An Audience With ACT's Muriel Newman (Part 2)

Friday, 13 August 2004, 12:17 am
Article: Kevin List

ACT New Zealand Deputy Leader and Social Welfare Spokesman Dr Muriel Newman is this weekend (August 14) hosting a symposium on welfare reform. As well as a number of former Cabinet Ministers from the fourth Labour Government (Roger Douglas, Michael Bassett) there will also be speeches from a former British Minister in the Blair Government, Frank Field MP as well as hard hitting Author Alan Duff.

Scoop dropped by the ACT offices in the hope of a free cup of coffee and a chance to get the inside running on ACT's welfare policies, by way of a chat with Dr Muriel Newman

MURIEL NEWMAN AND WELFARE REFORM IN NZ

Dr Newman outlined her plan assist beneficiaries into work which includes every beneficiary in New Zealand re-applying for their benefit and 40 hours of training, education or subsidised work experience for those unable to find gainful employment after six months in receipt of a benefit.

Scoop: How does the reapplication to the dole work?

Muriel Newman: What we would ask for everybody to do is reapply for their benefit and then it’s an opportunity to reassess their needs, so in some cases it may be that someone is on an invalid’s benefit but they actually need mental health services that they’re not getting, somebody could be on a sickness benefit because they’ve got a hernia for example, and they can’t work and they’re stuck on a waiting list, so they can be prioritised so they can get fixed, get well and get back to work.

Scoop: Would it be expensive?

Muriel Newman: No, you get a letter, you turn up, you reapply. Your case manager reassesses whether you’re on the right benefit – they’ll be people right now on an unemployment benefit, long-term unemployed, who have actually got some addiction issues or mental health issues where they shouldn’t actually be on that benefit at all, they might be better on an invalid’s benefit with better support so that’s the first thing. But the second thing is we would actually find a whole bunch of people who never turn up for those interviews because they actually don’t exist or there are people who actually shouldn’t be on a benefit who won’t bother to reapply – evidence from other countries that could be as high as a quarter of people.

Scoop: So you think that would save money?

Muriel Newman: It would save money. But the most important thing is that it would make sure that the people with needs are getting the proper support. To be honest, if you can’t get off the benefit on your own, in this day and age when you’ve got jobs for Africa – we’ve got this huge shortage of skilled and unskilled labour – then you need professional support. If you’re able to do it on your own, then you’ll probably do it on your own and that’s where if they’re not getting that proper support then we need to give it to them.

Scoop: Has there been any New Zealand studies done on that? Any policy documents?

Muriel Newman: I don’t think anyone’s done it – no one has made everyone reapply for their benefit.

Scoop: Not National, not Labour, no one?

Muriel Newman: No, that’s why it’s an ACT policy.

Scoop: What happens after that?

Muriel Newman: Once you've reapplied or come on to a benefit because you have just lost your job and we are now talking about able bodied people, because you must shift to one side people who aren't able to work…Then you go onto a programme of 40 hours of education or training where you are helped into the disciplines and habits of the workforce. You must turn up on time, leave at the end of the day…

Scoop: What do you do during this 40 hours and how is it run – surely it is going to be expensive to run?

Muriel Newman: Well it doesn't matter though, because you are investing in people. What I haven't touched on is to get someone to turn up to the 40 hours a week you have to have helped them overcome any barriers they've got, whether it is transport problems, getting there, childcare, after school care or whatever it happens to be. You've got a worry – we help you. For financial problems, we'll give you the support of a financial planner, for goodness sake, to help you overcome the turmoil you've personally got, which prevents you going out there and winning a job and doing the job. So we help you overcome those barriers and invest in you. Yes, it is expensive, but that doesn't matter because you're actually investing in helping somebody to be independent of the state.

Scoop: But the state will surely be paying for this programme?

Muriel Newman: That doesn't matter because eventually what is going to happen is that they are going to leave welfare. They are going to go out there and be earning, contributing taxpayers and so if you've had to give them a bigger investment upfront so that they can be self sufficient further down the track, that is better than them being on a benefit for twenty years.

Scoop: Still, what sort of programs would they be doing?

Muriel Newman: Okay, so someone turns up and they've left school at 14 then you put them on to adult literacy and numerical skills. Someone else turns up and they are pretty well educated but they just lack the ability to get a job, so CV writing and job interview skills. Someone else turns up and they go and do community work for the local school because they'd like a job in education. Someone else goes into a subsidised job programme with Carter Holt Harvey or whatever that happens to be.

