Hard News by Russell Brown

Magic Bullets

John Tamihere had been too well-behaved for too long - a blurt was coming, surely. And it came: after a speech at the Knowledge Wave Conference in which he criticised his own government's welfare policies, Tamihere told the Sunday Star Times that Employment minister Steve Maharey was "bullshitting" about employment policy.

In his speech, Tamihere said the Government's welfare system was trapping people into dependency. He called for the system to be privatised:

"Welfare as presently practised in this country literally kills us with kindness. It hands out enough to get you through until your next handout. There are no mutual responsibilities. Recipients are denied a sense of worth and equality."

I don't object to anyone from any party canvassing such ideas - indeed, I wish we could just let people think out loud a bit more often, without dumping on them the way Asraf Choudhary was dumped on - but it's worth applying some context to what is said.

Firstly, of course Tamihere is going to talk up private welfare organisations - he was chief executive of a private welfare organisation, the Waipareira Trust, before he became an MP. The trust has done some good work.

But that's a long from the Balkanisation of welfare that Tamihere seems to be proposing. What happens to accountability when billions of dollars and tens of thousands of beneficiaries fall under a sprawling new system of service contracts? Do you really want the Pipi Foundation paying out the dole?

And, apart from anything else, the vast majority of people who have cause to use the unemployment benefit don't need or want private caseworkers running their lives for them the way Tamihere thinks they should. I was on the dole, with my family, for a time after we returned from the UK in 1991. I used that time productively and laid foundations for what become a fairly useful career. The money has been more than adequately returned in the tax I've paid over the last decade.

The biggest problem I had getting off the benefit was the savage abatement rate (it has eased a little since) on any independent income I did earn, and the inflexible nature of the declaration system - what motivation is there to work when you face a 97 per cent marginal tax rate on your efforts?

We have also recently heard Don Brash's bright idea of scrapping the unemployment benefit as we know it. What Dr Brash forgot to tell New Zealanders on low to middle incomes is that removing the social floor from under the most vulnerable would drag down the median wage, and effectively halt wage growth for about a quarter of earners, possibly for years. It might suit employers and high-earners, but it would be very bad for a fair chunk of the population.

How bad? Brash pointed to the Swiss system as an exemplar. Problem: there are two developed economies that have any significant incidence of the working homeless - that is, people who cannot earn enough from full-time jobs to house themselves. Those countries are the US, and Switzerland.

Fine, let's hear the talk about magic bullets. But - especially when unemployment is already at its lowest for 14 years - let's also bear in mind what happens when they miss the target.

PS: I've long believed it's okay for all of us to lust after sports stars - it's half the fun of watching the Olympics, isn't it? - but Sports Illustrated's annual swimsuit issue always seemed a pretty cheesy way to sell magazines. It still is, I guess - but this year they invited Serena Williams
to appear. Crikey.