Tuesday 21 July 2009

Welfare reform for New Zealand

I'm greatly looking forward to reading Lindsay Mitchell's forthcoming report for the New Zealand Business Roundtable. One interesting suggestion, as reported in the National Business Review:
It also suggests the Work and Income Department could be privatised, loans could replace benefits, and that people could opt out of the public health and welfare systems in return for tax relief and accepting responsibility to fund their own needs.
I'll be interested to see how Lindsay proposes the last option work. It's well neigh impossible for the median voter to bind herself against the argument from pathos, so anyone opting out of the welfare or health system has an implicit option to jump back in should hard times eventuate. Consequently, any proposed system needs some pretty robust mechanisms to ensure that isn't necessary for folks to jump back.

As a first cut, I'd expect strong requirements for evidence of sufficient ongoing private health insurance as condition for exit from the public system; I'd also expect similar requirements for income protection insurance or ongoing evidence of substantial liquid reserves for exit from the welfare system. I wish these sorts of things weren't required, but time consistency isn't the median voter's strong suit. It'll be interesting to see what Lindsay here suggests.


  1. Hi there, I am investigating New Zealand and its place along the spectrum of personal and economic liberty in the world. This post was really interesting to me. Do you post often on these types of developments in NZ?

  2. Occasionally; hit the "New Zealand" tag. I'm overdue for another generalized NZ economic situation report...will get to it soon...