Escaping the Welfare Trap

Bernie Madoff Should Have Been a Politician

The left wing Labour party has a scurrilous record on beneficiary dependence.  The bottom line for the Labour party when it comes to welfare dependants is, "more".  Not necessarily more financial support--although that cannot be ruled out necessarily--but more people receiving welfare payments.  That is partially why the previous Labour regime introduced Working for Families in 2004 in New Zealand, a welfare scheme targeted at the middle class.  The electoral impact is straightforward: when voters become reliant upon government largesse they will vote for the party which introduced it or continues to support it.  More beneficiaries, more votes.

The current government has made reducing long term beneficiary dependence a high priority.  It has introduced a comprehensive, integrated programme to get people back to work.  A core part of that programme is to expect solo mothers on the Domestic Purposes Benefit and others on the unemployment benefit to get a job.  If reasonable steps are not taken, benefits are reduced.  The early results are encouraging:

Latest benefit numbers reveal thousands of New Zealanders have gained financial independence by coming off welfare in the past 12 months, Social Development Minister Paula Bennett says.   Figures for the December 2013 quarter released today show over 17,000 fewer people are on benefit compared to December 2012.  “This is a significant decrease and proof that the welfare reforms implemented by this Government are making a huge difference for New Zealanders,” Mrs Bennett said. . . .

Welfare reforms included new obligations for sole parents to be ready and available for part-time work when their youngest child is school-age and full-time work when their youngest turns 14.  “This impressive drop is down to thousands of sole parents seeking a better future for them and their families through work, and also thanks to Work and Income case managers, who are doing a fantastic job offering better, more targeted support than ever before.”  Over 19,800 people cancelled their benefit to go into work in the last quarter.

The left roundly pilloried the reforms by claiming that the were a cruel joke: there were no jobs to go to.  Labour proposed instead vast increases in public spending, creating jobs, so that welfare beneficiaries could have jobs to do.  All this would mean is a transfer from direct welfare to corporate welfare.  But the Left is either too clever or too ignorant to concede the point. 

So the issue comes down to a few fundamental ideological questions: for example, does the Left agree that nearly 20,000 people off the welfare benefit roles is a good thing?  To this question the Left will never give a straight answer.  But they really believe it is a bad thing to see welfare rolls shrinking.  In the  end, it reduces its electoral traction.  The brute fact is that pretty much everyone who gets a job and comes off welfare--going through the pain of transition and adjustment--becomes an advocate for working rather than staying on welfare rolls.  Their attitudes and expectations change.  They expect their peers to make the same effort they have made. 

The brute reality is that welfarism is the biggest Ponzi scheme of all.  In order to perpetuate itself, the system relies on ever greater numbers of working people and companies earning taxable income.  Ponzi schemes collapse when the numbers entering the scam become less than the numbers already in the system.  Then the money dries up.  All Ponzi schemes collapse when they run out of sufficient new money entering the system to pay out those already in the system.  Welfarism is nothing more than a grand Ponzi scheme.  If it were an investment scheme, its promoters would be jailed for longer than Bernie Madoff.  But since the promoters are politicians and political parties that will never come to pass. But the unethical reality of the rort is undeniable.    

Politically, the only way out of the vice and the inevitable collapse, with all its suffering and attendant turmoil, is to get people out of the dependency trap and into work (genuine work, not corporate welfare positions).  Thus, the present government's progress is laudable.  We unequivocally affirm that it is a good thing.  It is a great benefit to the body politic.  Long may it continue and increase.