it will inflate the price of goods and services, increasing the cost of living.

In New Zealand, though, we like to buy houses. A tax system that drastically favours property ownership, combined with a cultural sensibility that houses are a safe bet, has seen much of this newly available money pumped straight into the housing market.

A feature
This is a feature, not a bug.

It represents a new, more interventionist version of trickle-down economics for the 2020s. Decried in 2011 by Labour MP Damien O’Connor as “the rich pissing on the poor”, politicians from the right have long argued that if the wealthy feel wealthier, their increased spending will benefit those less well off.

Generally used to advocate for reduced taxes on the rich, these ‘trickle down’ arguments refuse to die, no matter how comprehensively and repeatedly they are discredited.

This revival of trickle-down economics is a little different, as it is based on direct stimulus rather than a reduction in tax, but the effective mechanism is the same.

House price inflation is desirable, we are told, because homeowners feeling the resulting “wealth effect” will spend more on the goods and services provided by other New Zealanders. The win-win logic of this argument hides the fact that, fundamentally, someone is paying a heavy price.

Another way to think about it is that the government has effectively paid for covid-19 by levying a special tax on anyone who wants to live in New Zealand, but did not happen to own property during the summer of 2020/21, and handing that money to homeowners.

Paying the price
Many will pay this price throughout their lives. Some will be consigned to renting forever, handing over ever-increasing portions of their incomes to landlords seeking increased yield from their value-inflated properties.

Too many won’t even be able to do that, and sleeping on the street or in emergency accommodation. The relatively lucky few who do manage to buy a home will have mortgages hundreds of thousands of dollars larger than they otherwise would, spreading the cost of covid across their entire lifetimes.

Even as the beneficiaries of this covid levy, most homeowners are unable to simply stop working and enjoy this newfound wealth.

They may feel that they cannot realise their capital gain because it is tied up in their family home. What this windfall does provide, however, is choice: the option to release some of their newfound capital by downsizing into somewhere cheaper, or to stay put, taking advantage of the extra equity to fund lifestyle improvements like a new boat, a bach or a remodelled kitchen.

Unprecedented demand for watercraft this summer suggests that many are doing exactly this.

It can be tempting to view this growing inequity as just another “baby boomers vs millennials” issue. Certainly, it does represent a massive transfer of wealth from generally younger New Zealanders who do not currently own homes, to the largely older folk who were able to buy homes cheaply in the past.

This disparity is reflected in Westpac’s latest consumer confidence figures, which show that younger New Zealanders are far more likely to be worried about their financial situation compared with older cohorts.

Patronising advice about avoiding avocados and food delivery services to save for a home entirely misses this point. Nonetheless, it is important to note that many older New Zealanders also live in poverty while subject to similarly individualising narratives of self-control.

Social divide
Perhaps the more important question is how this rapidly accumulating wealth will be deployed to further entrench a growing social divide.

Parents with equity to spare are increasingly using it to help their children “get on the property ladder”. On an individual basis this is an entirely reasonable thing to do.

At a larger scale, though, the competitive advantage conferred by having generous, wealthy parents makes it even harder for those who do not have such privilege to obtain a home. Many are being left behind as a new landed gentry takes shape.

These political-economic arrangements favouring existing wealth over hard work have been a long time in the making, beginning well before most of the current crop of politicians arrived in parliament.

It is notable, though, that a government that promised to address the “housing crisis” has actively and knowingly pursued policies that have produced an unprecedented upward step-change in the market.

Perhaps most concerning is that the Prime Minister has expressed her intent that house price inflation should continue, just at a more “moderate” rate, because that’s what “people expect”.

It is exactly these expectations that are the problem: these issues will not be resolved while houses remain a speculative investment vehicle, rather than a home.

‘Tipping the balance’
Tuesday’s announcement of measures to “tip the balance” towards home buyers, rather than investors, might begin to signal a growing recognition that housing is more than an investment.

A substantial class of investors have certainly been made exceptionally wealthy by the covid-19 response, even as those who work for a living have seen their incomes stagnate.

But while this separation of ‘investors’ or ‘speculators’ from ‘homeowners’ might be politically convenient, it makes something of a false distinction.

Whether a house is owned as a home, or purely a source of income, any non-improvement appreciation in value comes at someone else’s expense.

Until New Zealand acknowledges this, little will change: whoever is in charge, and no matter how many new homes get built.

Covid-19 has shown that when politicians want to act, they certainly can. As many others have pointed out, this government promised “transformational change”. I’m not sure that taking money from those with the least, handing it to those with the most, is quite the kindness my colleague had in mind.

Dr Brendon Blue is a geographer in Te Kura Tātai Aro Whenua, the School of Geography, Environment and Earth Sciences at Te Herenga Waka, Victoria University of Wellington. He mostly studies and teaches the politics of environmental science and restoration, but would have been better off owning a house instead. This article was first published on The Democracy Project and is republished here under a Creative Commons licence.

Article by AsiaPacificReport.nz

How determined are Labour to take the necessary steps to fix inequality and poverty? Will electoral calculations triumph over their principles and stated ambitions?

These are some of the questions being asked on the political left, as Prime Minister Jacinda Ardern’s government looks determined to stand by while social problems continue to get worse under their watch.

During their last term in government, Ardern and colleagues failed to be transformational on their key promise of fixing inequality and poverty. And now they are choosing policies that massively increase inequality, while ignoring the plight of those at the bottom.

That’s why this week more than 60 charities and NGOs made an open plea to the government to increase welfare benefits before Christmas.

Despite the extraordinary conditions at the moment, Ardern response was a firm “no”. Poverty advocates say Labour should be “ashamed”, with many suggesting that the prime minister’s own advocacy of kindness and compassion is directly contradicted by her actual decisions.

Writing in The New Zealand Herald today, Matthew Hooton argues that the poverty advocates “have a point” in their dissatisfaction, as “Ardern’s response to these issues is unsatisfactory”. He argues that this week’s rejection of benefit increases “has prompted the first mini-rebellion on her left”.

Hooton is particularly dismissive of Ardern’s plea for more time to consider benefit levels: “she says more ‘work’ is needed but it is not clear what ‘work’ is required to make a basic decision on benefit levels.

Why is more ‘work’ needed?
Ruth Richardson, after all, took just 53 days after the October 27 1990 election to announce her benefit cuts. It is not obvious why any more “work” is needed to make the opposite decision.

In any case, the “work” was presumably already done in Ardern’s now eight and a half years in the children’s portfolio and by her [Welfare Expert Advisory Group].”

