PM’s ‘tough love’ part theatre, all politics
Prime Minister Christopher Luxon warned in his state of the nation speech he would be bringing “tough love”, and he decided to deliver it a day later. He announced the Government had instructed the Ministry of Social Development to make more use of its powers to impose sanctions on beneficiaries who don’t turn up to job interviews, training or meetings with Work and Income.
Choosing to make it the centrepiece of the post-Cabinet press conference was more about pure political theatre than the substance of the move. It was not news of anything new, but rather a stop-gap measure before National brings in its own newly packaged sanctions regime toward the end of the year.
In the meantime, Social Development Minister Louise Upston had written a letter telling her ministry to use the existing sanctions more frequently, please.
Given the noise National had long made about the comparatively low use of those sanctions under Labour, the ministry had presumably worked it out and didn’t need a letter. But the letter gives National something to release now.
The fact it was largely theatre does not mean it is not good politics.
Talking tough about the jobless is almost always good politics for a National Party leader and Luxon does it well, talking about “tough love” and telling the young unemployed that their “free ride is over”.
He can do it, safe in the assumption a fair chunk of voters will feel he is more than justified. Luxon even baldly identified some, saying hardworking lower and middle-income workers, whose taxes paid for the benefit system, should know the Government was not letting beneficiaries off the hook when it came to finding a job. He did not mention high-income earners — perhaps he assumed it was obvious.
It also let Luxon set the agenda on the issue ahead of his coalition buddies, Act leader David Seymour and NZ First leader Winston Peters.
There were the usual mentions about the importance of the benefit system as a safety net and a brief mention for those who go on the benefit and do their utmost to get a job. However, most of the attention went on the much smaller group that did not bother to do so.
Luxon’s message to the unemployed was that the sanctions were avoidable: Beneficiaries who are able to work just have to keep their side of the bargain, as he puts it, and turn up to meetings and job opportunities.
By the end of the year, he’ll be able to do it all over again once the new system is ready to go.
That will see a bit of a three-strikes approach, dressed up as a traffic light. People who breach their conditions once or twice will be on the orange setting and given a talking to, people on the red setting with three or more will be sanctioned.
Unemployment — especially longterm unemployment — has been a sticky issue for a long time.
Asked what evidence there was that sanctions were effective at getting people into work, Luxon simply pointed to the growth in numbers on the unemployment benefit since 2017 and said something had to be done. Those numbers went up massively during Covid-19, then tailed off before rising again.
That does identify the problem, but not necessarily the solution. There has been research by the Welfare Expert Advisory Group showing sanctions have limited effectiveness.
It will also raise the long-standing concerns about the impact of sanctioning households where there are children — the lower sanctions that apply to those with children only partly ease that. It also coincides with a bit of a focus week on child poverty — the latest data is due on Thursday.
In the same week, National will push through under urgency changes to the way benefits are indexed, leading to smaller rises.
National will also set its targets for child poverty reduction soon — and then prove it can deliver on them.
Its sanctions system looks like a blast from the past, when the former National Government introduced its sanctions, including on sole parents (now revoked by Labour.) The politics of it hasn’t changed much, either.