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The BulletinMay 26, 2020

The Bulletin: Criticism over new ‘two-tier’ welfare payments

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Good morning and welcome to The Bulletin. In today’s edition: Criticism over new ‘two-tier’ welfare payments, National announces reshuffle, and a day of differing fortunes in the media world.

The government has announced a brand new income support scheme for those who have lost work – but in many ways, it immediately became notable more for what it wasn’t. To deal with the wave in unemployment caused by Covid-19, there will now be a 12-week period of payments of $490 a week, for all those who lost their full time jobs on March 1 or later. The rate will be set at $250 for part-timers, and both will be paid instead of the main unemployment benefit. It’s a massive programme, and is expected to cost about $1.2 bn.

But immediately, some of you with sharp eyes might have spotted what is wrong with this picture. So first, a bit more justification from the government. Stuff reports that social development minister Carmel Sepuloni says it is about creating “breathing space” for the new cohort of unemployed, who may struggle to find a job quickly amid an impending recession. People who lose their jobs might also have particularly high outgoings, and it was suggested by Interest journalist Jenée Tibshraeny on twitter that the move was necessary to prevent a mass wave of house mortgage defaults – “because our housing stock is (unfortunately) worth about 4 times that of our annual GDP”.

All hell quickly broke loose, because as you might have noticed, these payments are set at about twice as much as the main benefit. In effect, it creates a two-tier welfare system – and some argue that by doing so, it creates a line between ‘deserving’ and ‘undeserving’ welfare recipients, in an extremely arbitrary fashion. Let’s not forget that a lot of people were already losing jobs because of Covid-19 before March 1, not to mention the fact that people lose jobs through no fault of their own all the time. As Newsroom reports, it leaves out existing beneficiaries and migrant workers who are doing it tough right now too.

Finance minister Grant Robertson said that while unemployment is difficult at all times, “this is a recognition that this came from nowhere.” For many of those who find themselves in need and eligible, it will be a godsend. Writing on The Spinoff, researcher Max Rashbrooke has argued that it could be a sign of a looming shift in welfare policy, towards “both permanent social insurance and core benefit increases.” That whole piece by the way gives an excellent analysis of the structure of welfare systems, and is well worth reading.

But criticism has also come directly from the government’s own base. Not to put too fine a point on it, but now middle class people are going on the dole, and there is a perception that the government is scrambling to protect them when it previously wouldn’t have done the same for others who became unemployed. As a post on left-wing blog The Standard put it, “the government obviously fully understands the basic inequity and inadequacy of the welfare system or it wouldn’t be bolting this short term second tier onto existing welfare provisions. But I guess their only aim is to mollify the suburbs in these straitened times.” Remember, this is a welfare system that the government’s own working group described as difficult to navigate, and providing insufficient support for people to live off – a point made in this strong opinion piece on Stuff by Susan Edmonds.

And it is causing ructions between Labour and the Greens. Several highly ranked Green candidates, including current MP Julie Anne Genter, tweeted out messages saying that the party believed in raising main benefits, but couldn’t do it without more MPs in parliament. It’s a difficult line for the party to walk, because this episode exposes how little their insistences on welfare have mattered over this term of government. The party’s official twitter account also put out the erroneous claim that they were the only party pushing for higher core benefit payments – Māori Party co-leader Debbie Ngarewa-Packer said her party would seek to double them. A full report on Green Party anger was released this morning by Radio NZ, with an accusation from the Greens that Labour had broken a promise to overhaul the welfare system in their confidence and supply agreement.

Meanwhile, on redundancies, we’re starting to see some awful situations emerge of workers being pitted against each other for scarce jobs. Radio NZ’s Gill Bonnett reports that some of those cases even involve local and migrant workers being basically in competition with each other. Expect to hear more of these sorts of stories in the coming months.

Just quickly, a message from The Spinoff’s managing editor Duncan Greive: 

“The arrival of Covid-19 and lockdown changed The Spinoff, transforming our editorial to focus on the biggest story of our lives, taking a small team and making it a seven day a week news operation. But it also fundamentally changed us as a business, too. Prior to the crisis, around 20% of our editorial costs were funded by our Members. Now, that figure is north of 50%. The loss of some key commercial clients meant that change has to be permanent. If you’re already a member, please know that all at The Spinoff are incredibly grateful for your help. If you’re not, and can afford to contribute, please consider doing so – it really is critically important to our ability to cover the next phase of the crisis, in all its complexity.”