So should the left be rebelling? And is Labour putting hanging on to power above tackling poverty? Hooton seems to believe so: “The Prime Minister just emotes her usual concern.

“This is not economically or socially sustainable — and surely not politically sustainable either. There must come a time when Ardern’s own political base demands something more on such issues than her frowny-concerned face.

“It will be another 100 years before Labour again wins a mandate like the one Ardern secured last month. If she won’t act now on the issues she says concern her, left-wing activists will be entitled to ask whether hungry children and young couples struggling to buy a house really mean anything to her beyond being useful walk-on parts during election campaigns.”

Similarly, writing in the National Business Review yesterday, Brent Edwards says the debate “is a pointed rejoinder to Ardern from those who do not believe she is as committed to reducing child poverty as her rhetoric suggests”, and he argues that the decision to keep benefits down is unsurprising, given that Ardern’s decisions are guided by electoral considerations.

Brent Edwards contrasts the benefit decision with the first policy announcement of the Finance Minister: “Grant Robertson announced the Cabinet had decided to extend the small business cashflow loan scheme, which was due to end next month, for another three years and extend the interest-free period from one to two years.

Wooing the business community
“It is also looking at other changes to make the scheme more accessible for small businesses. It was the new government’s first decision of this term and is part of its attempt to woo the business community.”

So, just how long will beneficiaries and others in poverty have to wait until Labour delivers? Today’s Stuff newspaper editorial asks: “It takes more than one term to solve it, but will it take more than two?”

The editorial says Ardern is risking damage to her own brand by talking about kindness but doing the opposite: “Poverty advocates are used to hearing governments say one thing about poverty, especially the emotionally powerful issue of child poverty, but do another.”

They also ask: “What is the political cost of kindness? Or conversely, what is the political cost of doing nothing?”

Poverty advocates are understandably upset by Ardern’s rejection of action on poverty, and some are starting to speak out strongly against her and the government. Auckland Action Against Poverty’s coordinator Brooke Stanley Pao has said that Ardern is “choosing to keep people and families in poverty”.

According to this article, Pao “challenged the prime minister and other politicians to try and live on the current benefit for a month and ‘see how they find themselves’.”

Brooke Stanley Pao also wrote about this just prior to the election, saying, “You can’t eat kindness“. Responding to Ardern’s mantra, she says “We want more than kindness. We want the political bravery necessary to lift people out of poverty. Anything else is lip service.”

Leftwing bloggers losing faith
Other leftwing bloggers are losing their faith that Labour and Ardern really believe in progressive politics. For example, No Right Turn says: “The message is clear: their ‘kindness’ extends only to rich people, who will be exempted from paying their fair share of the costs of the pandemic (or society in general).

“As for poor kids, they can keep on starving. Which once again invites the question: what is Labour for, exactly, if they’re not going to ever deliver anything?”

The Child Poverty Action Group reports “the dismayed, disappointed and, in some cases, furious response to its dismissal” of benefit increases by Ardern and asks of the Government, “What, exactly, are they waiting for?”

She argues that increased payments would have an immediate impact on alleviating poverty.

McAllister also draws attention to the Government making decisions in the Covid environment that are likely to worsen inequality while ignoring the needs of those at the bottom: “Using children as economic shock absorbers – that’s unreasonable.

“Covid-response policies that stretch inequity even further – that’s unreasonable. Child Poverty Action Group research this year has shown that core entitlements for those receiving benefits are mostly far below key poverty lines, and in some cases will be tipping people into severest poverty.

“We modelled a scenario that shows 70,000 additional children are at risk of poverty due to Covid-19 on current policy settings.”

Why Labour is ‘tinkering’
For more on what Janet McAllister thinks is wrong with the current government policies, see Why Labour’s tinkering of our welfare system just isn’t enough.

Looking back at what Labour have implemented over the last term, she concludes: “By themselves, these policies are disappointing. It’s still just tinkering around the edges and far from big, bold moves to cut the mustard.

“They’re of no use to many of our poorest families.”

Another poverty advocate, Max Rashbrooke of Victoria University of Wellington, has written in The Guardian about how disappointed he is with progress on child poverty under the government, and how things look set to get worse unless policies are implemented that live up to the lofty targets set by Ardern.

The problem according to Rashbrooke is that Ardern “has relied largely on the ‘third way’ policies of her Labour predecessor, Helen Clark, in her fight against child poverty.”

And so although there has been some “modest progress” on some poverty measures, these are essentially the result of picking the low-hanging fruit. He points to Treasury modelling showing that “the number of families in ‘material hardship’ – those reporting they are unable to afford basic items – will ‘rise sharply’.”

Is it true that the government can’t afford to increase benefits? Not according to business journalist Bernard Hickey, whose must-read column this week argues that Ardern and Robertson seem determined to massively increase inequality by following outdated economic philosophies.

Making homeowners richer
He asks: “Is it more important that homeowners are $100 billion richer? Or that hundreds of thousands of children are left unnecessarily in poverty?”

Here’s Hickey’s main point: “It is bizarre that a Labour government and a Reserve Bank that talk a big game on their social responsibilities and sustainability are choosing to pump up to $150 billion into increasing housing market valuations for the richest half of New Zealanders who own homes, but don’t think they can afford increasing benefits at a cost of $5.2 billion for the hundreds of thousands of kids and their parents living in poverty.”

He points out that “economists as conservative as those at the OECD, the IMF and the World Bank are now begging Governments to do things differently by spending money on the poor and on infrastructure, rather than just pumping up asset prices to make the rich even richer.”

Hickey also refers to a report out this week with findings from the Growing Up in New Zealand longitudinal study. You can read the report here: Now we are eight: Life in middle childhood.

Hickey sums up the inequality findings: “Nearly 40 per cent are living in cold, mouldy and damp homes. About a third are obese. About 20 per cent of the families surveyed did not have enough money to eat properly.

“Nearly 15 per cent of the eight-year-olds had already moved school twice, largely because of having to move from one rental property to the next.”

Not everyone is criticising Labour’s rejection of benefit increases. Newstalk ZB’s Mike Hosking says that giving into such a demand would take the government down a “slippery slope”, and be too expensive for little real gain.

Urgent need for relief
There is no doubt there is urgent need for relief for those at the bottom. And this week the Auckland City Mission launched a campaign to replenish their run-down stocks of food, noting that prior to covid they estimated “10 percent of Kiwis experienced food insecurity on a regular basis.

