This article will be focusing on cutbacks to Welfare and what they mean in the context of the social, political and economic environment of New Zelaand. Firstly I will talk briefly about recent benefit history. Then I will talk about what the current welfare reforms are and some of the ruling classes myths to justify them. Then I will discuss how and why we should stop them.
In 1959 the official unemployment number was 21. That’s 21 people. It was joked that the Prime Minister knew every unemployed person by name. A year later in 1960 that number had risen to 22. As the post war boom ended the natural course of capitalism began to take hold again, the rot of recession set in, and unemployment began to rise. Since the global recession in 2008 160,000 people are unemployed and this doesn’t take into account the 100,000 or more people who are underemployed – those who are employed but still lookng for more work. Now how is it that in the last 60 years, as the government would have us believe, hundreds of thousands of people have suddenly become lazy blugers? What is the difference between then and now? Well it definitely has nothing to do with “some mass laziness psychosis that made us all quit our jobs and go on the dole.” – Mike Treen, Exposing Right Wing Lies
In 1984 a new era of capitalist politics began. Neo-liberalism has since dominated the political landscape of New Zealand and the world for the past 30 years. In this time we have seen a massive attack on the working class and poor. Official unemployment rates went from less than 4% in 1987 to a peak of 11% in 1993. During this time 1 in 5 Maori lost their jobs, making the official unemployment rates for Maori and Pacific people hit 25-30 percent.
The benefit cuts in the 1990s were part of policies widely known as “Ruthanasia” after the Finance Minister Ruth Richardson, this conindcided with the smashing up of unions with the Employment Contracts Act. This is how Mike Treen, a leader of the Unite Union, outlines the welfare reform in his pamphlet ‘Exposing Right Wing Lies’
“The unemployment benefit was cut by 25% for young people, 20% for young sickness beneficiaries, and 17% for solo parents. They abolished the family benefit and made many workers ineligible for the unemployment benefit with a stand down period of up to a six months. The 1992 benefit cuts were worth approximately $1.3 billion – about the same size of each of the tax cuts handed out in 1996 and 1998. Unemployment benefits were stopped for 16 and 17 year olds and the youth rate for 18 & 19 year olds extended to the age of 25.”
Benefits as a percentage of the average wage fell significantly after 1985 and real wages have fallen by 25% since then – a double whammy really. These benefit cuts meant that they would not even provide enough money for a beneficary to be able to afford the reccomended amount of calories in a day.
It was said that “The 1991 cuts to benefits led to child poverty hitting 34 per cent in the mid 90s.” and still today we have some of the highest rates of child poverty in the OECD.
The victories won over the previous years through struggle, such as cheap education, health, high wages and safe work places, have slowly been rolled back. Now your twice as likely to die on a worksite in NZ compared with Australia and we have epidemic levels of 3rd world diseases such as rheumatic fever caused by overcrowding and poor housing. In the early 1990s, as unemployment rates were beginning to reach there peak, an idelogical attack began on beneficaries, as a way of justifying the cutbacks. These included dob in your neighbour adverts for beneficary fraud and this idea of intergenerational bludging. In 1992 Jenny Shipley wrote completey unjustified claims that: “the welfare state itself through its mechanisms, produces young illiterates, juvenile delinquents, alcoholics, substance abusers, drug addicts, and rejected people at an accelerating speed.” This is the same anti-working class rhetocric we hear today.
Over the past 30 years we have also seen certain sections of the working class working longer hours for lower wages, with some people working several jobs and over 60hours a week just to pay bills, while others have no work at all. This is the anarchy of capitalism. A simple solution to unemployment would be job share schemes with higher wages. A radical idea where we can work less for more money meaning there is work for greater numbers people.
So what are the benefit levels now? As stated earlier unemployment rates have more than doubled from 1987 to 1993. “The number of people forced onto benefits exploded in the early 1990s from around 140,000 on all forms of means tested benefits (unemployed, sole parent, Invalids & sickness) in 1985 to 340,000 by the mid 90s (about 13% of the working age population from 16-64).” – Mike Treen. The 00s saw small so called recovery with the number of people on benefiaires dropping to 8% of the working age population. In the past 4 years unemployment has steadly began to rise with now 12% of the working population on benefits, and a umeployment rate which has risen to 6.8%.
Now what that 6.8% represents is the people who in the past 4 weeks have been looking for work. There is nothing to say that the actual rate of unemloyment is not a lot higher than this due to the unemployed who are not counted as part of the statistic incluing those who have given up looking for work, those who are jobless but don’t collect the dole, further more you are only counted as unemployed if in the survey period you didn’t work at all – not even one hour, unpaid. You are not counted as unemployed if you are too ill or in training. Mike Treen says “There is a broader measure of unemployment called the “Jobless” that is a more accurate measure of actual unemployment in society. The Jobless number is usually nearly twice the official unemployment figure.”
So as “unofficial unemployment” steadily rises, the government is pushing people back out into the labour market for ghost jobs – the statistics show that there were actually 2000 less jobs from March to June this year and there are predictions that we could already be in another recession.
