Ignoring New Zealand’s rising tide of poverty

It took just 24 hours for last week’s most important story to disappear from radio news, the pages of our newspapers and our TV screens.

In my local paper it went from a feature spread on page three to a footnote story at the bottom of page 6 the following day.

This was the fate of the Ministry of Social Development report on the rising levels of poverty in New Zealand.

The story didn’t come as a surprise. It confirmed in dramatic fashion that poverty is on the increase under the Labour government with 8% of our population now in the “severe hardship” category – up from 5% in the previous survey in 2000.

In other words there has been a 60% increase in people in the “severe hardship” category of poverty since Labour came to power.

The increase has come about largely because of the plight of beneficiaries.

Two-thirds of beneficiary families with children are now suffering severe or significant hardship. This equates to 250,000 New Zealanders.

It says a lot about the New Zealand of today that the politician at the centre of attention, Social Development Minister David Benson-Pope, has not been under great political pressure over this scandalous situation despite the fact it is the “other half” of the Kahui twins tragedy.

Benson-Pope acknowledged the figures but neatly side-stepped saying the data was collected before the Working for Families package came into effect and that WFF will have made a real difference in the meantime. He also pointed to the drop in unemployment to indicate that recent improvements had taken place for low income families.

Neither of these arguments holds water. Beneficiaries specifically miss out on the “in-work” payment which is the key financial component of WFF. The package was specifically designed to “incentivise work”. This means it aims to keep beneficiaries in poverty to pressure them into jobs irrespective of their home or family circumstances.

At the same time a drop in unemployment will have no effect on the level of incomes of those on benefits and simply means that more people join the “working poor” on part-time, low paid jobs.

National’s Judith Collins made some predictable criticisms that the problem lay in Labour “fostering welfare dependency”. She is right in the sense that poverty is a direct result of government policies. In fact poverty is always a failure of policies, not a failure of people as Collins would have us believe. For example, from 1987 to 1993 the proportion of Maori households living in poverty doubled. It was government policies which drove them into poverty. Needless to say there was no evaluation of these policies. Instead we saw a round of beneficiary bashing and the “saving” of $1.3 billion by cutting benefits in Ruth Richardson’s 1991 budget.

We have seen it many times before. When a policy failure affects low-income families then get in quick to blame the people and put a “there is no alternative” smokescreen around the policy.

When benefits were cut in 1991, household disposable income for beneficiaries fell from 72% to 58% of the equivalent household income of the rest of the community and Benson-Pope agreed this week that benefit levels are still lower than they were before those infamous 1991 budget cuts.

So where did the money go? Between 1981 and 1995 the disposable income of the poorest 10% dropped by 19% while for the top 10% it rose by 18%. Government policies were to blame.

There will be no evaluation of policy failure this time through either. Instead the Minister baldly says the government is “pretty sure” it has the support levels for beneficiaries “about right” but it would look at the figures and decide what, if anything, would need to be done. In a less direct but just as deliberately punitive a manner as National, Benson-Pope is saying that beneficiaries are to blame for their situation and they can expect to continue to suffer “severe hardship” under Labour.

Labour and National are singing the same tune.

For all the community shock and outrage at the deaths of the Kahui twins, the issue of poverty rates only a sideways glance and yet this is the critical context in which those innocents lost their lives.

Despite this, within a few days of their deaths ACT and National successfully shifted the focus onto the alleged “welfare bludging” by the family and sidelined the policy failures.

We are locked into the familiar pattern we have seen so many times before. The policy failure drags on and yet we blame the victims instead.