Special Issue -- The Tax Cuts and Social Policy Bill -- Feedback on Social Policy Changes

Social Policy Changes

the feedback from unemployed and beneficiary groups.

from The Jobs Letter No.38 / 8 May 1996

These are the organisations who deal daily with low income people, and often act as advocates for those most effected by this legislation. These comments are drawn from their submissions to the Parliamentary Select Committee

ON THE INDEPENDENT FAMILY TAX CREDIT
Auckland Unemployed Workers Rights Centre: "Our concern is that it increases the gap between beneficiaries and non-beneficiaries. Such measures are increasingly turning beneficiaries into second-class citizens be restricting their ability to fully participate in society."
"We are concerned that some categories of people (eg invalids beneficiaries, NZ superannuitants, veterans pensioners and those receiving permanent weekly compensations) can not realistically be expected to ever become independent of their benefits or compensation, yet are penalised by comparison with someone in a similar income position who is working ..."
ON INTRODUCTION OF A DUAL ABATEMENT REGIME
Auckland Unemployed Workers Rights Centre: "We conditionally support the abatement levels which are proposed to be introduced for domestic purposes, widows and invalids benefits, and recommend that this regime be extended to all beneficiaries.
"We are concerned with the plight of other beneficiaries who continue to face effective marginal tax rates of 98.6% at the low weekly private income figure of $80 a week. For significant numbers of sickness, transitional retirement and 55+ unemployment beneficiaries, full-time employment is no more an option than it is for domestic purposes or invalids beneficiaries. These beneficiaries will continue to remain stuck in a poverty trap from which there is no escape..."
Combined Beneficiaries Union: "A change that should be made at this stage is the effect that extra income has on the accommodation supplement. In line with the thrust of the new government measures, it is unduly punitive to have the accommodation supplement abating from the first dollar earned, and it would be more consistent if the accommodation supplement was abated at the same rate and the same stages as the other benefits."
ON EXTENSION OF WORK TESTING TO NEW GROUPS
Auckland Unemployed Workers Rights Centre: "We question the full-time nature of the work-testing for spouses of unemployment beneficiaries, as opposed to part-time work-testing for single parents with children of a similar age. The rationale behind work-testing for single parents only part-time is, presumably, to give care-giving parents the opportunity to participate in and supervise their children's after-school activities. Parents who are partners of unemployment beneficiaries should also have this opportunity."
Combined Beneficiaries Union: "Traditionally the Widows Benefit has not been work-tested because it recognises that the woman concerned has been through the experience of bringing up her family without the support of a husband. As with the woman alone DPB it further recognises that many women had to forgo opportunities to pursue careers and employment because of their duties in respect of bringing up a family on their own, and that when these duties were finished these women are in their late forties and early fifties..."
"In our view, these provisions place a wedge into the family. While there may be occasions when part-time work can be done, it must be an assessment that the single parent makes and not one by the NZ Employment Service..."
ON INTRODUCTION OF ANNUAL MANDATORY INTERVIEWS
Auckland Unemployed Workers Rights Centre: "These are supported as we recognise the advantages of beneficiaries in these categories being given guidance about possible training, education and employment. However - the Bill does not appear to extend these interviews to the most disadvantaged group of all widows and domestic purposes beneficiaries without children. If this group is to be subjected to the work-test, they should also be given the same guidance about training, educational and employment opportunities as those who do have children..."
Combined Beneficiaries Union: "This purports to `signal' to beneficiaries that they have a `duty' to upskill themselves and improve their employment prospects in order to `increase their prospects of self-reliance'. Again, this is a slap in the face to these people who mistakenly thought that society considered bringing up a family as important. [...] If the government is serious in its attempt to encourage training and work opportunities it would raise the maximum rate of the Training Incentive allowance to a realistic level."
ON SANCTIONS FOR FAILURE TO COMPLY WITH THE WORK TEST OR MANDATORY INTERVIEWS
Downtown Community Ministry: "The combined effect of a graduated penalty system ranging from 20% benefit reductions to 13 week periods of non-entitlement based on only one `failure'; a clean slate provision that retains an imposition of a penalty despite an acceptance that the applicant has `made good'; and giving legislative power to a bureaucracy to make determinations as to what constitutes work which is `suitable' will necessarily preclude the government from achieving its objectives of easing those able to work into employment. The rigour of a proposal containing no safeguards, which is then locked into legislation, can only mean that it will be impossible to administer without catastrophic results."
ON CLEAN SLATE PROVISIONS
Downtown Community Ministry: "The clean-slate provisions contained in the Bill are not clean-slate provisions at all. They demand that punishment continues even after a beneficiary has complied with the mandatory interview or work-test requirements. It is a gross misuse of power to penalise a person to endure further periods of reduced benefit or non-entitlement despite that person meeting the relevant test..."
ON REQUIRING PEOPLE TO PARTICIPATE ON A COMMUNITY TASK-FORCE SCHEME
Combined Beneficiaries Union: "Community Taskforce schemes cannot work effectively with referrals who clearly do not want to be there or cannot manage the duties. Groups such as ours do not want to be seen as de facto departmental police having to rate attendance records, and gauge participation effectiveness. At present these schemes are low key in that people come to us because they want to be there and they work well. However, there could be significant problems when the respective departments step up the big stick approach ... in obliging beneficiaries to participate in a scheme to test their `work commitment'."
next : DO WORK INCENTIVES WORK?

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