Problem Definition Report of the Welfare Working Group New Zealand - - PDF document

Alternative Welfare Working Group Cindy Kiro

Māori and Welfare Reform September 2010

Problem Definition

• Report of the Welfare Working Group
• New Zealand can’t afford the current growth of

welfare especially sickness benefit and disability allowance

• High numbers of sole parents
• Switching between benefits – are people manipulating

the system?

• Should

we fund the system differently? Social insurance or other?

• Pathways to employment – especially for youth

Problem Definition contd.

• Inequality
• NZ unequal in OECD since late 1980s
• Māori and Pacific most deprived
• Macro economic environment
• Economic recession
• Labour Market – jobs harder to get and people work longer

hours

• Housing un-affordability
• Demography
• Aging population and reliance on a smaller pool of children
• Māori and Pasifika fertility
• Culture and Racism

Income changes by decile (BHC) 1988-2001, Deciles 1-9

• 10%
• 5%

0% 5% 10% 15% 20% 25% 1 2 3 4 5 6 7 8 9 Decile

% change at the top of the decile

Source: Perry, Ministry of Social Development, 2010

Policy Mix

• Job summit 2009
• Tax reforms – budget 2010
• Corporate and personal income tax cuts
• Rises in GST from 12.5 – 15%
• Welfare Reform 2010-2012
• Welfare Working Group Forum
• likely to target sickness and disability benefits,

some unemployment and sole parent entitlements

Māori in the New Zealand Labour Market

New Zealand Household Labour Force Survey, Statistics New Zealand 2010

Income inequality and tax rates

What about assets inequalities?

% of homes owner- occupied, Auckland, 1986-2006, DPMC 2008

Home ownership rates, 1986-2006

58 60 62 64 66 68 70 72 74 76 1 census years 1986 1991 1996 2001 2006

Housing affordability now: The Social Report 2009

“Using AHC measures (ie taking housing costs into account) child poverty rates rose from 2007 to 2008, after falls from 2001 to 2007. This occurred because housing costs rose sharply from 2007 to 2008, especially for low-income HHs, overwhelming the final BHC gains from the WFF package” Perry 2009

Percentage of all household’s paying 30% or more of net income for housing

Benefits against average incomes: more marginalisation

Source: Perry, Ministry of Social Development 2010

200 400 600 800 1980 82 84 86 88 90 92 94 96 98 00 02 04 06 08 2010 As at 1 April $ per week ($2009) DPB+2 DPB+1 IB single 18+ UB single 25+ UB+2 IB+2 Net average earnings

Proportion of All Children Aged 0-17 Years Who Were Reliant on a Benefit Recipient by Benefit Type, New Zealand April 2000-2009

5 10 15 20 25 30 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Percent of Children 0-17 years (%) Year Other Benefits Sickness Invalids Unemployment Domestic Purposes

Seasonally Adjusted Unemployment Rates vs. Numbers of Unemployment and Domestic Purposes Benefit Recipients, New Zealand 1990-2008

50 100 150 200 250 300 350 2 4 6 8 10 12 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Number of Benefit Recipients (Thousands) Unemployment Rate (%) Year Unemployment Rate Number on Unemployment Benefit Number on Domestic Purposes Benefit

New Zealand Children: Elderly

Natalie Jackson, Centre for Population Studies, Waikato University Natalie Jackson, Centre for Population Studies, Waikato University

Investing in demographic ‘dividends’ now

Future labour market/ tax base