“Due to covid-19, it believes the figure is now closer to 20 percent – or one million people – who do not have enough good food to eat on a weekly basis.”

And today it’s being reported that the government’s two-tier welfare payments have come to an end.

Finally, what’s to be done about poverty and inequality, given this government has no great interest in being transformational on this issue? According to veteran leftwing commentator Chris Trotter, “it’s time for some ‘earnest struggle’”. He argues that Labour will only ever carry out leftwing reforms if they are forced to.

Trotter wants to see less reliance on appeals to Ardern and Robertson to “be kind”, and more mass marches down Auckland’s Queen St.

Dr Bryce Edwards is a New Zealand-based political scientist of reliability and prominence. His analysis and commentary is regularly published on EveningReport.nz. This article is republished by the Pacific Media Centre with permission.

Article by AsiaPacificReport.nz

In the age of covid-19 we are Jacinda’s team of five million, except for some.

There has rarely been a more blatant case of discrimination against beneficiaries than Grant Robertson’s announcement yesterday that people who have lost their jobs because of the coronavirus will receive weekly payments of $490 per week for 12 weeks and $250 per week for part time workers.

This is great news for those who qualify. Fabulous. That $490 per week is almost double the $250 per week you get on the standard 25+ Jobseeker Allowance and much closer to anything approaching a liveable minimal income.

READ MORE: Al Jazeera coronavirus live updates – WHO sounds warning on covid second peak

On top of that, the new benefit also allows people in relationships to access support if they meet the criteria and their partner earns less than $2000 per week before tax.

And unlike the usual system, the new payments do not appear to be age dependent. So the historically ridiculous assumption that the younger you are, the less money you need to live on does not apply to this new category of claimants.

In extending this support to one group of unemployed people – those losing their jobs because of covid-19 between 1 March and 30 October 2020 – the Labour-led government has, inadvertently or otherwise, made even more apparent the urgency of the recommendations made in 2018 by its very own Welfare Expert Advisory Group (WEAG).

These include lifting benefit levels, introducing individual entitlement to Jobseeker Support while retaining a couple-based income test, and removing youth rates for main benefits.

Why not all?
If some people deserve higher benefits, to be treated as individuals when they lose their jobs, and to not have lower benefits because they are under 25, why not all?

Labour has revealed once again its decades-long predilection for categorising people into the “deserving” and “undeserving” poor, an ideology straight out of the 19th century England from which many Pākehā settler forebears came.

It is also impossible not to speculate that this is a rather unsubtle way of shoring up support for the government in the months leading up to the election. For the newly unemployed, a higher benefit for the period ending October 30 fits nicely with the September 19 election date.

Many of us who have been spent decades fighting out here in the community for the rights of unemployed workers and beneficiaries were hoping that the covid-19 crisis would mean a transformational shift in how political parties viewed the welfare system.

With so many people likely to become newly jobless, surely the pressure on Labour and its partners would be enough to jolt this government into, for example, implementing the WEAG recommendations, and/or establishing an equitable and sufficient basic income.

Instead, Labour seems to believe that the rightful admiration they’ve earned with their effective action on the health aspects of the virus allows them to carry on as usual when it comes to the fate of the most vulnerable people in the country, including a disproportionate number of Māori, Pasifika and stranded migrant workers.

With the September election in sight, Labour is declaring that people who are on benefits not related to covid-19-related unemployment or are stranded migrants simply don’t matter; that their votes – if they do vote – don’t count.

Flawed, punitive welfare system
For over three decades, we’ve had governments who politically and through the administration of a flawed, punitive welfare system have blamed unemployed people and beneficiaries for their situation, rather than treating “them” as “us”.

Yesterday, Labour brought this two-class system into stark focus once again, as it did when it introduced the discriminatory “In Work” payment as part of Working for Families back in the mid-2000s.

During his Budget speech on May 14, Grant Robertson evoked the “great traditions of the First Labour government who rebuilt New Zealand after the Great Depression”.

I reckon the employed and unemployed workers and their families who brought the first Labour government to power in 1935 would be scandalised by Robertson’s evocation of that era at a time when his government is entrenching a brutal divide between the worthy and unworthy poor.

With a hefty lead in the polls, a support party in the Greens who back welfare reform and a population which faces the gravity of high and rising unemployment daily, now is the time for the transformation of our welfare system.

Labour – you could do it, if you only listened to the calls of your true political ancestors and to the voices of all those who most need help now – not just some of them.

Sue Bradford was a Green MP for 10 years 1999-2009, with a focus on employment, social services, economic development and childrens’ issues. Prior to that she worked for 16 years in the unemployed workers’ movement. She continues to be active on community and political issues.This article was first published by Pundit and RNZ today and the Pacific Media Centre/Asia Pacific Report has a partnership agreement with RNZ. This article is republished with the permission of the author.

Article by AsiaPacificReport.nz

The Commentariat

There is a regular commentariat who appear on places such as ‘The Panel’ on Radio New Zealand (4pm on weekdays), and on panels on television shows such as Newshub Nation (TV3, weekends) and Q+A (TV1, Mondays). Generally, these panellists come out in favour of targeted assistance to the misfortunate, in contrast to the provision of universal entitlements. A common refrain is: “I am not poor. Such a policy should not give me more money”.

Most of the panellists on these shows have little understanding about the process vulnerable people must face when applying for targeted help in a political society (such as New Zealand); a society in which substantial and costly bureaucratic efforts are made to deny people help. These processes represent the essence of targeted income support. (Such processes – unkind, sometimes cruel – also apply in other policy fields, with immigration being an obvious example. At present New Zealand has a substantial and vulnerable non-resident population experiencing simultaneous official cruelty from both the social welfare and the immigration agencies of government. And it’s not only government processes that can be cruel; consider the insurance industry with its propensity to seek out ways to not pay out on claims.)

Mechanisms of Income Distribution and Redistribution

A targeted mechanism to provide income support only to those people who meet prescribed criteria is unambiguously redistribution; it is supposed to save money by not helping anyone who does not fit the qualification profile for any targeted income benefit. As redistribution, the economists’ word ‘transfers’ neatly describes such benefits; although the mainstream media, with its love for inflammatory language, generally prefers the pejorative synonym ‘handouts’.

Targeted ‘support’ mechanisms are ‘rules-based’; a person or family either qualifies according to a set of rules, or does not qualify. Complex rules generally require bureaucratic processes. (Some rules – such as the rule that determines what percentage of a persons income must be paid in income tax – follow an arbitrary and seemingly complex formula; the benefits arising from these tax rules are unconditional but far from universal.)