Scoop: Is there a problem with displacing people from the workforce? Didn't the last 'work for the dole' scheme (National-NZ First Government) run into problems? How do you avoid the problem of displacing people in the actual workforce?

Muriel Newman: Well I read all the complaints about that but I never actually heard of many real live examples.

Scoop: But they never really did much with that scheme – it wasn't a very big success?

Muriel Newman: They had about 25,000 people on it, 6000 organisations up and down the country. I was talking to a bunch of them last night they reckon it was an outstanding success. They were very sad that this government scrapped it. I think you'll find a lot of those barriers that people raise, they are not as big in practice as they are in people's minds.

Scoop: But what about the policy documents, surely there have been some studies done?

Muriel Newman: There was a study done by the government, in which, they claimed that 'work for the dole' didn't work. The study wasn't based on 'work for the dole' though. It was based on a predecessor. So they fudged it. So that as far as we were aware was the only study ever done and it was a fudged study so it didn't really have much credibility. In other places where they have got this working they are an outstanding success. Once someone gets into a 40 hour a week regime and you've helped them overcome the barriers they face, when a real job comes up that they figure they can do with support of professionals to help them into it, they take it.

Scoop: So that is phase two. What is the third phase of the policy?

Muriel Newman: No phase two is giving them a six month time limit and then at the end of the six months then you go onto a full time programme [the 40 hours a week of education or training].

Scoop: And then what?

Muriel Newman: And then, well, you stay there. If you really can't find a job then you will probably be…you will find councils, other organisations, government departments will be able to provide because you really are talking about a very small number of people now. In general these will be the people who have got other issues, substance abuse issues, mental health issues. The question is whether they should be on the unemployment benefit or whether they should be on an invalids benefit.

WELFARE REFORM IN WISCONSIN - USA

U.S. Secretary of Health and Human Services Tommy G. Thompson

Muriel Newman: I spent Saturday morning talking to the chap who pioneered welfare reform in the United States [Tommy Thompson]. He is now the secretary for social welfare for President Bush in his Cabinet and I interviewed him on the video link. Secretary Tommy Thompson was telling me that in Wisconsin now, there are counties with nobody on welfare. They have helped thousands of families become independent and self sufficient. Child poverty is down, child abuse is down all the negatives are down. The state is doing really well it's got one of the lowest tax rates now in the United States because they have made the savings on welfare. They’ve given the money back in tax cuts, more jobs available than unemployed people. It [Wisconsin] has got a very high standard of living and he said it's an outstanding success story

Scoop: You don't think that could be because all the unemployed people moved to a different state?

Muriel Newman: No because they brought welfare reform in right throughout the country As a result of Wisconsin's lead president Clinton signed into law the same program that Wisconsin ran. It is just because they were really onto it first their success rate is totally outstanding. And I said to him, you realise that critics say that it is not working and he just laughed and said:

"I wish that you guys could do what we've done because you would find that nobody at either state level, senate level county level wants to go back to the old way of dependency because it harmed children."

And then he said:

"What we've done now is liberated families from that welfare trap, (that I saw myself)".

And he said

"We're giving kids throughout America a far better opportunity."

Scoop: Just on the subject of Wisconsin, did they have time limits on welfare there?

Muriel Newman: They [Wisconsin] brought in time limits but for many states they haven't got to that yet.

Scoop: Perhaps if you were in Wisconsin, you (being unemployed) might move to another state because the other state didn't have time limits?

Muriel Newman: No, no, no they've got it [the welfare reform programme pioneered by the state of Wisconsin] throughout everywhere [In the United States].

Scoop: But you just said other states didn't have time limits?

Muriel Newman: No, sorry, the time limits were five years and so for some states – I suppose it is true – for some states who got started early because it was a roll out across the whole of America - Wisconsin would have been a leader…

Scoop: But how did the time limits work?

Muriel Newman: Their ones [Wisconsin's time limits] were two years continuously and five years in total.

Scoop: Could you see that working in New Zealand?

Muriel Newman: No that is why we've gone to – well yes you could - but that's why I like what we've done better. Where you say right you're free for six months and then after that…because the big thing that makes the difference is getting people into the habit of the workforce.

Scoop: Right so that is the incentive but what is the stick?

Muriel Newman: No, that is a requirement. You don't turn up – you don’t get paid! It is like a job.

Scoop: What happens if you don't get paid?

