3 March 2003


" It is clear that our potentials can never be realised or released by an all knowing, all caring centralised bureaucracy called the Ministry of Social Development. The Ministry must be decentralised, funding and all. We must be allowed to take responsibility for ourselves. Welfare as presently practiced in this country literally kills us with kindness ... "
John Tamihere

" Failure by state agencies to solve the problems of poverty and welfare dependency actually results in the allocation of greater resources to those agencies when they have already proven themselves poorly adapted to solving the problems."
John Tamihere

" Decentralisation and devolution into a community based accountable, transparent and open non-government organisation will make welfare work. It will work in a fiscally prudent way and a number of families will be able to trade upward and onward..."
John Tamihere

Tamihere on Welfare

"The Reform of Welfare and the Rebuilding of Community" by Hon. John Tamihere, speech prepared for the Knowledge Wave forum, Auckland 21 February 2003

  • IT IS NO GOOD having a growth and innovation strategy, and it is no good looking for success and innovation, if large numbers of our community cannot participate.

    Now is the time for welfare reform and the rebuilding of our communities. If we want to strive for better living conditions and higher economic performance we must allow communities to take back their ability to be responsible for themselves, to manage themselves, and to grow a work ethic, commitment, and responsibility, themselves.

    Too often we only consider welfare reform when the fiscal and economic conditions dictate reductions in government spending. This inevitably coincides with times when the need for welfare is at its highest.

    The main thesis of my discussion is that welfare delivered by Government monopoly must be challenged at the very best of times. Currently unemployment is at 4.9% - the lowest rate since March 1988. The economy is growing strongly and government revenues are strong. Now is the best time to have a serious look at welfare.

    In this speech I outline an approach to such reform, based on challenging the monopoly of the state in providing welfare. There is clear and unchallenged evidence that decentralised delivery of government programmes works effectively. We talk of public/private sector joint ventures and relationships in commercial fields but we refuse to acknowledge their potential in social policy areas. This has to change.

  • It is widely accepted that our society will always demand some form of welfare support. Welfare is as much a part of our heritage as the arrival of the Maori by way of canoe and the European by way of the Endeavour. It is acknowledged that many people suffer from a range of deprivations. For these people we can have nothing but compassion and we should extend a helping hand.

    Too often discussions about welfare get caught up in tired debates about Left and Right wing approaches. There are three problems with this.

    First, it simply doesn't get us very far and distracts us from the real debate on the practical solutions that we so clearly need.

    The Right has grown comfortable with its welfare bashing politics, knowing that it plays well in parts of the electorate. The Left has grown comfortable with its traditional approach, knowing that it can clear its conscience by further increasing the material gifts of government. The electorate has grown comfortable with the geographic concentration of welfare dependency, knowing that this separates well-to-do suburbs from the poor. The corporate sector and other charitable sources have grown comfortable with the problem, knowing that they can write their welfare cheques and then wipe their hands. The media has grown comfortable with welfare dependency, knowing that it helps to generate sensational news. Welfare bureaucracies know that the easiest clients to serve are those whose circumstances and prospects never change.

    About the only people who are not comfortable with this well-worn debate are the welfare dependent. They need us to move beyond our comfort zone and look for positive solutions.

  • The second problem with getting caught up in a Left versus Right debate is that both approaches have failed.

    The big mistake the Right makes with welfare dependency is that it simply sees it as a matter of rational choices. If we remove the ability to `choose' to receive benefits, the problem of welfare is also removed. The Left sees welfare dependency as a matter of financial position. If the material conditions of those on welfare are improved, the problem is also rectified. This approach is just as misguided. Even though the Left has always expressed its concern for disadvantaged people, it has neglected the importance of social relationships. It has positioned welfare policy solely as a relationship between the state and its citizens. Welfare dependency is a problem in the relationship between people. Dependency drains away the social benefits of self-esteem and mutual recognition. Until this problem is addressed, it is not possible to sustain rational judgements or improved material conditions within welfare communities.

  • Thirdly, the welfare dependent are left right out of the debate.

    The lazy and easy style of labelling everybody, left or right, must surely be challenged, as we focus on achieving sustainable and enduring outcomes in terms of social policy.

  • I have been born and bred out of communities that are now under their third and fourth generation beneficiary state dependent individuals, families and communities.

    The solutions to state dependency are caught within a rich matrix of our very recent history and the significant impact that technology change and massive trade liberalisation have had on the economy.

    In 1972 unemployment peaked at 350 persons. The Labour party was able to turn this into an election issue. At the same time New Zealand was starting its nationhood journey. Our hand was forced by the decision of the United Kingdom to join the European Economic Community in 1973. We were further jolted by the oil shocks of 1973 and had to start a new destiny in the South Pacific. In 1975 we commenced an exciting process of reconciliation with the enactment of the Treaty of Waitangi Act.