Universal mechanisms are ‘rights-based’. The must obvious example is the right to vote in parliamentary elections, the universal suffrage. New Zealand Superannuation is essentially a universal rights-based benefit, though it does have exclusion rules, and does have rules allowing some qualifying people to get bigger superannuation benefits than other people. (Even universal suffrage has exclusion rules; for example, children are excluded.)

In practice, almost all political societies will feature a mix of rules-based and rights-based benefits. Some support mechanisms are, in essence, universal. Others are, in essence, targeted. Each political society has its own particular mix of rights-based and rules-based benefits.

A universal rights-based publicly-sourced income benefit is an aspect of income distribution. A targeted rules-based income benefit is an income transfer; an act of income redistribution.

Before and After (‘comparative statics’)

Most commentators do not think about mechanisms. Rather they think of a present status quo, without much concern for the mix of principles and historical quirk that have contributed to that ‘present’. This presentbecomes the ‘before’.

When a policy change is suggested – creating a hypothetical ‘after’ – such commentators then wish to know, in relation to its immediate implementation, who will be the winners and who will be the losers. Winners get more dollars ‘in their pockets’; loses get less money.

In this sense, both policies underpinned by universal principles and policies underpinned by targeting principles will create a redistribution, meaning that the ‘after’ distribution is different from the ‘before’ distribution. (An important exception is a purely accounting policy, which will change the description of the present, but not alter the amounts of dollars in different people’s pockets.)

Let’s consider a Basic Universal Income (BUI), as featured last month in Universal Income Flat Tax: the Mechanism that Makes the Necessary Possible and Universal Basic Income (or Basic Universal Income) and Covid‑19. (The BUI is the benefit component of the UIFT mechanism.) Because UIFT is a policy to inject universal distribution principles into New Zealand’s tax-benefit mechanism, commentators such as those mentioned above tend to assume that such a policy is not targeted, and is therefore not useful.

However, the Universal Income Flat Tax (UIFT) policy does benefit some people differently from other people, and turns out to be peculiarly well-targeted in its immediate impact. While the suggested policy to introduce UIFT makes no immediate difference to beneficiaries nor to people grossing more than $70,000 a year, that policy does distribute increased income to the remainder of the adult population, the people in the middle. Thus, a Basic Universal Income (as proposed) targets people earning less than $70,000 a year and who are not beneficiaries.

Universal Basic Income (or Basic Universal Income) and Covid‑19 presents five example people: Janet, Max, Bob, Jill and Fred. Two of these people Bob and Jill – receive increased incomes as a direct result of the introduction of a Basic Universal Income. Thus, the ‘target group’ is non-beneficiaries receiving low and lowish incomes.

The Universal Mechanism at Work

It is important however to note that those whose incomes would not immediately change are better off, not in the sense that they would receive an immediate gain, but in the sense that they would receive an emergency cushion. Thus, persons whose incomes fall below $70,000 in the future will gain support from their cushions. Further, persons who are presently beneficiaries gain support from their cushions when they move into precarious employment. (Much – if not most – employment is precarious in these days of Covid19.)

The policy – based on universalist principles – is both well-targeted and provides an ongoing and automatic (ie non-bureaucratic) mechanism to protect individuals whose circumstances are subject to change. Additionally, the policy stabilises the economy itself, by providing an automatic economy-wide cushion, when economies face contractionary circumstances (such as pandemics and financial panics).

Benefit Adequacy

This particular UIFT policy facilitates a rights-based income distribution that contains fast-acting equalisation and stabilisation measures – the important metaphor here is the ‘cushion’.

The policy does not directly address the issue of child poverty. Nor does it directly address the issue of benefit adequacy for existing beneficiaries. (By targeting lower-income adults, including parents, UIFT does mean that there should be less future child poverty. And, by cushioning people in precarious employment, the policy should contribute to a reduction in the numbers of misfortunate people needing to be beneficiaries.) Nevertheless, the policy does help parents who may be earning lowish incomes, or who may be suffering from falling incomes, or who may be experiencing income insecurity arising from precarious employment (including precarious self-employment). This help mitigates child poverty. The UIFT policy – thanks to its cushioning effect – also gives these employees more bargaining power, enabling some to earn higher wages.

Re benefit adequacy, the adoption of a UIFT policy in no way pre-empts the introduction of other policies that focus on the level of benefits payable to those we call ‘beneficiaries’; those people whose circumstances would determine that their income should include a benefit over and above a BUI.

The presence of a Basic Universal Income (BUI) does not mean the absence of other benefits. (It does however mean that, if a BUI of $175 per week is introduced, then a beneficiary presently receiving $300 per week, would have the first $175 of their present benefit replaced by the BUI. If this person needs an extra $50 per week to ensure benefit adequacy, then they should get an extra $50 per week, giving them a total disposable income – BUI plus benefit – of $350 per week.)

Conclusion

A reform policy need not be either universal or targeted. It may be both universal and targeted. Critics of universal income support mechanisms should be aware of both the universal and the targeted effects of particular policies, rather than indulge in ill-informed scattergun opposition to policies which are based on universalist principles. These critics should confine their criticism to particular universalist policies, and not extend their criticism to all policies that are informed by universalist principles.

The original news story by Nita Blake-Persen was published on the RNZ website, and relayed how “Parents lined up in the torrential rain for hours this morning outside Manurewa’s Work and Income office to meet with advocates who help them with their claims. Without them, they say their desperate pleas for cash are almost always denied” – see: People queue from 2am outside Work and Income for help.

The first person in the queue, who arrived at 2am, told the reporter he needed a grant, as he was struggling to buy basic necessities for his three children: “I need to buy long pants, jumpers, jerseys and that, and then I need to get food, because I stay in a three bedroom house – I pay $610 a week.”

Like others lined up at the Work and Income office, he had come on that particular Thursday because the advocacy group Auckland Action Against Poverty (AAAP) come along on that day every week to help beneficiaries obtain their full entitlements. Those advocates claim that beneficiaries are otherwise being turned away from proper grants.

One of the AAAP advocates appealed to the Prime Minister to sort out the situation – Kathleen Paraha challenged Jacinda Ardern, saying: “The government needs to get off their bums and come down and have a look for themselves.”

