8 Aug 2022

Luxon hits back, defending National's lambasted welfare policy

8:58 pm on 8 August 2022

Christopher Luxon is defending National's new welfare policy, saying Labour's approach is giving up on young people who want to work and consigning them to a life of poverty.

Leader of the National Party Christopher Luxon

National's leader Christopher Luxon says the party does not want to "give up" on young people, which means connecting them into work. Photo: RNZ / Angus Dreaver

Luxon over the weekend announced the party's new policy for welfare, a carrot-and-stick approach which would offer $1000 payments to those who stayed in work for a year and penalties for those who failed to follow their job plan.

It would also shift to job coaching for young beneficiaries through third-party services, rather than case management via the Ministry of Social Development.

Prime Minister Jacinda Ardern has been quick to criticise the policy, saying it showed National did not understand the current incentives. Social Development Minister Carmel Sepuloni said there was no evidence to support National's plan, and the Green Party decried it as forcing people into unsuitable employment while criminalising those who needed support.

Some support services warned the policy would not address the real reasons young people often needed the benefit, forcing them into work had been proven not to work, and it oversimplified the problems people were facing.

Luxon and National's Social Development Spokesperson Louise Upston defended it after a visit to Visionwest in Auckland, a community organisation that helps young people with problems including employment, housing, and other social challenges.

It was the kind of organisation the party wanted to "power up and empower more to get on and secure great outcomes," Luxon said.

"We want to be able to help them, that's why we want a jobs coach, a really good assessment and a really good individualised jobs plan."

He rejected the criticisms, saying he was meeting with people on the front line every week, and while he personally had never struggled to get a job, "I know people who do and I've supported people who've been in that place".

"The reality here is that we're in a perverse situation where we have employers up and down this country in every region and in every sector crying out for workers. And yet on the other hand we actually have young people under the age of 25 on the jobseeker benefit for more than a year almost doubling."

Ardern this afternoon said a number National's proposals "already exist".

"So that then leads me to the question of what it truly behind the proposals that they're making. A lot of it you see in the language. We take a very different approach - we need to make sure that we're removing barriers to work."

She said things like job coaches were already available in youth services, and the government had also put additional funding through the last budget to support driver training; and the Mana in Mahi offered $3000 incentive payments to encourage people to stay in work.

"I'd rather focus on tangible things that make a difference on the ground, rather than the rhetoric and the politicking," she said.

Sepuloni told Checkpoint the Covid-19 pandemic was to blame for the rise in under-25s on the jobseeker benefit, despite the majority of those numbers being before 2020.

"We have gone through quite a significant economic event and the people who suffer during these times, more than anyone else, are young people."

People were turning up for job interviews and at job expos, but they did not always get the job due to a lack of skills or not having their drivers license, for example.

"A number of them are showing up for things but they're not always being chosen for the jobs. So we need to put our weight behind making sure they have the skills that they need, that they are well enough to work as well and that they've got the support needed."

A number of young people on benefits were also working part time, but Sepuloni did not have recent figures on how many jobseekers were working part time.

Statistical spin?

National has been pushing hard on the Jobseeker benefit numbers, Luxon over the weekend saying under National there would be no more "free ride" for those who did not want to work.

Jobseeker support is provided to those who are actively looking or preparing for work, including those in part-time work and looking for more, or those with a health condition or disability affecting their ability to work.

The Jobseeker benefit pays about $230 to $330 after tax per person a week based on age, housing and family status - or up to $440 for sole parents. Those on the benefit are required to attend work ability assessments and activities with third-party service providers to continue receiving it.

Luxon said those with health conditions who may be feeling penalised by National's policy should take heart that they would have a job plan that was individual to their circumstances.

"We're only talking about the jobseeker benefit here in this conversation, but for those with health conditions what we're saying is we're going to get an individualised plan that's appropriate for you - and that's the key thing here."

Upston also pointed to the individualised work plans as the main change from National's previous policies and the status quo.

"This is individualised and that's the difference. It's hands-on, it's individualised and it's about getting outcomes. We don't want to fund things that don't work."

She acknowledged the jobs coaching scheme could mean a bigger upfront cost, but it would be worth it in the long term.

"Social investment in some instances means we will spend more at the start to get the outcomes we want ... surely for those young people who are facing barriers, that's also what they want."

The number of job coaches would be scaled up over time, she said.

Both have repeatedly turned to benefit numbers to support their stance - citing an increase of 50,000 on the Jobseeker benefit under Labour compared to under National.

Those numbers are indeed higher than in 2017 but Labour would argue a less punitive approach has made the benefit more accessible, and the numbers on Jobseeker increased from 136,233 to 190,455 between June 2019 and 2020 as Covid-19 began to have an effect. Since then, the numbers have been trending down - to 170,763 this year.

However, most of the change has been in "work-ready" jobseekers specifically, which dropped by 9.7 percent in the year to just over 100,000 people.

Luxon said the current system under Labour was to "abandon" young people.

"It is not good enough to say we're going to consign you to a life of poverty on welfare, the reality is if you go onto the jobseeker benefit under the age of 20 you're going to be on and off welfare for the next 12 years."

Economists have said the benefit numbers are not surprising and reflect the fact not all those who are unemployed receive the benefit, while warning low unemployment could continue to keep inflation high and contribute further to the cost-of-living crisis.

Labour recently celebrated strong wage growth and continued low unemployment rates - with a slight increase in the jobless rate to 3.3 percent, up from a record-low 3.2 percent.

Upston at the time said it masked an explosion in benefit dependency.

Mana in Mahi

Ardern denied young people were getting a "free ride" from the government, saying "any suggestion of that does a disservice to our young people".

She said young people were often those who bore the brunt of hard economic times, but "we have also seen record exits into work", pointing to programmes like Mana in Mahi and He Poutama Rangatahi.

Ardern and Sepuloni last week also touted Mana in Mahi, which connects job hunters with employers, and after four years had helped more than 5000 people into work.

Under the scheme, 90 percent of those on a benefit had not returned to it, including three quarters of those who had been on a benefit for at least two years.

However, 5000 is a small fraction compared to the more than 100,000 "work ready" beneficiaries, and many of those on the scheme were not on a benefit to begin with.

Upston said the scheme was not targeted to long-term beneficiaries.

"We want to interrupt the cycle, support people earlier and actually target programmes at the young people who need it most - and that hasn't happened with Mana in Mahi."

She said the party would absolutely continue the programme if it was getting outcomes, but it was also available to older people "and our focus with this policy is under-25s and specifically breaking the cycle of welfare dependency which means targeting at some of those who've been on benefit much longer".

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