    The 1980s continued the turbulence of the 1970s with major economic upheaval and a redefinition of the role of the state in the economy. Not the least of these was the restructuring of huge government employment machines such as the railways, the Post Office and the Department of Works.

    New Zealand's society was turned on its head. We saw the demise of huge systems and structures that used to provide security, solace and direction. In addition to the governmental and economic changes, we have seen the "baby boomers" fleeing from mainstream churches. We have also experienced a significant decline in participation in our sports clubs.

    These changes have fundamentally undermined the core assumptions of the welfare state. We need to make sure our welfare system is well adapted to meeting these massive societal changes.

  • I am not proud of my people's negative indices. Notwithstanding these difficulties I do not accept that their failures and deprivations are caused by genetic malfunction.

    While I might not be proud of these negative indices, I am unshakable in my experience and belief that the latent, dynamic, innate potential of our people is being suppressed. A culture that, 30 years ago, was proud of the fact that we, the indigenous folk, had the highest rates of employment, now walk around as a subculture of ethnically identifiable failures.

    It is clear that our potentials can never be realised or released by an all knowing, all caring centralised bureaucracy called the Ministry of Social Development.

    The Ministry of Social Development must be decentralised, funding and all. We must be allowed to take responsibility for ourselves. Welfare as presently practiced in this country literally kills us with kindness.

    To accelerate Maori access and participation to opportunities to the extent that they can surf the knowledge wave rather than being hammered into the rocks will require a number of policy shifts based on decentralisation of authority and funding into the local communities.

  • The importance of Maori culture and ethnicity lies not in loyalty to the past. Rather it relies on what it can contribute to the future.

    Unleashing Maori communities from state dependency will mean ensuring that they take responsibility for breaking that dependency. The amount of lost opportunity as Maori work through their grievance resolutions with the Crown has been incalculable. The Treaty is not a panacea for Mäori success, or participation in any new economy. We must throw off victim hood and become beacons for nationhood.

  • Contrary to popular belief on a dollar per unit social worker pricing model it is actually fiscally prudent and responsible to decentralise. As devolution and decentralisation occur however, what has happened in our experience is that discounting occurs. For example the Child, Youth and Family Service will pay on average $90,000 per unit per full-time employee of the total agency on a mean average. To a provider agency in a Maori community you will be lucky to get $32,000 per unit full-time employee average. The Child Youth & Family Service will pay itself $110,000 per annum per bed night at its residential facilities. It will pay a community organisation from $15,000 _ $20,000 per bed night per annum. Furthermore the model is flawed in so far as the funder of the service to the community is also in competition as a provider. The funder sets the budgets; the funder sets the standards and policies.

  • The current system draws on a wide range of budgets. In addition to the cost of benefits themselves resources are poured into areas such as housing, health, education, justice and corrections all aimed at addressing different aspects of the same problems.

    For example, there are 60,000 state house rentals. If you are lucky enough to be a resident in this rental regime you pay 25% of your gross income into Housing New Zealand. 76% of all state house tenants are beneficiaries' dependent on the state for their total income. A further 11% of state house tenants receive some form of income supplement acknowledging that their employment income requires some form of top up.

    Despite significant funding being available 44% of Maori children under the age of five do not attend pre-school situations. As a result they start primary school behind and catching up is very difficult, particularly if they come from poor communities, poorer families and poorer parenting.

    At the other end of process, data from the 1999 Census of Prison Inmates tell us that 50% of inmates were dependent on benefits prior to entering prison. On this basis we can see much of the Corrections budget as part of the `cost of the system.' Surely we need to find better ways of spending this money so that people are contributing in their communities rather that drawing their benefit via corrections.

  • We should be focused on what social policy outcomes we desire from the expenditure we are putting into our social policy areas. Obviously instead of continuing to pay for families as they spiral downward or are held by way of some management philosophy at their present point of deprivation does not necessarily mean that we are being successful. Well paid bureaucratic providers of service with no accountability, no transparency and no responsibility for the end result continue to be the provider of welfare assistance they will not accept any obligation or responsibility for the outcomes that they are handsomely paid to achieve.

    Failure by state agencies to solve the problems of poverty and welfare dependency actually results in the allocation of greater resources to those agencies when they have already proven themselves poorly adapted to solving the problems.

  • Welfare in New Zealand is delivered now by way of charity. That is ironic given the welfare state was first established to overcome the shortcomings of charity. The Ministry of Social Development rates your requirements and provides you with a levy against the criteria. The problem with charity _ whether from Government, churches or the private sector _ is that it only addresses the symptoms of poverty. It hands out enough to get you through until your next hand out. There are no mutual responsibilities. Recipients are denied a sense of worth and equality. The inevitable result is dependency.

    Despite all the spending and `management' of beneficiaries occurring under these programmes, it is clear that the problems facing our communities are not being alleviated.