The story has provoked some strong reaction on Twitter, with many saying it epitomises this Government’s failure to deliver the transformation it has promised. For example, Newsroom editor, Tim Murphy, stated “This is one of those stories that will be remembered about a government’s time in charge”, and “The more that this Governments term progresses, the more clear it is that that they are at their core no better than the last guys, or the ones before that. Virtuous media soundbites & photo ops aren’t making a difference”.

And his business journalist colleague Bernard Hickey pinpointed the conservative fiscal approach of Ardern and her Government as being responsible, saying the 2am welfare scenes occurred “At the same time as a ‘progressive left’ Government has a $7b budget surplus and has net debt so low that even Moody’s says we could almost double it and keep our AAA rating. Yet…budget Rules…”

Political activist and former MP Sue Bradford suggested that the Government was not following through on its promises: “Minister Sepuloni used to talk about the culture change she wanted at Work & Income, but the ongoing desperation of people who need help to get the most basic of needs from W & I flies in the face of Labour’s supposedly ‘kinder’ approach to welfare.”

In the blogosphere, some on the political left expressed their frustration. Steven Cowan blogged to say the continued plight of beneficiaries was a case of Paying the price of Jacinda Ardern’s austerity policies. He argued “these Auckland beneficiaries provide more stark evidence of a society where the depth of poverty continues to deepen and the chasm of inequality continues to widen”.

And he pointed out that “It was only two months ago that the Labour-led government declined most of the recommendations of its own welfare working group”. Similarly, Martyn Bradbury argued the incident was an example of The Toxic culture of WINZ & MSD laid bare,

But is it really fair to see the 2am Manurewa event as representative of the Government’s failed welfare reform agenda? The Minister of Social Development, Carmel Sepuloni, went on RNZ’s Checkpoint programme to dispute this version of the story – see: Long queues outside MSD ‘shocking’ but not the norm – minister. Sepuloni’s reaction to the story was: “I saw the image and I saw the story and no one would pretend that it’s not shocking to see that… that is not a normal occurrence at MSD (Ministry of Social Development) offices around the country.”

The Minister’s main point was that the queues from 2am in this instance were not directly due to Work and Income decisions, but because the advocacy group AAAC had arranged for beneficiaries to gather in a way that they needed to arrive early to get the chance of advocate help.

She said: “They’re not meeting with MSD at that hour, they’re actually meeting with their advocates… We tell AAAP… on Thursdays they have guaranteed appointments for their clients, that we will see them on that Thursday – so there’s no reason for them to turn up at that hour of the morning.”

In another interview, Sepuloni explained “I am advised that the long queues seen at Manurewa are the result of benefit recipients being encouraged by their advocates to all congregate at the same time on Thursdays”. She has also called on AAAP to work differently to help beneficiaries: “The queues can be avoided if AAAP works with MSD to deal with these cases in an orderly way across the week, rather than creating a bottleneck that forces everyone to be there at once in the rain” – see Michael Daly’s Auckland Action Against Poverty hits back at Government over WINZ queues.

The same article reports Work and Income regional commissioner Mark Goldsmith claiming that the AAAP advocacy group had refused “numerous attempts” made to work together. And, further, that “We would be happy to pre-book appointments with clients and AAAP advocates so clients don’t have to wait, but so far AAAP haven’t agreed to this.”

The group has responded, disputing this: “It’s categorically untrue we’ve refused to engage with MSD re:Manurewa.” And in open letter to the Government, published on The Spinoff, the group say: “When you say we should go to different offices to spread out the work of Ministry Social Development staff and avoid ‘creating a bottleneck’, what you are admitting is that MSD staff all over Aotearoa New Zealand are failing the people they are meant to be assisting. You are admitting that there is something seriously wrong with our welfare system” – see: We should not have to do MSD’s job for them.

The group also challenges the Government on its welfare policies in general: “There is enough money to end poverty but you need to be bold. You need to tax wealth and redistribute it into social welfare and public housing. You need to spend that surplus you are sitting on. It is socially and fiscally irresponsible to allow people to continue to live in poverty. We would like to see this rhetoric on well-being and kindness materialise in the lives of the people we work with.”

To get a better understanding of the work that the AAAP group is doing with welfare beneficiaries at the Manurewa office, it’s worth reading Michael Daly and Joel MacManus’ Minister responds to Manurewa Work & Income queue problem. In this, it’s explained: “The arrangement with Work and Income was that AAAP advocates were allowed to help 65 people in the queue on Thursday mornings. There were usually about seven advocates at the office, and they interviewed those 65 people.”

AAAP coordinator Ricardo Menendez March is reported saying: “In reality we always see far more. People have the right to have a support person at Work and Income… Throughout the day we end up helping far more people, explaining to them the process and making sure the case managers are doing their work and following the law adequately”.

Menendez March says that this has been going on for about two years, during which time the queues have always existed but are getting worse. Why? He says: “We know beneficiaries have been the most disproportionately impacted by the rising cost of rent. More people than ever require hardship grants to get by.” And according to this article, “The Manurewa WINZ office gave out $698,000 in Special Needs Grants for food last year, the highest in the country by more than $200,000.”

This article is also useful for providing the Government’s side of the story on what it is changing at the frontline to help welfare recipients, with Sepuloni stating: “this Government has sent a clear instruction to frontline MSD staff that anyone coming in is to be provided with the full financial support they are legally entitled to…. As a result of this instruction the number of hardship grants provided by this government has increased 60% year on year. The value of hardship grants has gone from $81m to $128.5m from March 18 to March 19.”

In addition, the article points out that “The Government has also announced funding for 263 new frontline MSD staff over the next 4 years.”

Perhaps this means that Work and Income offices will also stop referring beneficiaries to loan sharks to help raise their necessary funds, as reported recently by 1News – see: ‘Fundamentally wrong’ – Ministry referring beneficiaries to loan sharks, activists claim.

What else can be done to alleviate the plight of those on benefits? University of Auckland economist Susan St John has come up with a list of possible solutions that could be implemented immediately. Her “emergency package” includes the “Payment of the full Working for Families tax credits to all low-income families”; “An increase in the allowable income before any benefit is lost to 10 hours at the minimum wage or $170 per week”, and “A suspension of all student loan repayments for families who get Working for Families” – see: Poverty: not an earthquake but still a crisis.

As to what reforms the Government has already come up with, St John is derisory: “The tiny changes made in the 2019 budget will miserably fail to make a difference to the immediate problem. Worse still they don’t come in until April 2020.”