Muriel Newman: Well it is up to you – turn up! If you don't turn up in your job you would probably end up losing your job.

Scoop: I'd imagine so.

Muriel Newman: And then you go and find another one. So people that don't want to turn up are voluntarily unemployed and that is their choice. The system is there to support them but if they decide no bugger it, I'll go fishing or surfing or whatever…

Scoop: What happens to their children though – if they've got children?

Muriel Newman: Well that is their responsibility isn't it. You would find that their children would be taken off them. If they were so irresponsible that they did not accept government assistance and did not provide for their children, then they are not damn well fit to be a parent.

Scoop: In Wisconsin were there any studies done on homelessness afterwards? (Reference link: http://www.workers.org/ww/1999/workfare0304.html)

Muriel Newman: All the studies show a huge improvement in all of the social indicators, so families were stronger.

Scoop: But there were no studies done on homelessness ?

Muriel Newman: Yeah, there were studies done on homelessness but that would have shown an improvement as well. As people got jobs.

Scoop: But I'd read somewhere that there were studies done that showed homelessness had gone up in Wisconsin?

Muriel Newman: Nope.

Scoop: I've read the wrong article then?

Muriel Newman: I don't know, but he [Tommy Thompson] said - I said what are all the social indicators then?

Scoop: But he put the program in place?

Muriel Newman: Yeah, but he's now like a Minister in the Federal cabinet. He has stepped up from Wisconsin, but they have now got studies that essentially show an improvement. Sure, you are going to find homelessness. I don't know whether you watched Documentary New Zealand last week on those street kids. Did you see that?

Scoop: I try not to watch too much TV.

Muriel Newman: They were homeless kids right and they wanted to be homeless. You get that. It is like the [homeless] people in Wellington. I said to the Minister [Steve Maharey] 'Why don't you provide a state house?' and he said to me, 'because they won't want to live there.'

THE RELEVANCE OF NZ'S HIGHEST PAID BENEFICIARY

Scoop: Why is it important that you find out who the highest paid beneficiary is and what is the idea behind that? (Reference Link: http://www.nzherald.co.nz/storydisplay.cfm?thesection=news&thesubsection=&storyID=5323)

Muriel Newman: Well essentially there is this real concern that if the incentives aren't right in public policy then you don't get the right outcomes. If people can gain far more money on a benefit than you can in the workforce then you've quite a disparity and you've got a problem. You've got the wrong incentives. When you ask, "How much does someone get on the benefit?" You get told "$163 dollars a week". But when you talk to people it is not $163 dollars a week.

Scoop: No, because you have got cost of living allowances on top.

Muriel Newman: And you've got family support and accommodation supplement and disability allowances and so it goes on. So then you realise that this was far more complicated than I knew about, so lets find out how much the top one is. So that lets us find out so that we have a better understanding of whether or not there is a problem. Take a silly example - say there were 10,000 people on a benefit – the base benefit is $200 bucks a week and 80% of them get $800 dollars a week. You've got a big problem right?

Scoop: Well do 80% get $800 dollars a week?

Muriel Newman: Well no, I said use a silly example but one that we can see. If you found out that 80% get $800 dollars or more the you realise that if you're trying to get them to take on a job at nine dollars an hour, it is going to be an uphill battle.

Scoop: My specific point though is when you discover the top beneficiary it relates to some particularly tragic case where the money is mostly going on other bills.

Muriel Newman: No, no no. You are not listening to my example.

Scoop: But I am specifically talking about the top beneficiary?

Muriel Newman: But hang on you haven't listened…It is only by asking questions that you can understand where the incentives are in the welfare system, and whether it is reasonable to expect these people to move into a ten dollar or eight dollar an hour job.

Scoop: But what I'm saying is that you will be able to get the figure but the individual case won't be looked into because of privacy issues?

Muriel Newman: But we can figure it out.

Scoop: But in the (news) paper it will say beneficiary is on 40K?

Muriel Newman: Usually, the Ministers tell you some of the story,

Scoop: In the media that is what the story is and everyone goes 'oh my goodness a beneficiary on 40K!'. Is it not the most random strange set of circumstances that can create that?

Muriel Newman: The question is, if that person is able bodied how are you going to get them into a job.

Scoop: Presumably the person had a large number of children?

Muriel Newman: The question then becomes how do you provide support so that those adults in that family can get a job so that they can become independent of the state.

Scoop: Is it ACT that is sponsoring the symposium?

Muriel Newman: No, it's me.

© Scoop Media