  • People will only use the material gifts of government productively if they have the self-esteem and confidence to build positive social relationships. Giving people public housing does not change their relationship with other people. Giving people a bigger welfare cheque does not change their place in the community. Giving people easier access to public services does not change the way in which they are perceived by the rest of society.

    As a Cabinet Minister and MP for the Mäori populations in the Auckland region, I believe there are solutions to these problems.

    The starting point must be to ensure that for each beneficiary household there is one non-Government dominant caseload manager ensuring that the benefit is paid specifically to achieve shelter, food and electricity and warmth into each one of these beneficiary households. This can be accommodated by way of a budget plan formed and consented to by the beneficiary family and the dominant caregiver.

    Once the beneficiaries' entitlements have been assessed and secured from MSD they would be paid into a budget holding trust account administered by the dominant caseload manager. Payments that had been consented to would be automatically paid to the mortgage or the landlord whoever that might be. Payments would be made on behalf of the beneficiaries for electricity and an agreed food supply of agreed items. Any residual money left over from the benefit would then be transferred into the beneficiaries' private bank account to be used for discretionary spending.

  • The attractiveness of such a scheme for beneficiaries is apparent straight away. By combining their purchasing power, discounts on a range of goods and services could be achieved. For example, one medical clinic run by the Waipareira Trust achieved an immediate $3 per prescription discount by agreeing to put all our business through a particular pharmacy.

    Waking up beneficiaries to the power of budgeting, to the strength of cooperating and to thinking medium to long term is a huge leap for them. It is also essential to setting both individual beneficiaries and their communities on the road to recovery.

  • The key to the above is that no government agency can provide the dominant caseload management required. In one case up to 15 different crown or government agencies can be involved and this is the delivery of social policy in a most dysfunctional way. It is also outrageously expensive. It also externalises duty obligation and responsibility onto the well-intended `do gooder' agencies.

    Decentralisation and devolution into a community based accountable, transparent and open non-government organisation will make welfare work. It will work in a fiscally prudent way and a number of families will be able to trade upward and onward.

  • Decentralisation is often rejected because there is no integrity or credibility in the infrastructures in these communities that need to be engaged with, as they move to become service providers.

    We know that this allegation does not hold water and is now no longer credible. We know this because bit by bit we can build up systems and infrastructures in poor communities, or for that matter any community, as they move to provide a range of services that are unbundled from mainstream bureaucracies. Under no circumstances do we need to practice devolution and decentralisation by the `big bang theory' and in fact our communities do not desire that.

  • This government is currently developing programmes, which fit well with this model. We have the primary health organisation model rolling out over the country over the next 5 years, moving us to a capitation formula for funding primary healthcare. There are loadings in the payments that take into account a range of equities to ensure the service in poorer communities is upgraded. Currently people from the communities I represent receive medical attention through accident and emergency facilities. This means there is follow-up on their treatment. The primary healthcare strategy will turn this process on its head. Through a roll out of screening programmes healthcare problems will be identified before they become emergencies. Families will have access to a range of medical and health care responsive to their needs. This approach has the potential to dramatically improve health care outcomes without a proportional increase in costs. One simply has to consider the price differential between a preventative visit to the community nurse and an emergency admission to see how this is the case.

  • Decentralisation of welfare to communities will allow us to return the concept of mutual responsibility to the forefront of the welfare system. By mutual responsibility I am not talking here of some sort of punitive work-for-the-dole system as some in the opposition would advocate.

    The mutual obligations I am talking about are those that flow from the benefits being received. For example, at this stage we have not made it clear that this housing entitlement is not a lifetime entitlement with rights of succession to your family, but is rather a respite facility. We need to ensure that those who are afforded a state house acknowledge the need to work towards moving into another form of housing. Preferably a house they own. In early childhood education, one cannot jump to a conclusion that a parent will take their child to an early childhood education centre; they must be mentored even in this relatively simple task.

    Currently funds exist for a range of alcohol, drug and gambling addiction programmes as well as for second chance training and education. As a consequence, the adult or adults in this housing situation can also be provided with a pathway out of their difficulties. With stable housing and other basics such as electricity and basic food provided, the chance of success in such programmes is much higher. However, we must move beyond seeing these programmes as optional extras. If we are to provide a range of benefits, we should expect participation in these kind of programmes.

  • We are currently at a turning point in New Zealand history. With a strong economy and a highly effective government, most New Zealanders are enjoying the dividends of greater growth and a stronger commitment to social services. However, we cannot ignore those in danger of being left behind. Those who are dependent on welfare currently are those who need the most help. We owe it to them to consider the changes I've outlined above. We have a wonderful opportunity to move people out of dependency and into a position of contributing positively to the community. We need to grab the opportunity while it exists.
    Source — "The Reform Of Welfare And The Rebuilding Of Community" by Hon. John Tamihere, speech prepared for the Knowledge Wave forum, Auckland 21 February 2003


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