And like other economists, she criticises the fiscally-conservative approach of the Government as being at the root of their failure to act: “It may be laudable for the Government to be fiscally responsible, but not in the very narrow ways it has chosen. The nation is facing a crisis, it’s like a slow earthquake shaking our values to the foundation. You don’t store up goodies for the future when faced with life damaging catastrophes, you invest in reversing the damage and in preventing further damage.”

Finally, is there a need for reform of how the welfare system treats people in relationships? A new report out last week challenges the “traditional” and “current rules” in which people’s eligibility for benefits is based on whether they are in “relationship in the nature of marriage” – see Sarah Robson’s Welfare system needs to change how it defines relationships – report. And for a personal version of this story, see Sarah Wilson’s The consequences of love: how finding a partner left me penniless.

There’s an argument that with KiwiBuild so utterly discredited as the Government’s flagship policy for this term in power, Labour should now be shifting quickly to something more radical and progressive. State provision of quality and cheap rental housing is still the best remedy for the problems of housing-related poverty and homelessness. Therefore, perhaps the state housing sector – which has largely been neglected not just by this government but previous National and Labour administrations – should become the focus of efforts under the new “housing reset” following last week’s Cabinet reshuffle.

This would effectively mean a shift to the left, which is what I argued last week is a possibility, given that Megan Woods might well be “the first genuine left-wing housing minister in ages” – see: Is the government now more serious about the housing crisis?

Responding to this, Chris Trotter has made the case for what a leftwing shift in housing and state housing policy would look like: “It would kick-off with the complete scrapping of KiwiBuild. In its place, a state-planned and executed programme of state house construction would be announced. Instead of 100,000 ‘affordable homes’ for the frustrated sons and daughters of the middle-class, Woods’ programme would commit to constructing 100,000 state houses for the nation’s poorest families to move into. A state-owned construction company would be required, along with state-owned prefabrication plants. Such a programme would necessitate casting aside practically all of the policy assumptions of the last 35 years” – see: If Megan Woods really is a left-wing housing minister, then pushing for a left-wing shift in housing policy is the last thing she will do.

Trotter goes further in explaining the theory of a leftwing state housing policy: “The construction of so many housing units, their rentals fixed at 25% of the tenant’s income, would very quickly impose massive downward pressure on rents. The business model of the ordinary property investor would be wrecked – forcing more and more of those landlords at the margins to sell-up and exit the market. With more and more properties being offered for sale, prices would plummet. The very people for whom KiwiBuild was originally created would now be able to purchase their first home at an affordable price. By placing its thumb firmly on the supply side of the market’s scales, the state would have solved the housing crisis. At least, that is how a “left-wing shift” in housing policy is supposed to work.”

However, Trotter doubts that the current administration would be bold enough to deliver such a traditional policy mechanism. Furthermore, they’d have to be willing to put up with a lot of negative reaction from the business community and Labour’s middle class voters etc.

Given the worsening housing crisis, it’s not only leftists calling for this Government to get serious about state housing. The OECD report out last week about the New Zealand economy and wellbeing was explicit in recommending that in the area of housing, the Government “should do more to focus on people on low incomes”, and that this meant they should “reallocate money from KiwiBuild to social housing” – see Jason Walls’ The OECD says the Government should make significant changes to its KiwiBuild policy.

Phil Twyford responded to this call for a shift from KiwiBuild to state housing by pointing out the key problem with this: “The idea of just transferring the KiwiBuild allocation across to public housing doesn’t really work because it costs a lot of money to build public housing, as you continue to own them.”

Nonetheless, the OECD report’s primary author, Andrew Barker, has pointed out that in New Zealand, “social housing supply is low by international comparison and there are poor outcomes for at-risk groups, including overcrowding, low quality housing and high homelessness” – see David Hargreaves’ OECD report notes lack of success of KiwiBuild programme and says Govt should focus more on low-income renters.

He also explained that resources directed at state housing would be more beneficial than being directed at more wealthy citizens, saying “Better targeting of government programmes (including KiwiBuild) through focussing more on low-income renters would enhance overall well-being”, and that “Further expansion of social housing in areas where there are shortages has the potential to deliver improvements across a number of well-being dimensions, including health, education and life satisfaction”.

Even on the political right there now seems to be a realisation that an increase in state houses needs to occur. For example, National’s Housing spokesperson Judith Collins is in favour of a greater public housing build.

And rightwing political commentator Matthew Hooton has long argued that the Government must think bigger about supplying housing than the limited and piecemeal approach of the Labour Party. Like Trotter, he suggests that instead of the 10,000 new state houses promised by the Government, this should be escalated to 100,000.

In his latest column on the matter, however, he adds a rightwing element to such a massive state house-building programme: “Better still, [Twyford] would have implemented KiwiBuild as the construction of 100,000 new state houses which would then be sold to tenants under a rent-to-buy scheme. While the Labour left would have whined about privatisation, such a scheme would be a beautiful fusing of the politics of Michael Joseph Savage and Margaret Thatcher” – see: Why Housing Minister Phil Twyford must go (paywalled).

Any sort of mass programme of state building is unlikely, according to Newsroom’s Bernard Hickey, who argues that the current government is just too obsessed with leaving the private sector to fix the housing crisis (even via KiwiBuild, which essentially relies on the private sector), because they don’t want to have to spend money – see: How Phil Twyford lost housing and why KiwiBuild failed.

According to Hickey, the Government is “mindlessly” stuck in the “dark days of late 1980s”, keeping to rightwing fiscal policy that is “horribly out of date” and is precluding them from properly investing in things like state housing.

Hickey says this conservative thinking from Ardern, Robertson and Twyford is having horrible consequences: “They fear an unknown and yet-to-exist crisis in the future when a very present and known crisis exists right now and is right in front of their noses: a massive shortage of affordable and healthy housing that has consigned 250,000 kids to such poverty that 40,000 of them get so sick each year with respiratory and skin conditions they end up in hospital. Their parents are mired in working or non-working poverty that is impossible to break out of without affordable and healthy housing.”

So why is the lack of state house building under the current Government not causing outrage? Perhaps it’s because many people actually mistakenly believe that a massive building programme is already underway. While it’s certainly true that Labour is delivering more than National – which is hardly a surprise or something that Labour supporters can really see as a triumph – it’s still on a tiny scale and one that is more in line with National’s efforts than with current needs.

To get a sense of the increased state housing build, see Henry Cooke’s article, While KiwiBuild falters, state house build rockets ahead with ninefold increase. This article explains how it’s possible that the Government can argue there has been a massive increase in state housing: “There are 2700 state homes under construction, with 1389 due for completion before July 2020. In June 2016 just 282 homes were under construction.”

