- The gulf between rich and poor cannot all be blamed on new right policies and certainly not on the institutional reforms alone, dramatic as these have been. Many goods and services now require only a fraction of the labour input than was the case ten years ago and the process is continuing relentlessly. Undeniably, like the Industrial Revolution, the technological revolution is profoundly painful for individuals caught in its vortex.
Technology is of course of itself, amoral and left to run its course could destroy us. In theory it should release resources to provide a better standard of living for everyone. To harness it to this end however requires new ways of thinking about work, about how individuals get access to the now, abundant goods, and about how redundant labour can be redirected to other worthwhile activity. It requires, for example, that we talk about a new ethic of distribution that moves beyond puritanism and private charity, and a new way of thinking about collective means of financing welfare enhancing non-market activity.
- Listen to the strategic statement in the Dept of Social Welfare's From Welfare to Wellbeing : "Positive income support enables people to transform dependency into contribution".
Positive income support translated means income support that is as miserable and as stigmatising as possible to provide the incentive (ie the stick) to leave the benefit system. Contribution means work at a job -- any job -- no matter how demoralising, or how much it contributes to growing waste and pollution, or whether it means that children must be neglected or brought up by others. The work ethic alone defines access to output. There is little recognition of the impact of technology. Those whose jobs are systematically destroyed are to be punished for their indolence... even to the point , as in the case of the Independent Family Tax Credit (IFTC), of cutting income specifically for their children!
- The fetish with targeting ensures that the poor can never escape. The scenario goes like this:
Cut the benefits to create a gap between beneficiaries and those in work.
This allows wages at the lower end to fall.
Create a situation where people cannot survive on a benefit, but if they earn extra income they are hit with high abatement rates.
React to the outrage from the charities who are swamped with requests for food by a vast expansion of add-on benefits such as the special benefit, special needs grants and the accommodation supplement.
Employ an army of administrators to make sure that no one gets any more than they deserve.
Now react to the work incentive issue by allowing beneficiaries to earn more money while on a benefit.
Count that extra income in the income test for the special benefit and for the accommodation supplement so that they are little or no better off.
Continue to deny them proper adjustment to Family Support for their children and then blame them for not taking the opportunities offered by the free market reforms.
Make it impossible for the poor to save, by reducing the accommodation and special benefits for assets as well as income. - Anne Else in her book False Economy tells us something so self evident it is embarrassing. We might insist that it is recited before every policy committee and meeting of Treasury : "Without families and communities, the economy means nothing. It has no life of its own. Its only purpose is to enable us to live, to care for one another and to raise our children to take our place. If we lose the power to do that, no matter how fast the GDP rises or how much the budget surplus grows, we will have no future worth working for."
- see the full paper in our article archive.
Source -- Susan St John "Winners and Losers: Gains and Losses" paper to the 1996 Foodbanks Conference August 1996
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ON POVERTY IN NZ
by Susan St John
Susan St John is a senior lecturer in economics at the University of Auckland.