Australia Warned Against 'Copying' New Zealand Welfare System

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By Reissa Su | June 4, 2014 1:10 PM EST

New Zealand experts have warned the Australian government to not follow the island nation's welfare system. The Kiwi academics said New Zealand's welfare cuts have created "big holes" as the country is dealing with child poverty.

The Australian government has commissioned Patrick McClure to review the country's welfare system in 2013. A discussion paper and detailed report is expected in the coming weeks. Social Services Minister Kevin Andrews has repeatedly cited New Zealand's welfare system as an inspiration for developing reforms.

The welfare system of New Zealand has been under reform in the recent years with people being encouraged not to have any children if they are living on welfare. Under New Zealand's system, welfare payments are cut if Kiwis fail to meet "social obligations." Spouses are also obliged to repay benefits if partners mistakenly claim them.

According to reports, Andrews was hesitant to discard anything before the review by McClure but he has previously directed the former Mission Australia chief to scrutinise New Zealand's welfare system.

Auckland University of Technology senior lecturer Michael Fletcher said Australia should not be in a rush to copy New Zealand's welfare reforms since they have the risk of excluding people who needed government benefits badly.

New Zealand's reforms on its welfare system include streamlining payments into three major benefits like sole parent support, job seeker support and supported living payment. The system also calls for an increase in work focus while boosting conditions on benefits to get more people to find jobs.

Reports said that those who refuse a job offer will have their welfare benefits cancelled for 13 weeks. Those with children will have welfare cut in half for the same period.

Welfare system questioned

According to Fletcher, the basic "safety net" in New Zealand has been questioned because the number of people who are in "special hardship" to qualify for emergency welfare had increased 43 per cent between 2007 and 2012.

He said a large gap now exists between people being recorded as unemployed and those receiving benefits in a labour survey by Statistics New Zealand. Fletcher said they have no evidence as to the type of welfare reforms that had an effect on unemployment rate.

New Zealand's unemployment rate fell from 7.2 per cent in September 2012 to 6 per cent in March 2014. However, Fletcher said the improvement came from the country's economic recovery and general improvements in the labour market.

University of Auckland Associate Professor and Co-director of Retirement Policy and Research Centre Susan St. John said New Zealand is dealing with child poverty which is an issue not evident in Australia. She said New Zealand's welfare system was "one of the biggest factors."

She advised the Australian government to examine the impacts before copying the Kiwi welfare system. St. John said New Zealand's tax benefit policies affect children from low-income families and causes poverty. She said "it's nothing to be proud of."

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