Although the National Party might quibble with those figures – especially since many of the new builds are actually houses planned and consented by the previous government – there has definitely been an increase. The problem is, given the burgeoning population and greater need resulting from worsening affordability of home ownership, it’s a tiny increase.

Significantly, even under Labour, the proportion of state houses will remain at its lowest point since the early 1990s. Back then, there was one state house for every 50 citizens, and now there is only one for every 70 – for more on this, see my Newsroom column from late last year: Will state housing fix what KiwiBuild can’t?

And many of the new state houses are merely replacing older state houses that have been demolished, meaning that the net increase of state houses is somewhat less impressive than the Government likes to suggest. The new builds also tend to be much smaller than previous state houses.

What’s more, when Housing New Zealand demolishes state houses, the new developments that replace them often involve the sale of some of that state housing land to private developers and KiwiBuild homes – see Mike Treen’s Phil Twyford the privatiser of state assets.

Added to that, not all “new social housing” is actually new. The incorporation of community and council housing into “public housing” means that the increasing house number count might be much less than is presented to the public. For example, earlier in the year Isaac Davison reported: Only one in four of Government’s new public housing places in Auckland are new builds. In this, it is explained that a large proportion of the supply of “new public housing” is actually “redirects” in which properties sourced from the private sector or “non-government providers – like councils or charities – are moved on to government funding”.

The community housing sector is also critical of the way the Government is funding social housing provision, which they say is benefiting the private sector developers. Isaac Davison and Ben Leahy have reported on this, citing one community housing provider worrying that “that Government funding will be pocketed by private owners” – see: ‘Short-sighted’: Govt looks to developers to ramp up social housing – angering non-profit groups.

The community sector is also disappointed that the Government isn’t funding them to build more social housing. Todd Niall reports: “Social housing providers in Auckland say they are being restricted by the absence of capital funding, once provided by the Government. One of the largest said it would not be able to continue building new homes, once its current programme of 167 homes is completed. The body representing 21 Auckland providers said the Government appeared to now be ignoring them, at a time when they could do more for those needing affordable homes” – see: Auckland social housing developers say building will stop because of government funding vacuum.

Meanwhile the housing affordability crisis for those at the bottom just gets worse, as indicated by the official state housing waiting list, which has doubled over the last couple of years and is at its highest point for a decade – see Henry Cooke’s Public housing waitlist climbs to 11,655 as winter begins to bite. And in addition to the increased numbers waiting for housing, waiting times seem much longer.

The factors behind the increase in state housing demand are discussed in Katarina Williams’ article, How NZ’s social housing problem is expected to worsen before it gets better. This also explains why “1261 public houses across the country were sitting vacant at the end of March”. And Auckland Action Against Poverty coordinator Ricardo Menendez March is quoted saying “The Government needs to ramp up the target of state homes being built if it is serious about making a dent on the social housing waiting list”.

And while the proportion of state houses continues to shrink, the private sector just becomes more and more profitable, with landlords continuously putting up rents, turning the “housing crisis” into a “rental crisis”. The latest report on this, out today, says that rents in the capital are growing twice as fast as wages – see Julie Iles’ Wellington rent rises outstripping wages and it’s tipped to get worse.

Finally, the Government’s low ambitions on state housing are putting lives at risk. This is best illustrated in a harrowing RNZ Checkpoint story and interview by Lisa Owen – watch: Working poor: The long, excruciating wait for a state house. This follows the story of one family, on the waiting list for more than four years despite their youngest child recently having “meningitis, prompting a doctor at Middlemore Hospital to write a letter saying the family’s overcrowded conditions were putting the baby’s health at risk.”

Have the political left and supporters of the Labour-led Government been conned again? Big changes were promised in welfare reform, but with the response to the just-released working group report on the welfare system, it looks like very little is actually going to be delivered.

Of course, the left has already been feeling shocked and disillusioned by Jacinda Ardern’s capitulation over the capital gains tax proposals, which is raising serious questions about the Government’s promised “Year of Delivery”. And now the weak response to the Welfare Experts Advisory Group report is essentially “Capitulation Number Two”.

Once again, the Government has opted for caution and conservatism instead of making bold reforms recommended by experts. Leftwing supporters and those who care about a properly functioning welfare system are outraged.

The report released on Friday was radical, with a solid critique of the state of the welfare system, and 42 recommendations for fixing it. But the Government response has fallen vastly short. The Minister of Social Development, Carmel Sepuloni, has come out to say that only three of those recommendations will be taken up. Of course, she’s suggesting that more reforms might happen in the future, but few observers appear to have confidence in that eventuating.

One of the best explanations of the Government’s response is Henry Cooke’s column yesterday Greens fail to win major change with welfare review.

In terms of the three working group proposals chosen by the Government, Cooke explains these are hardily bold: “Given the sweep of the report, these changes seem pretty small. Labour and the Greens have been campaigning on removing the sanction since before the election, and have delayed doing it until this report has come back. The change won’t go into effect until April 1, 2020. The sensible abatement rate changes track with minimum wage hikes and are so non-controversial that National agree with them. New staff are hired all of the time. You can even quantify the smallness. The changes as a whole will cost $286.8m over four years. The working group estimated its full suite of changes would cost $5.2b a year – more than the Government’s entire operating allowance.”

Activist and former Green Party MP, Sue Bradford isn’t mincing her words, saying the Government’s “dismal” response to the report recommendations indicates it’s “neoliberal”, by which she means economically-rightwing and still clinging to Establishment and punitive approaches of the last few decades – see: No hope for progressive welfare reform from this government.

Bradford includes the Green Party in this critique. She says the Greens are good at saying the right thing on welfare but, when it counts, the party is wedded to neoliberal practice. Bradford concludes that for the political left, this latest capitulation proves that a new leftwing political party is necessary.

Other commentators are also acknowledging the Greens’ failure to secure welfare reform. Henry Cooke points out that the party had increased its reputation with the left and the poor on the basis of their 2017 election campaign on reforming the welfare system, but says “The Greens are not living up to Metiria Turei’s promise of transformation.” Given that they promised so much, but are delivering so little, he suggests they now “need to be asking questions of themselves”.

