How the Government justifies crackdown on welfare recipients
Prime Minister Christopher Luxon has launched an opening salvo in the Government’s promised war on welfare dependency – bringing the full weight of financial sanctions down on beneficiaries who don’t take obligatory steps to find work.
Cue the outrage, already predicted by the prime minister. In a speech to party faithful on Sunday, Luxon promised “tough love” and he sought to quickly deliver it this week, at once consuming media attention and giving the impression of a National-coalition Government getting things done. Expect more tough love to be doled out soon.
And in justifying the move, Luxon has deployed a two-fold strategy throughout press conferences and interviews this week – talking up questionable data on benefit dependency, and emphasising the classic centre-right principle that is rights and responsibility: “The free ride is over.”
Luxon contends that Labour has let too many people linger on welfare. In explaining why sanctions are needed, he’s referred to a series of statistics that trouble the Government. But, intentionally or otherwise, he’s conflated projections with actual statistics.
Repeatedly, Luxon has said the average time spent on the Jobseeker benefit has risen from 10.5 years to 13 years, and young people on the youth benefit “are now languishing” on welfare for an average of 24 years.
But these figures are not hard data about the current outcomes of the welfare system. In fact, they are misrepresentative of the actual average time spent on the Jobseeker.
Luxon is referring to figures from a Ministry of Social Development modelling report that shows a possible future, based on assumptions including that current government policies remain, and economic projections (which are hardly set in stone) are true.
This possible future, according to report writers Taylor Fry, has been getting worse – as Luxon refers to. But this is not necessarily the current state of affairs.
Instead, the average time spent on the Jobseeker benefit, according to the Ministry of Social Development, is no more than three years, depending on how you cut the data.
There are different ways to cut the data, and two different types of Jobseeker support: the “work-ready” benefit, and the “health condition and disability” benefit.
The average time spent on the Jobseeker overall – combining the total days spent on the benefit, divided by the total number receiving it – is 1163 days or three years.
For just those on the “work ready” – those who are most ready for full time employment – it’s 848 days or more than two years.
This falls well short of Luxon’s claimed decade-long average.
Another measure provided by the Ministry of Social Development was the median duration spent on the Jobseeker. For work ready Jobseeker the median was 342 days, or less than a year. Meaning, as of December 2023, half the 109,698 people receiving this benefit had done so for less than 342 days.
For the 80,100 people receiving the health condition and disability Jobseeker – provided to people unable to look for work at the current time – the median was greater, 884 days or more than two years.
The number of people receiving the Jobseeker benefit did increase under the Labour government. Luxon has routinely spoken of 70,000 more people on the Jobseeker benefit in six years, and this 57% increase occurring alongside a 58% reduction in the use of sanctions.
However, no hard causation between this lessening of sanctions and rise in Jobseeker recipients has been established.
(Also, Luxon rounded up – there was an increase of 66,757 people on the Jobseeker between between December 2017 and December 2023, an increase of 54%. An alternative way of looking at this: the percentage of the working population on Jobseeker grew from 4.2% to 5.9%.)
Whether sanctions push people into work is a matter of dispute, and amid a paucity of evidence there are two primary sources the Government and its critics look to: a 2010 MSD paper which says the threat of sanctions increases benefit exits, and a 2018 review that said “very harsh” sanctions could drive people away from work.
When questioned on the evidence earlier in the week, or asked about how many beneficiaries were not meeting their obligations, Luxon at times pivoted to the “very simple principle of rights and responsibilities”.
“The vast majority of beneficiaries are doing a great job, they’re holding up their end, they’re doing their obligations, but for those that refuse, I’m sorry but we’re not going to be apologetic about making sanctions come into play.”
For the Government the ratcheting up of sanctions is more a step toward a broader effort to curb the welfare state. A wider overhaul of the sanctions regime has been promised.
Labour and the Green Party politically oppose the use of sanctions, which they consider a punishment that takes money from already impoverished families on welfare. Yet the Labour government largely left the sanctions regime intact, instead directing the ministry to ease off somewhat. Already both parties have condemned the Government for “bashing beneficiaries” and penalising the poorest people.
The decades-old political debate between Labour’s emphasis on the welfare state, and National’s insistence on rights and responsibilities, won’t end here. The pendulum is just swinging right again.