New Zealand welfare system out of control

David Barber

Wellington (dpa) – The state welfare system in New Zealand, which pioneered cradle-to-grave care of its citizens 72 years ago, is “unsustainable, outdated and fragmented”, an official inquiry reported Monday.

It said that one-in-eight people of working age – or 356,000 adults – were currently receiving welfare benefits in New Zealand.

Nearly half of them have been living on welfare cheques for at least five years, and 100,000 have spent at least nine of the last 10 years on benefits. About one-in-five New Zealand children live in benefit-dependent families.

The Welfare Working Group, established by the government in April to review the benefit system, said that its cost would rise from 6.5 billion New Zealand dollars (4.7 billion US dollars) last year to an unsustainable 50 billion New Zealand dollars if everyone currently getting a benefit stayed on it for life.

“There is evidence that an increasing number of people get stuck in long-term benefit dependency,” said panel Chairwoman Paula Rebstock.

“We have concluded the current benefit system ignores the importance of paid work to the wellbeing of New Zealanders.”

She said that young people, those aged 50 to 59 and indigenous Maori and Pacific Islanders were most likely to be on long-term benefits.

“The benefit system is meant to give our most vulnerable citizens support when they need it and to provide it in a way that helps them get back into work and get on with their lives. It is also there to help those who need permanent or long-term support and cannot reasonably be expected to be in paid work,” Rebstock said.

“But the large and growing number of people currently on long-term benefit support clearly indicates the system is not achieving these objectives. It is failing too many New Zealanders. If we want to raise living standards in New Zealand, we need to make much better use of our human potential and ensure everyone has the training, opportunity and encouragement to get into paid work.”

Prime Minister John Key was quoted in Monday’s Dominion Post newspaper as saying that rising levels of welfare dependency were a major concern, and his centre-right government would adopt at least some of the group’s recommendations.

He said the system had gone beyond what was established in 1938 by New Zealand’s first Labour government, which passed a Social Security Act providing a comprehensive range of welfare benefits.

The group is scheduled to make its final report with recommendations by year’s end.