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    And the Community Wage

    from The Jobs Letter No.101 / 27 April 2000

    The Maori Employment and Training Commission takes a critical look at the work-for-the-dole scheme.

    The Commission reviewed the Community Wage Scheme and its present structure and philosophy. It concluded that little significant employment impact would be made on Maori, and indeed non Maori, who participate in the scheme in its current form. It's recommendations: the scheme must be built upon, adequately funded, and have a positive impact on the employment opportunities of the participants.

    Here is an essential summary of the Commissions findings.

  • The questions that the Commission had to consider were:
    Does the Commission support the Community Wage Scheme?
    Is the Community Wage Scheme good for Maori?
    Is the Community Wage Scheme considered to be a success for Maori?
    What does the Commission consider to be the essential ingredients for the Community Wage Scheme to be successful?

    The Commission has supported the Community Wage Scheme on the basis:
    that people should not be paid for doing nothing.
    undertakings given to the Commission by the Minister of Employment, as to the devolution of authority to the Regional Commissioners to address regional problems.
    the understanding that in the areas of high Maori unemployment, Maori Regional Commissioners would be appointed.

    In respect of the first point above, this is the concept of "reciprocal obligation" which seems to be at the hub of the Community Wage Scheme argument. Unfortunately no help is given to participants beyond the concept of "reciprocal obligation" ie. what should they be paid to do? The debate as to whether or not people should be paid to do nothing, must be measured against the quality of the activity that the individual is required to undertake.

    From a purely mathematical point of view, the scheme would appear to have a limited life with the limiting factors being:
    unless successful programmes are put in place to increase the size of labour market (and GNP growth is only one of those factors in increasing the labour market) there will always be a pool of jobless (December 1998: 226,500 people).
    there is a limit as to the availability of "Community Work". It is stated that the Community Wage Scheme is "project based" and must not cause displacement. By definition, any project activity in a free enterprise system, will cause displacement, and even if the project is totally labour focused, there are costs of organisation, and if material/equipment is needed, the community is obliged to resource these projects. Ultimately, the community will be depleted of resources, if they in fact had them in the first case.

    "The response from the rural Maori sector was clear, they would not increase participation levels unless there was an attached economic driven infrastructure. There are no extra resources, human or financial, left in the community. Those that led many of the marae/provider initiatives were already over stretched. Further more, there was no goodwill left towards government initiatives that promoted innovative approaches. Innovation meant cuts in services and yet another burden for whanau to carry ..."

    report from The Maori Employment and Training Commission

    Currently the largest participant group in the programme are Maori, and therefore if the scheme is punitive and sanctioning, it is not good for Maori.

    However, if there was further debate and refocusing on what constitutes Community Work, and if resourcing was made available to undertake this community work, this scheme could be very good for Maori, on the basis however that it was run by Maori for Maori.

    A recent report conducted by Te Puni Kokiri clearly indicates that Maori are over represented in programmes that are not `linked' directly into the labour market, and under represented in those programmes with a greater probability of securing work following the programme. The Community Wage Scheme in its current form reinforces a continuation of this trend. Maori have said for some time that they are sick of going from one course (TOPS) to another. This will continue under the Community Wage Scheme, because it guarantees nothing.

    On 14 July 1998 the Minister of Employment advised that there were 8,169 on the Community Taskforce Projects in June 1998, and the Ministry of Employment stated "It is expected that next year between 25,000 - 28,000 unemployed people will participate".

    As of 3 March 1999, 7,210 were participating in the scheme, plus 1,369 were still on the Community Taskforce scheme: a total of 8,488. This is an increase of 319 in numbers since June 1998. In that time unemployment numbers have also increased.

    It should be noted that the Community Taskforce programme is being phased out and replaced by the Community Work Scheme.

    Papakura Marae, a Community Broker Organisation, found that the limitations that are placed on the type of work that participants are able to be involved in, meant that the Marae has not filled all of its placements.

    It would appear that the sustainability of the Community Wage Scheme ie. the ongoing ability of the community groups to continue to find "work" that falls within the guidelines of the scheme, is severely limited.

    "The application of new institutional economics presents unemployment as a simple malfunction in the market where there is a mismatch between the skills of the unemployed and the skills required by employers. The evidence is that this approach is simplistic, as unemployment is a complex issue imbedded in a range of personal, social, and cultural issues, and is the result of deficiencies in the labour market, not deficiencies of the individual ..."

    report from The Maori Employment and Training Commission

    In the opinion of the Commission, a successful scheme must have at it's core, the principle of participation with a purpose.

    The scheme should be a seamless process which picks a person up, places that person in real full time employment, or training for employment.

    In order to do this, the philosophy behind the Community Wage Scheme must change. The scheme at present has been constructed on the basis of international models, but has not included within it the fundamentals that has made international models moderately successful ie. the participation of the employer in the scheme, adequate state/federal funding, and case management.