Disappointment with the Greens on this appears widespread amongst activists. Leftwing blogger Steve Cowan says that it’s a failure of Green Party leadership, and especially of co-leader Marama Davidson, who he says “has proven to be yet another routine establishment politician betraying the interests of the very people she claims to represent” – see: Why is Marama Davidson in Parliament?

His disillusionment is clear: “We’ve been shafted again. Watching Marama Davidson blandly smiling as Sepuloni denied beneficiaries and the poor a better and more secure future reminded me that in 2017 Davidson was making speeches at South Auckland rallies, lambasting the National Government’s failure to address growing poverty and inequality. All that passion has faded away to bland smiles and empty words trotted out about she knows about the hardship that many people are enduring and that she will continue to work hard for them.”

And for Cowan it’s not just a case of Davidson and her caucus lacking courage, but that they have essentially revealed their true colours now that they are in power: “But her ‘radicalism’, if it was ever there in the first place, has gone missing in the impenetrable centrist fog that now clings to the Green Party like a wet blanket. She displays exactly the same kind of reverence for ‘politics as usual’ centrist politics displayed by the Labour-led government and her fellow Green MPs”.

On the report and the Government response in general, Cowan is highly sceptical, suggesting there’s been an attempt to bury this embarrassing capitulation: “Was it just a coincidence that Jacinda Ardern’s engagement to Clarke Gayford was announced on the very same day that the Labour-led government announced its shocking response to the Whakamana Tangata: Restoring Dignity to Social Security in New Zealand report? If the motive really was to deflect attention that Jacinda Ardern and her government have shafted ordinary people once again, it kinda worked. The engagement news was the leading item on one of the six o’clock news bulletins (TV3’s Newshub) while it was trending number one on Twitter for most of the day, with the welfare report nowhere to be seen” – see: Government response to welfare report is a shocker.

Others have also expressed scepticism about the Government’s handling of the release of the report. Some have noted that the timing for the release and response from the Government was late on a Friday, and at a similar time to the long-anticipated (but thwarted) Pike River Mine re-entry attempt.

Auckland University economist and welfare expert Susan St John declared her suspicion: “Releasing the Welfare Expert Advisory Group report at 2pm Friday (3rd May) just before the weekend at a far-flung West Auckland venue miles from the train station was a masterstroke of political strategy”, and she complained that the actual launch that she attended was strangely uninformative – see: I am not a conspiracy theorist but….

St John suggests that the whole working group approach lacked transparency and public engagement: “For 11 months no one breathed a whisper of what the WEAG was concocting. All consultation was one way to the WEAG with no outsider trusted to respond to any of the development of ideas. In stark contrast with the Tax Working Group process, no background papers and no interim report were released. There were no public forums preceding the report, and no interviews were given”.

She reports from the launch that the audience were less than impressed with the proposals being adopted, and the timeframes involved: “The Minister’s pre-Budget announcements were breath-taking in their superficiality. There were audible gasps of disbelief when she announced that the sanction applied to sole parents who do not name the father of their children would not come in until 2020.  Another lowlight was very minor changes to the abatement thresholds that are to be phased in over 4 years.”

St John is also highly critical of the “lost opportunity” to fix many different elements of the welfare system such as Working For Families. And she suggests Labour is incapable of facing these problems with the welfare system because the party is complicit in creating many of them.

There are so many important recommendations in the report that the Government appear to be ignoring, but the biggest is benefit levels. Henry Cooke explains this best: “The report presents a coherent argument for greatly increasing benefit rates, indexing them to inflation, and reforming the way relationships are treated by the Ministry of Social Development (MSD). It makes the point that relative to wages, benefit rates have fallen an extremely long way since reforms in the 1980s and 1990s. If implemented, this report would truly represent an ‘overhaul’ of the benefit system, and this Government could make a pretty good claim to being ‘transformational’.”

The issue of benefit levels is discussed by Tim Watkin in his excellent column, Another chance to be transformational rejected… Labour’s cautious welfare response. He says the report “recommended a massive 47 percent increase in current benefit levels. Those would be hugely controversial reforms… or, you could say, transformational. Because the report says if its recommendations were adopted it would lift 40 percent of children in poverty out of that plight. And that it could be done in two years.”

Watkin explains one of the reasons for the proposed increase is the increasing gap between beneficiary incomes and others: “What people seldom consider though is that since then wages and salaries have continued to grow. Super, linked to wages, has grown to. But other benefits – with any increases linked to inflation, not wage growth – have not been increased nearly as much. Until, that is, John Key and Bill English famously raised them in 2015. So the gap between work and welfare has grown since the 1990s”.

Therefore, on this rejected recommendation and many others, Watkin says Labour and the Greens are showing their real colours: “Sepuloni agrees the welfare system is not working. Greens co-leader Marama Davidson agrees the welfare system is not working. And then they commit to ignore the report’s big recommendations. They say no to up to 47 percent benefit increases, preferring ‘a staged implementation’. The call for ‘urgent change’ is rejected. Remarkably, Davidson has put her quotes into the same press release with Sepuloni, tying the Greens to this approach when they could have been dissenting from the rafters. The political and institutional reality is that no government can make these changes overnight. But the cold water thrown on this report underlines what we’ve learnt about this government in its handling of tax, its debt level, labour reform and more. It is not just incremental, it looks timid. There is certainly no sign of it being transformational.”

Once again, therefore, as with other potentially-transformative change in key areas for the political left, the Government has lost its political values and courage: “Ardern has political capital to burn after the Christchurch attacks and twice in three weeks she has chosen not to spend it. She has the political cover of National having increased benefits under Key (so just how critical could Bridges be?)… Yet Labour has chosen not to go to the wall for something it believes in. Again.”

But not all is lost. The report is going to have an ongoing impact. Max Rashbrooke writes about how the report represents a major change in thinking about beneficiaries. Previous and existing models saw “welfare recipients as akin to naughty children, needing a harsh overseer”, whereas “the experts’ report is an attempt to put a nurturing, caring assistant at the heart of the welfare system” which sees beneficiaries as needing support – see: At last welfare emphasis will move from punishment to support.

Also, although Chris Trotter bemoans that the fiscal conservatism of Finance Minister Grant Robertson is behind the Government’s rejection of progressive welfare reforms, he thinks there is still a good chance that Robertson and Sepuloni might yet be able to create a new world “of ‘active’ labour market management and planning” – see: The State and welfare: Opportunity or cost?

Finally, for a first-hand account of how well the welfare system works (or doesn’t), and how life on a benefit could be improved, see Hannah McGowan’s The dehumanising reality of life on a benefit in New Zealand.