Breaking the cycle of disadvantage

Dr Bryce Wilkinson
Insights Newsletter
1 December, 2017

Government welfare must do a better job of breaking the cycle of disadvantage.

That message was common cause amongst the audience at the launch this week of the New Zealand Initiative’s latest report Welfare, Work and Wellbeing: From Benefits to Better Lives. The report can be downloaded freely from the Initiative’s website.

Myself, as author, and Sue Bradford, who wrote the foreword, spoke to it in front of a diverse and knowledgeable audience of about 100 people.

My presentation focused on the pipeline of intergenerational misery that has become entrenched in recent decades.

Shamefully, fifteen percent of babies born in 1990-91 had come to the attention of Child Youth and Family for abuse or neglect reasons by age 18.

By age 21 their average outcomes for educational attainment, crime, and early entry to the benefit system were shocking.

Those concerned about lifetime economic inequality – and who is not – could usefully start right there.

The fiscal and wellbeing costs of those who enter the benefit system as teenagers is massive. They commonly come from beneficiary families, often sole parent ones, and/or have been abused or neglected as children.

Actuaries have consistently found that around 75% of the future fiscal cost of benefits is attributable to those who first become beneficiaries as teenagers. Seventy-five percent of $76 billion is $57 billion.

Programmes that work to help people overcome their predicaments should be win-win for wellbeing and taxpayers.

Sue Bradford compellingly expressed the view that the existing benefit-work sanctions regime was punitive and welfare reducing.

The challenge of finding non-punitive programmes that work has now passed to the new Labour-led government.

There was widespread scepticism within the audience about the capacity of the central government to work well with NGOs.

This scepticism was offset by considerable optimism and knowledge about the capacity of non-governmental NGOs to find solutions, if freed up to do so.

That could only happen if funding and governance arrangements devolved power and accountability.

This echoes a long-standing theme of The New Zealand Initiative. Local communities often know their own needs best.

Perhaps the most positive thing about the launch was the extent of the common ground and the absence of grandstanding about ideology. Long may that last.

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