Winz: "Changing employment trends requires that the traditional role of income support be revisited. This is highlighted in the widening gap between the HLFS survey figures of unemployment and those registered for the Community Wage. The `unemployed beneficiary' now includes many people who are working and participating in regular part-time jobs whilst still requiring some income support.

"Participation in work rather than full-time employment is the immediate goal and income support in many cases should be viewed as a `top-up' to earned income. We need to examine the kinds of assistance we are able to offer the part-time employed to help them more progressively into full-time work"

Winz: "These changes are having a particular effect on new job entrants and the post-45-year age group as they grapple to gain relevant work experience and meet the new labour market demands."

"Employer surveys and the department's own experience indicates that, when selecting staff, employers now place a greater emphasis on the interpersonal, attitudinal and teamwork skills of job seekers. The emphasis on flexible and adaptable personal attributes from employers is exposing a widening gap between the attitudes of many job seekers and attributes that are actually in demand..."

The department now holds the view that present administration rules requiring work testing only for people aged 55 and under is encouraging older people to retire early, leading to high benefit costs and "diminished human capital".

Winz suggests work testing should be extended to older groups: "The entitlement for national super has progressively moved from 60 to 65 years. The expectation is for individual's productive life to be extended to 65 years and beyond. Benefit administration rules of not work testing those over 55 years in effect supports early retirement at 55 years and is inconsistent with changing work expectations..."

"The loss of human capability and experience is a direct cost to the country in extended benefit payments and diminished human capital at a time when older workers will be in increasing demand to meet the needs of the labour market."

Winz: "These disparities have been well documented and in large measure have been resistant to current interventions. The disparities have been exacerbated by the significant restructuring that has occurred in industries where Maori were traditionally employed agriculture, food processing and manufacturing. As Maori are over represented in low skill occupations, they are more vulnerable during periods of economic recession. At the same time, Maori also make up a growing proportion of the population."

"From its field experience through daily contact with Maori beneficiaries, iwi and communities, the department is acutely aware that the issue is complex. Maori disparity requires a multi-faceted response by specific government and non-government agencies in partnership with iwi, which together are capable of addressing issues such as education, health and housing. The department has identified this issue as one of its key strategic goals."

The department says that more resources would be focussed on getting people back to work and lowering benefit costs if its services were opened up to competition and providers allowed to make profits. It concedes that using private providers would work against one of Winz's main aims of integrating services into "one-stop" shops.

Winz suggests that the pilot programmes be established to increase contestability, and should be based on models used in Britain or Australia. In Australia, private providers are paid to find work for the unemployed, with some money paid up front and the rest paid if the person finds work for a certain period. In some parts of Britain, public and private providers are given nine months worth of benefit and employment-assistance money for each unemployed person. If the person gets a stable job before the nine months are up, the provider can keep the money.

Reaction: Steve Maharey, Minister of Social Services and Employment, has told The Dominion that he rejected these privatisation proposals as they would only lead to a more fragmented service for beneficiaries. Maharey says that the government is interested in using private job-placement services for groups with particular needs, such as Maori and older people. But it does not want to contract out the general functions of Winz to private providers or use the profit motive to increase efficiency.

Maharey: "I don't see why the taxpayer wants to provide profit incentives to anybody. We should just be providing a good service. This whole fashion if slowly coming to an end around the world, where people believe the easy fix is to somehow offer a carrot to the private sector to do it. It doesn't create a better job service or a better beneficiary service that I've seen anywhere in the world..."

Sources Ministerial briefing papers from Department of Work and Income December 1999;
New Zealand Herald 27 December 1999 "Winz plans to focus on plight of Maori" by NZPA;
The Dominion 28 December 1999 "Winz to focus on Maori disparities" by NZPA;
New Zealand Herald 28 December 1999 "Winz wants profit lure to boost job hunting" by Andrew Laxon;
The Daily News 29 December 1999 "Winz may change rules for over-55s" by NZPA;
The Dominion 8 January 2000 "Jobless face higher hurdle" by Alan Samson;
The Daily News 8 January 2000 "Winz: Jobless cannot expect fulltime work" by NZPA.