One of the government’s biggest tests this term in its quest to establish a durable majority will be welfare.
In the 1999 Speech from the Throne Helen Clark aimed to “correct” what she felt were the excesses of 15 years of reforms by free-marketeers and reducers of the state.
Today’s Speech from the Throne is a more challenging exercise — or should be.
This is the term that will decide whether Clark will re-map the political landscape for the next half-generation or more. That does not mean just winning the next election. It means establishing a policy platform on which future governments of any stripe will feel bound to build their policy superstructures.
Core to that will be the course Labour sets with welfare.
In the 1990s it was fashionable for the right to attack welfare as crowding out the private sector and so constraining wealth production. Welfare was also said to rend the social fabric and sap its recipients’ moral fibre.
The policy response, sporadically and irresolutely pursued, was to impute obligations to those on state assistance: a sort of “spare the rod, spoil the child” approach.
The left’s response was indignation and assertion that it did not work. But indignation does not wish away the steady rise in numbers on state support ,which crowds out spending on the left’s treasured health care and education projects. This is starting to bother some ministers.
Social Services Minister Steve Maharey’s solution is to replace “security”, the cornerstone of the welfare state since the 1930s, with “opportunity”.
Down the track that also implies “responsibility” (another favoured Maharey word) to take up opportunities. (An apposite idea, the right would say, the welfare state having eroded the notion that people are responsible for what they do — to the point where a smoker, despite having chosen to smoke, is now suing a cigarette company with state legal aid.)
Maharey wants the state to help create real opportunities for people to support themselves. To do that he says the state must remove some of the perverse incentives which discourage beneficiaries from taking jobs. And that requires extra spending to ensure they don’t lose out in the transition to the workforce.
So the role of “security” henceforth would not be an end-state, as now for many, but a platform for “opportunity”.
“The state’s whole raison-d’etre ought to be to put you (a beneficiary) back in a position where you are running your own life,” he says.
Late last parliamentary term Maharey’s Ministry of Social Development put up a raft of papers along these lines.
He hasn’t got buy-in from colleagues yet. But he says the mood among them — and, critically, in the Treasury — has “moved from too hard, too costly and pie in the sky” to at least a willingness to discuss a shift.
There are two problems.
One is money. Ensuring a “smooth transition” from dependency to training and work is expensive because it involves support through the transition. Maharey also thinks he needs, as part of that, to simplify the benefit system, which would cost more than the present system.
Maharey wants that extra government spending seen not as consumption but as investment. He cites estimates that getting 10,000 young people off the dole and over their lifetimes saves $450 million directly and another $250 million indirectly.
But assessing the value of an investment takes time. Even if his ideas were in full force now, he couldn’t present a positive balance sheet by the next election. Building new hospitals gets much faster political returns.
Maharey has two aids. One is that the Canadian Treasury has accepted the “investment” approach. He sees glimmerings now that the Treasury here might also.
And he has his “social indicators” project. Launched last year, this aims to assess progress or regress against a raft of measurements of the nation’s social health. As the numbers come in year by year, he will have both a stick (of political embarrassment from published deteriorations) and a carrot (of signs of improvements) to wave at his colleagues.
It would be easier to leave welfare undisturbed. But it would go on crowding health and education. And that is not the basis for long-term Labour domination of our politics.