Penal welfare: it’s a crime to be broke

concentration-camp-528969_1280A recent Radio NZ interview with Professor Darrin Hodgetts makes for grim listening. Hodgetts – a poverty researcher – talks about “penal welfare” or the criminalisation of the poor that is exemplified in our punitive work-first welfare regime. Entering a WINZ office, he claims, is not too dissimilar from entering a corrections facility. There is security, intrusive questioning, and no privacy (although as one beneficiary pointed out to me at least prisoners have access to drinking water and toilet facilities). Our current welfare system punishes the poor simply for being poor. This, as Hodgett’s explains, is despite decades of evidence both in New Zealand and overseas indicating that a punitive approach to welfare does nothing to alleviate poverty.

It seems incredible that successive Minsters for Social Development, irrespective of their party allegiance, have supported welfare policy that lacks any evidential basis for alleviating financial hardship. We don’t even have to look further than our own backyard for evidence that the harsh treatment of beneficiaries does not lead to a reduction in poverty. Over the past 35 years New Zealand beneficiaries have had to contend with increasingly punitive welfare policy coupled with low benefit rates, and the numbers of those experiencing poverty have risen – not dropped. In 1991 the National Government cut benefit levels. These cuts were severe, yet they did not decrease poverty. They did not drive people into the workforce in record numbers. Instead as CPAG has reported “the benefit cuts in 1991 significantly increased poverty rates generally”. Poverty rose steeply to unprecedented levels in the mid-1990s.

Apart from a period from the late 1990s to 2007, when the economy was performing well and unemployment was low, poverty has continued to increase in New Zealand. In 2007 an MSD report stated that for most beneficiaries household income was only 50-60% of median household income with many falling as low as 40% (CPAG defines poverty in income terms as households living at below 60% of the national median income). Then Associate Minister for Social Development Ruth Dyson admitted that comparatively beneficiaries were worse off than they were in 1991. While the 2015 Budget raised benefit levels for those with children for the first time in 42 years, this small rise came with strict work conditions, and has done little to solve the problem of children and their parents living in poverty.

Foodbanks – a clear indicator of poverty – multiplied after the 1991 benefit cuts. They have now become an established part of this country’s charitable sector. Beneficiaries often have insufficient income to cover day-to-day expenses and so are forced to rely on Foodbanks. Food was described by one of my research participants as “the only variable part” in her budget. It is a discretionary expense frequently cut in order to meet other more pressing financial commitments such as rent. The latest Salvation Army State of the Nation Report Moving Targets reports that during 2015, The Salvation Army distributed more than 55,100 food parcels to over 28,700 individuals or families.

Harsh welfare policy is based on the premise that those in poverty are to blame for their own situation. Policy is founded on two claims: that those on a benefit have a poor work ethic and that benefits make people dependent. As Darrin Hodgetts points out, these are not new ideas. These groundless beliefs have been round since the days of the Work Houses in England when the poor were institutionalised in order to discourage their reliance on welfare. That policy only added to the misery of the poor and did nothing to reduce the numbers of people living in poverty. In fact there is little evidence for either of these claims. A CPAG report cites research from Canada, Denmark, Finland, the United Kingdom, the United States and New Zealand to support their claim that reliance on welfare benefits is not related to a poor work ethic. The same report suggests that there is little evidence that dependency on welfare leads to a long-term reliance on welfare. There is, however, ample evidence to show that those on welfare want to work.

People rely on welfare for different reasons: some cannot find jobs, some are unwell, some are caring for children. To say that welfare leads to dependency is to ignore the fact that dependency is the point. Recipients are dependent on welfare because they have no other source of income at that point in time: they need welfare to survive. As evidence in this country demonstrates, reducing welfare payments to below the level of subsistence and attaching receipt to harsh conditions does not reduce people’s need for welfare, and it certainly does not reduce poverty.

Hodgett’s challenge to try a more humane approach to welfare makes sense. As CPAG have argued, there is evidence to support the assertion that beneficiaries leave welfare when they can, and generous welfare regimes can be the most effective in assisting people back into the workforce. Why then doesn’t New Zealand try a less punitive approach? We have clear evidence that what we are doing does not work – so why keep doing it? Instead of policy based on ideology and lacking evidence-based analysis, why don’t we try another approach to welfare? As Catriona MacLennan recently suggested, we need to change the way we think about welfare. Welfare should not be framed as society’s burden, but rather as a responsibility to help those in need. Policy based on this reframing might mean we could actually do something to help those in poverty rather than simply punishing them for it.

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  1. Pingback: Neoliberal New Zealand: no place for the poor – Benefit of the Doubt

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