So what are the current reforms? The current reforms were concieved by the Welfare Working Group, headed by right-wing neo-liberal economist Paula Rebstock and whose membership consisted of two contrators of social welfare (whose business interests inherently lie in getting more people on wlefare and keeping them on it). There was no secret that those who came up with the reforms are business minded capitalists who are more interested in generating profit and lining their own pockets than the actual wellbeing of people. One of the advisors to the WWG was Peter Saunders who openly writes such bullshit as:
‘Britain looks surprisingly like a society divided into classes on the basis of talent. The pattern of social mobility is broadly consistent with what should happen in a perfectly open society with recruitment based solely on intelligence.”
Saunders hatred of the working class and poor is probably out done by his hatred of women, espicially sole mothers. He is quoted writing:
‘Today, single parenthood has become “normal”, and a key reason for this is that the welfare state supports, enables and endorses it. In this, as in other areas of welfare, when government pays money to people in need, it inevitably increases the number of needy people.’
Such justifcations can be seen running through all the reforms proposed by the WWG. There is no mention of valuable unpaid work such as raising a child or domestic labour nor any mention of job creation or startegies to decrease inequality, because these are not seen to be the problem for if they were it would contradict the very foundation of their capitalist neoliberal ideology.
The reforms are based on getting people off welfare into work. And straight away we have hit our first and most fundamental problem, as stated before there are less jobs out there and predictions of further recession. More often than not now we are seeing hundreds of applicants going for a single mimimum wage position. It is becoming common place to see thousands lining up for a few hundred jobs, such as the opening of Bunnings in South Dunedin. More job losses are occuring across the board, such as those skilled workers who lost their jobs at Hillside workshop, the miners who are going to loose their jobs on the west coast, countless manufacturing workers being made redundant across the Auckland region not to mention those laid off in ones and twos in nearly every section of the economy. Even so a very small proportion of people stay on any benefit for a long period of time, with a high turnover of people coming on and off.
So the reform is in 3 new benefit catgories as shown on the power point.
- Job Seeker Support (Unemployment and Sickness Benefits)
- Sole Parent Support (DPB, Widows, Women Alone)
- Supported Living Payment (Invalids)
The handout I have given you bullet points the changes. This quote from Mike Treen summarizes the reforms:
‘The intrusive and punitive work test regime will set up a costly new layer of bureaucracy to police those forced onto benefits by an economic system that has failed to create enough jobs. Solo mothers on the domestic purposes benefit will be expected to work a minimum 15 hours a week if their child is over the five. For some reason Widows are exempt from this requirement even if they have no dependent children – probably reflecting the governments elitist concept of deserving and undeserving poor. If you husband drops dead you are “deserving” and won‟t be work tested. If you are abandoned by a violent husband, or get pregnant outside of a good middle class family – you are “undeserving”. Sickness beneficiaries will also be assessed for part-time work and required to seek work if deemed able to work at least 15 hours a week. The package also offers case managers a new range of penalties, including cutting payments by 50 percent and suspension of payments in full. The requirement that sickness beneficiaries must present medical certificates at four, eight, thirteen and 52 weeks to verify their condition will impose considerable extra costs on everyone now on a sickness benefit, mindful that a full examination with blood tests can easily cost nearly $100 a time.’
And this is only the half of it. The War on the poor extends through changes made to housing NZ, family court, Ministry of Socail Development funding being restricted to social services in a counrty where hardship rates rose from 15% in 2007 to 21% in 2011 caused by loss of income tipping families into hardship even though their incomes are still above the poverty threshold.
Why is the Government doing this?
‘Big business wants to cut the costs of welfare for two reasons. Firstly, benefits above the barest minimum are seen as a barrier to lowering wages. The costs of welfare are also seen as a barrier to the government’s programme of cutting taxes on business and the rich. Cutting social welfare and cutting taxes for the rich usually go hand in hand.’
Funnily enough as predicted National cut taxes to the rich by 3%, as we saw GST rise to 15% which disporportionately effects the poor. By having low welfare benefits and punishments on you for not looking for work, in an environment of decreasing levels of jobs, big business can decrease the wage rate as people accept lower wages so not to starve. By keeping welfare high it keeps people spending and less desperate for work in times of recession.
So fighting for the wellbeing of those on welfare is fighting for the wellbeing of all workers. This is why these battles are so important. The capitalist rhetoric of workers paying for the lazy lifestyle of beneficiaries serves to divide employed and unemployed workers. As unemployment rises and more workers are laid off expect to see more persistent propoganda spreading these lies about beneficaries. Tomorrow’s protest is just the beginning, but to win this battle we must draw in workers and unions to support it, hitting the capitalists where it hurts the most; in their pockets.
The working class movement in NZ and much of the western world has been on the defensive for the past 30 years, suffering defeat after defeat. The leadership of the workers movement (ie the Labour party) is crippled and paralysed by their capitulation to the neo-liberal economic agenda. This is best summed up by them stating that they would rasie the supperannuation age to 67.
However there is hope, the resistancce around the world to austerity measures is growing. The Greek working class has reccently organsied a 48 hour general strike and has been struggling against austerity in the workplacce and on the streets for years. In the last week Spain has seen mass protests against fiscal cuts and the Egyption revolution and the Arab Spring give us hope that internationally the tide may be turning in our favour.
To win any justice for beneficaries we must build a fight back to the system which causes unemployment in the first place, capitalism. We need to look toward a militant movement of striking workers alongside oganised unemployed people as a force that could seriously challenge the governements agenda. This is fair way off and at the moment we need to build the small protest movments and support workers when they are on strike like we’ve seen at the Ports of Auckland, Oceania Rest Homes, and AFFCO Meatworks.