With rising unemployment, unprecedented inequality and obscene child poverty, welfare cuts are not an achievement.

(This is part one of a two-part series on the current “welfare reform” policy; part two is here)

Although Paula Bennett won’t bother measuring child poverty, she’s measured how much her welfare “reforms” are going to save: $1.6 billion.  Contrary to Bill English’s assurances, this is the expected follow-up to an obscure and expensive statistic about the “lifetime cost” of beneficiaries, whatever that means ($78 billion, if you’re interested – and only 5% of that is for unemployment beneficiaries, but that distinction will be obscured by the new categories).

Saving money on welfare would be great if it meant people were rising above the social safety net rather than having it pulled out from under them. If the economy was working and everyone was holding down good jobs, we could save on welfare, like we did four years ago when unemployment was at its lowest in decades.

But we can’t fix the economy by cutting welfare – that’s confusing cause and effect. When unemployment is high and getting higher, inequality is at record highs and we have 270,000 children living in poverty, mostly from beneficiary families, we’re going to have to spend more on the safety net if we want to be humane, not less.

Current government policy basically amounts to: lots of people relying on welfare –> push more people off welfare into paid work –> make a crowded job market even more crowded –> lots of people relying on welfare. This vicious circle does nothing to acknowledge that there are problems with the economy and the workforce as well as problems with beneficiaries – and it certainly does nothing to fix these wider issues. Pleading with employers to hire boot camp graduates, and keeping the minimum wage low based on a discredited neo-liberal premise, is not a sufficient job-creation strategy; and sacrificing to the gods of neo-liberal capitalism until economic growth comes back is not working so far.

So I find it rather disturbing that Bennett is boasting about cutting welfare as if that’s the answer to poverty and unemployment.

Of course, welfare reform isn’t all about saving money – $1.6 billion isn’t that much to a government who spent the same amount bailing out South Canterbury Finance, and some of the changes will cost more than they save.

But this does confirm that what we’re basically talking about with “welfare reform” is welfare cuts. The fact that Bennett can portray welfare cuts at this time as a good thing is a symptom of the deep-set benny-bashing sentiments of the general population – which I’ll discuss in my next blog, on the basic message of “welfare reform”.

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2 comments

  1. Pingback: The central message of welfare reform – and why National needs to miss the point « Cut Your Hair
  2. Pingback: I am so sick of this obvious lie, pt 2 | Cut Your Hair

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