Next steps for our reform of the welfare system

PM’s weekly column 

I’ve just returned from a very successful trip to Russia to attend the 20th Asia-Pacific Economic Cooperation Leaders’ meeting.  It was a great opportunity to talk to world leaders about some….. of the major global challenges we’re facing, and the importance regional economic integration will have for our future prosperity.

On my way back to New Zealand, I stopped in Japan for a successful meeting with my Japanese counterpart Prime Minister Noda.  I also travelled up to the Tohoku region to attend a memorial service for those who lost their lives in the Great Eastern Japan Earthquake, soon after the Canterbury Earthquake last year.

New Zealand and Japan have shared experiences of suffering from natural disasters that occurred only a month apart.  I took the opportunity to thank the Japanese people for their kindness and solidarity after the February 2011 Christchurch earthquake – when New Zealand called for help, Japan was one of the first countries to offer assistance.  When Japan needed assistance in return, we were only too happy to be in a position to help.

Our two countries have been through enormous tragedies.  But we are also recovering and rebuilding. And in that process there are many opportunities for New Zealand and Japan to work and learn together. Back in New Zealand, the Government has announced the next steps in our comprehensive overhaul of the welfare system to ensure we support people off welfare and into work.

The Government recently undertook an in-depth look at the true value of our welfare system.  We found that the lifetime cost of the current beneficiary population to the taxpayer is $78 billion dollars. This tells us that we are on the right track with our investment-approach to helping more people who are capable of work, to find employment, and move off a benefit.

This week we also announced that we are delivering on another election promise – to strengthen the obligations placed on those who are beneficiaries. We’ve announced new social obligations as part of our reforms that place important health and well-being obligations on parents to ensure children of beneficiaries get the best possible start in life.

Beneficiaries with dependent children will need to ensure their children are enrolled in at least 15 hours of Early Childhood Education and ensure they attend school from age five or six.  They will also need to be enrolled with a general practitioner and complete core health checks. We expect ‘reasonable steps’ to be taken to meet these obligations and we will work with those families where barriers exist. Parents will have three opportunities to meet these obligations before a financial sanction of 50 per cent of their benefit will apply.

These obligations are reasonable, and many parents are already putting the needs of their children first by completing these basic obligations. For more information you can read more about this on our website: