NZ Defining Moments: #3

It’s appropriate as I start work at the Ministry of Social Development that I share with you New Zealand’s defining moment rated number three from their top 20 list.

NZ has an international reputation for progressive social policy – the Social Security Act of 1938 provided for a comprehensive, modern welfare state that provided social security and protection for generations of New Zealanders (NZs). It has provided the financial safety net for those people who have been unable to work because of illness, disability or circumstance.

In 1973, widows and sole mothers who worked were provided financial assistance by the Government to supplement their wages and support their families. The Domestic Purposes Benefit (as it was known) was sufficiently high that sole mothers were able to stay home to care for their children without paid employment.

But 1970’s NZ economy blew a whole through the Welfare State as its position of near full employment was unravelling and the costs of funding increased the economic difficulties NZ was facing in the global economy. In 1984, economic reforms saw a virtual transformation of its economy – it went from a protected, state-directed economy to a transparent, free-market approach with an extremely limited role for the Government. By 1998 welfare reforms required to counter slow economic and job growth and demographic changes, including a significant increase in sole parents and teenage parents.

The reforms required beneficiaries with children over age fourteen to look for full time work, those which children aged 7-14 to look for part-time work and those with under sevens to attend an annual planning meeting to discuss their future prospects for employment. The Government also required certain DPB beneficiaries to take part in the Community Wage, a workfare program that requires beneficiaries to engage in unpaid community activities in exchange for their income assistance check.

Since this time, the emphasis has been to move all beneficiaries to receive support from welfare to work. This continues today through the Ministry of Social Development’s Work and Income department which assesses people for benefit and helps them find jobs.

Currently NZ has one of the lowest unemployment rates in the OECD so it’s fair to say that they’ve been successful in this endeavour. The key challenge that now faces the Government is those growing numbers on DPB, disability or invalidity benefit.

For those reading this blog from the UK – sound familiar?