    Research shows that the current scheme relies too heavily on the goodwill of communities, that are already under extreme stress and growing more susceptible by the day

    This Commission could find no evidence that the Community Wage Scheme would create long term sustainable employment for Maori. Conversely, the Community Wage continues to reinforce low skill labouring options, which will spell disaster for Maori as a population and New Zealand as a nation.

    Full copies of this report are available on the Maori Employment and Training Commission Website at

    That Government initiates an Employment Strategy to address the fact that the country is deficient of approximately 225,000 jobs. This Commission concludes that the Community Wage Scheme as it stands, without adequate funding and linking to the labour market, is bound to fail.

  • That Government must be more pro active in assisting job creation by business through economic policies. There must be a national commitment to regional and community economic potential audits, and targeted assistance to job growth sectors.

  • That Government must re-think the current Treasury policy of `fiscal neutrality'. The State must accept responsibility to manage risk, and that there is a case for positive discrimination to correct inherent social and economic problems, particularly as they relate to Maori disadvantages in the labour market.

  • That to succeed, the Community Wage Scheme requires Government resourcing to communities to enable them to resolve their own problems. Passing the responsibility to the community, without adequate resourcing, is a cop out.

  • That WINZ Regional Commissioners must be given flexibility to assist Maori enterprise development aimed at creating sustainable employment, and should be advised by a National Maori Commissioner on processes to co-ordinate this development. The 13 Regional Commissioners appointed by WINZ, mainly from the ranks of DSW staff, have little understanding of issues Maori.

  • That a Maori Commissioner similar to the position held by the former Acting Manager of the Community Employment Group, Parekura Horomia, should be appointed after consultation with National Maori organisations.
    Source - Interim report to the Minister of Maori Affairs (Volume 3) , 29 March 1999 by the Maori Employment and Training Commission, available on their website at

    "Labour has said all along that the scheme is nothing more than an expensive exercise undertaken by a tired government trying to distance itself from any responsibility for the unemployed. This report shows that the community wage is a complete flop and, in fact, is also very destructive for those people forced to participate. The Government, in the light of this research, must urgently reconsider the scheme. Labour will scrap the community wage, which concentrates on keeping beneficiaries busy, in favour of a genuine focus on increasing job opportunities for New Zealanders..."
    Steve Maharey, Labour employment spokesperson

    "What the Maori Employment and Training Commission have produced is very earthy response. I wouldn't have expected anything less they're there to reflect the concerns of Maori at the grassroots and I'm glad to see they're doing just that.

    "Having said that, the Government has also reacted positively to another of the initiatives the commission recommended which was the new Maori trade training scheme announced in this year's budget - it's bold, it's exciting and it's by Maori, for Maori. Along with that we've refined Te Ararau, another new trade training scheme introduced when I became Minister, targeting Maori employment training needs.

    "So I'm not deaf to the issues the commission has raised and they know this. The commissions were tasked right at the beginning with the job of gauging the feeling of people at the grassroots level and recommending strategies and policies in line with their findings for me to take directly to my government colleagues.

    "Some of those strategies and policies may develop into wins. Others might not. That's the political reality, but I'd suggest there's been more wins over the last electoral cycle for Maori than there have been for a while ..."
    Tau Henare, Minister of Maori Affairs, leader of Mauri Pacific

    "We are right on target. Labour's plan to scrap Community Work if it becomes the Government is foolish, and a backward step. It would leave the most needy out in limbo.

    "Since last year 25,000 people have so far taken part in Community Work projects for the long term unemployed, or those at risk of falling into that category. Those 25,000 people, many of them Maori, have gained a better chance of finding employment in future because of their participation in Community Work. Without it they would be slipping further and further away from the job market, sitting passively at home doing nothing.

    "Jobs are now being created by the economy, but we have stated clearly from the start that Community Work is not aimed at producing instant paid employment, any more than it will turn winter into summer. However it will produce people who are more work-ready.

    "Steve Maharey has consistently criticised Community Work without providing, or being challenged to provide, any well-thought plans for what Labour would do to deal with the long term unemployed, complete with costings. It is about time he did so ..."
    Peter McCardle, Associate Minister of Work and Income

    "The report into the community wage released by the Commission puts a very strong emphasis on welfare that has a reciprocal obligation. The Commission has supported the community wage scheme on the basis that people should not be paid to do nothing. That is a principle that ACT strongly supports.

    "While there are serious flaws in the Community Wage scheme, what it has done is finally start to make work the focus of welfare. New Zealanders need real jobs. For those in genuine need welfare must provide a practical hand up back into work.

    "The Commission has also recognised the importance of economic policies that stimulate growth and jobs. That is why we have to get Government off the backs of business, cut the red tape and remove the current barriers employers face in taking on new staff.

    "Labour's answer to the report is to say it will scrap the scheme. As usual Labour has offered no constructive alternative. Let's remember that Labour has only ever increased welfare dependency ..."
    Muriel Newman, ACT Social Welfare Spokesperson

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