A fairly major reshuffle of the National caucus has been announced, and former minister and leadership contender Amy Adams is back in the fold, reports Stuff. Many of the ranking changes are minor, but some are huge, with key Muller allies getting big jumps, and a few Bridges backers suffering the consequences. There was also a bit of back and forth on the day over the future of Simon Bridges – Muller said in his press conference that Bridges was “considering his future”, and then Bridges immediately texted Newshub to say he had no plans to go anywhere, and would be running again to be the MP for Tauranga.

One issue for National going forward is that there is still very little detail or specificity about what they’d do differently to the government. That was rather brutally exposed in a forensic interview last night by Jack Tame on Q+A in which the only firm policy pledges were those that National has long argued for. While the details were kept deeply vague, Muller pushed the message hard that National would be better able to manage the economic recovery. However, they’re in a bit of danger there, because newly released IPSOS polling reported on by One News shows Labour is now more trusted in that that area than National.

A day of differing fortunes in the media world: The bad news first – Mediaworks has announced that more than 100 jobs are likely to go, as part of a wider restructure of the radio, sales, and ‘out of home’ divisions. Those staff who also took voluntary pay cuts will have that extended to September. On the other hand, it was a great day for the journalists at Stuff. Their former parent company Nine has agreed to sell Stuff for $1 as part of a management buyout, with the sale expected to be completed by the end of the month.

The deal will make Stuff a wholly-owned NZ media business, as opposed to being a cog in some wider conglomerate. In an industry where companies are so often subject to the ravages of private equity owners, this is probably the best case scenario. The news on the two companies, and what it will mean for the wider industry, has been captured in this excellent analysis by Duncan Greive. And because he’s just really into this sort of thing, Duncan Greive also analysed the news from the perspective of industry consolidation, and whether the trend could now switch towards devolution.

A few announcements were made yesterday around the alert level settings, and you can read about them in our live blog. From this Friday, the gathering limit will be increased to 100, and that is inclusive of all sorts of different gatherings. And a timeline for moving to alert level one was also announced, with a check on whether it can move to take place on June 8.

A law change that will delight DIYers across the country – building consents will no longer be needed for low risk structures, reports Stuff. Now before you rush down to the hardware shop, be warned – structures like garages and sleepouts will still need to comply with the building code. But the move is also expected to save an estimated $18 million in building consent fees, which converted into hours is a lot of weekends collectively spent in the yard.

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Right now on The Spinoff: Australian tech expert Mahmoud Elkhodr looks at the pros and cons of the government’s contact tracing app, and why it won’t help open up a trans-Tasman bubble. Future foods expert Rosie Bosworth discusses the role the food sector will have to play in New Zealand’s economic recovery. Michael Andrew meets the people behind an independent bike shop, and the piece is also a fascinating look at the concept of face to face interactions in retail. I speculate on the various permutations and outcomes National’s change of leadership could have on the wider political landscape. And Alice Webb-Liddall highlights 25 young women who are doing amazing work to help change the world.

For a feature today, an interesting analysis of medical science and how it is heavily based on male physiology. It isn’t really something I had hugely considered before, so I learned a lot from this profile in Outside of author and doctor Alyson McGregor, who has thought deeply about it. Here’s an excerpt that gets right to the point:

The way we treat cardiovascular diseases shows how a biased system can be harmful to women. Stroke shows up in unique ways in women: instead of suddenly losing function on one side of the body (as is common in men), women may have a migraine-like headache or a sudden change in their mental or emotional state when experiencing a stroke. These nontraditional symptoms can mean women and their health care providers take longer to realize something is wrong, delaying care. When women are treated, they are less likely to receive the appropriate diagnostic tests or medication in a timely manner.

The fact that most scientific research is conducted on men isn’t a secret. But scientific research doesn’t just live in academic journals. The findings underpin the diagnostic and clinical care plans physicians use to treat real people. “The whole medical care system is trained to look for patterns of disease. But because those patterns are based on years and years of research on men, when you go see your doctor or come to the emergency department, a lot of times disease states aren’t recognized in women,” McGregor says. It leaves doctors handicapped when trying to provide the best care.

In sport, a plug for an outstanding and well-informed column. The NZ Herald’s (paywalled) Any Given Monday column by Dylan Cleaver is always pretty good, but this week’s edition cuts through the spin on a range of topics that haven’t yet been thoroughly canvassed. Among them – the leadership of the Black Caps, and what exactly the philosophical differences between Kane Williamson and coach Gary Stead are based on. There’s also an analysis on how rugby’s business model will need to change, and whether the massive government funding boost for sport will end up where it is actually needed.

That’s it for The Bulletin. If you want to support the work we do at The Spinoff, please check out our membership programme

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