The purpose and principles of the social security act: Getting it right

By Susan St John

It helps when you are going somewhere to know where you are going and why. Hence it is important to get the fundamental ‘Purpose and Principles’ of the Social Security Act fixed as soon as possible. The current ones have taken us a long way in the wrong direction. As the Irish might say, if you want to get to a better place, best not to start from here.

The Welfare Expert Advisory Group (WEAG report) Whakamana Tāngata: Restoring Dignity to Social Security in New Zealand made this point, advocating strongly that before reform, we need to agree on new ‘Purposes and Principles’ for the welfare state. It has taken government over four years to even begin to face this issue and the signs so far are not promising.  Despite the detailed and careful work of WEAG following wide consultation  it has been necessary, apparently. to produce a glossy report “The Foundation for Change Amending New Zealand’s Social Security Act 2018: the next phase in New Zealand’s Welfare Overhaul Work Programme”.  With many large colour pictures of a happy smiling, diverse but healthy NZ families the spin machine is well oiled. The substance is less impressive. 

The report is not yet publicly available but is the basis for a limited consultation process before it is considered by Cabinet. The proposed ‘Purposes and Principles’ are a tinkering of the discredited current ones, nothing like the substantive re-envisioning demanded by WEAG or argued by CPAG.

We should remember that Labour itself was responsible for the current dog’s breakfast of the ‘Purposes and Principles’ section of the current Act. Labour introduced the amendment in 2007 that stressed the primacy of paid work making outlandish claims for example that “work in paid employment offers the best opportunity for people to achieve social and economic wellbeing.” Social security was to be there only after people had looked to their own resources. Its purpose was to (grudgingly) relieve hardship, not to provide any kind of belonging and participation outcomes and security. Paid work featured 9 times. 

The National Opposition in 2007 could not believe its luck. In the House, Anne Tolley, rubbing her hands in glee, said ecstatically:

“ National is supporting this bill going to select committee. Why on earth would we not? We had been arguing this for seven years we want to tighten up the provisions in this bill this is basically just a wet dish rag of a bill designed to make the government look as if it is doing something but it is actually not doing very much at all” Hansard 2007

Labour’s changes to the Act, paved the way for National (2008-2017) to further undermine the welfare state by emphasizing the primacy of paid work and downplaying community responsibility and unpaid caring activity.  Being sick or disabled was no longer a reason not to be ‘gainfully’ employed. Beneficiaries were subject to new planning and activity requirements which meant that if they didn’t start planning for paid work they could have their benefit cut.  

A further unravelling of the welfare state was encouraged by the 2007 aim““to enable in certain circumstances the provision of financial support to people to help alleviate hardship.” This saw ever tighter targeting of welfare assistance with severe sanctions for non-compliance.  Poverty was used as a weapon to get desired behavior and an ugly culture developed in WINZ. For example, their powers to determine a relationship; its nature, its starting point and whether to prosecute. Penalties were imposed for infringements of the rulebook rule alongside an appeals process stacked in MSD’s favour and without oversight by an outside body.

An another unpleasant feature of the 2007 changes exploited by National was to expect that before asking the state for anything people should look to their own resources. “…that where appropriate they should use the resources available to them before seeking financial support under this Act”.

The culture took hold that if the beneficiary had borrowed money because they could not survive on a benefit such loans could be treated as income reducing entitlement to the same benefit. CPAG was involved in a case (Ms F) in which a family loan resulted in a review of a sole parent’s five years’ expenditure and establishment of a debt of overpaid benefit of $127,000. A High Court decision was needed to get this over-turned but there was no review of the practice and the implications for others similarly affected but without access to pro bono legal resources to sustain an 8-year fight with MSD.

So it is with some surprise that the latest efforts to rewrite the ‘Purposes  and Principles’  retains “where appropriate [beneficiaries]  should use the resources available to them before seeking financial support under this Act”.

The primacy of paid work is slightly moderated to “employment, where appropriate, offers the best opportunity for people to achieve wellbeing”. There is no visionary statement about the purpose of social security being not only to alleviate actual poverty when it occurs but to prevent it and enable participation and belonging in society.  Rather the best that can be can be mustered in the 2022 report is “Social security contributes to the wellbeing of the community by providing support to reduce poverty and hardship.” 

It is shameful that the work of WEAG is invisible, and even more time is expected of past WEAG members and voluntary organisations like CPAG to engage in so called consultation on what looks like a make-work exercise.

First published on The Daily Blog, 2nd March 2022