GUEST EDITORIAL - Wipe Out Poverty? How?

By Trevor Ammundsen

Several political parties’ state that they are committed to reducing poverty, some to eliminating it all together. Do not believe them as their only strategy is to chuck money about - rob the rich to pay the poor sort of thing. The political definition of poverty is a mathematical one, not a real one. For this article I will ignore that and consider poverty to be one of lifestyle, lack of food, lack of housing, basically lack of money and most importantly, lack of aspiration.

One of the major reasons why we have so many people lacking in aspiration is that we have made it easy for them to not bother; they will be looked after even if they do not care. Specifically, we have changed our welfare system from one that was a backstop to one that is a career option.

This really started with Norman Kirk’s Government in the early seventies. This Government recognised that married women were often trapped in marriages that were not good for them, that were often very violent. I understood this because that was the position my mother was in, in the late sixties, so I understood the pain she went through and the challenges she faced to move on. Norman Kirk’s Government wanted to make things a bit more human for wives/mothers in this situation; to give them options which I still feel was a very commendable motive. The tool he selected to do this was the Domestic Purposes Benefit which would give women who left a bad marriage an income to enable them to look after themselves and their children whilst building back their lives.

The problem happened with the execution of the policy. Times were changing I guess, so the policy was introduced to enable all women with children who were on their own to receive the DPB, not just married women. This was the singular worse decision made regarding our welfare system that I can recall. Let me explain by example.

I had friends at that time; she worked in an administration role, he was a shooter, shooting deer from helicopters in Fiordland. They were not married. She did not like his job as she worried about him crashing. There were a few such accidents at that time. We were having a beer in their kitchen one day when, having read the new policy, she announced with joy that he did not need to do that work anymore. He could go on the dole and when he got her pregnant, she would leave her job and they would be sweet with the DPB and the Dole. That is exactly what they did; their grandchildren are now third generation beneficiaries with the fourth generation not far away.

This policy, while well intentioned, started our nation on a path where welfare is a career option, not just a safeguard. Other policies have followed over the years; policies such as Family Care which was a move to turn parents into beneficiaries rather than reduce the tax that was taken off them. We now have a significant number of our population who feel their life purpose is to be supported by their community, and not contribute to that community.

Getting back to the topic; if we want to eliminate poverty, we need to raise the incomes of the population by having that population earn their income through productivity, not through rest and relaxation. We need to get our people out contributing to their communities and being well rewarded for their contribution. Glib words I know, but what about those that cannot contribute for various reasons?

The answer lies in a Universal Benefit whereby every citizen above a certain age receives a regular payment from the Government. This payment is your survival income, and everybody gets it. This is not an original idea, I heard it first from The Opportunities Party, but it is a sound idea. Be you the Prime Minister or some kid looking for your first job, you get the same Universal Benefit which hopefully tides you over until you get on your feet, probably quicker for the kid. If you are a student at university, it can help support you. If you are unemployed, it can sustain you.

The big question is how this would be paid. Significant savings in Government costs would help, no need for welfare, no chasing up student loans. The savings would be enormous. The tax system would need significant adjustment and I have written articles previously on how this could be done. It is achievable.

There come times when a significant reset is needed. We had one such reset, an economic one, with the 1984 to 1987 Labour Government which set this country up for the next thirty or forty years. It is long past time we had a productivity reset, a welfare reset if you prefer, to set us up for the next few generations. Unfortunately I do not see that coming out of this election.