On July 20th, 2009, the Business Roundtable put forward its ideas about social security.

Their programme was radical to say the least. In a nutshell, their proposal is to delegate the provision of welfare to organisations such as churches, iwi and other non-government organisations.


This would be done through these organisations issuing loans to people receiving welfare assistance which has to be paid back once they get into employment.

While there are arguments in favour of reforming social security in New Zealand to make it fairer and more efficient this does not mean that social security should be reformed out of existence and the poor in New Zealand reduced to little more than beggars having to plead for charity that comes with strings attached, not least that it has to be paid back.

Some of the concerns that have been raised by benefit rights advocates is that people who are in need may find themselves having to access several not for profit organisations to get assistance and others may very well have to travel long distances to find a not for profit group that is willing to provide this assistance, especially as much of the assistance will be provided by groups that are hostile or indifferent to groups such as the gay and lesbian community, non-Christians, persons belonging to the wrong iwi and single mothers to name a few.

Of greater concern to many people is that many of these organisations simply don’t have the expertise, the resources or the will to provide more than the basic needs of the people that would be going to them for assistance.

To make matters worse, much of that assistance is likely be doled out on the basis of what the organisation deems to be a necessity for the person concerned.

An example of this could involve a person being deprived of essential medication because the organisation doling out the welfare believes that the person is a work-shy shirker rather than disabled because their disability isn’t an obvious one.

Another example is that people may be forced to accept food and other vouchers because the organisation believes they can’t be trusted to handle their own money.

However, the biggest concern of all is that giving cash-strapped not for profit organisations large sums of money opens the way towards large scale corruption as money is siphoned off to meet the “administrative costs” of the organisation rather than using it to assist the people it is meant to assist. It would open the way towards large scale cronyism and nepotism as such organisations show favouritism towards members of the organisation and relatives and friends of people involved in the running of the organisation.

And it exposes the person seeking assistance to being blackmailed or threatened through the withholding of assistance if they fail to join the organisation or undertake nefarious tasks for the organisation such as recruiting members.

It was largely due to widespread discrimination by not for profit organisations against the “undeserving poor” and persons whose beliefs or behaviours were deemed inappropriate – such as non-Christians and single mothers – and the dismal failure of these organisations to meet the needs of the people that came to them for assistance that resulted in theestablishment of the social welfare system in the first place.

Over the years, in particular 1938 with the passing of the Social Security Act, the New Zealand government has expanded the social welfare system to meet the needs of those who are unable to work due to unemployment, illness, disability, family circumstances or old age.

Returning from state funded social security to charity would not be a radical reform of social security but the reintroduction of a social order that last existed in New Zealand during the 19th Century when clergy, factory owners and farmers lorded over the working classes and the poor. The introduction of such “welfare reform” would constitute what one benefit rights advocate called “the Final Solution of the Beneficiary Problem”.

About the only comfort we can take from this is that even the hard line capitalists of the National Party are likely to reject the Business Roundtable’s proposals not because they are idealogically opposed to it but they understand that such a radical counter reform will meet with the anger of the working class. The National Government is undermining the welfare state in a piecemeal fashion hoping that workers are quiescent over cuts and back door privatisations that are being prepared.

What should anger every worker is that such a proposal was even allowed to emerge in the first place. This is a warning to the labour and trade union movement of what is to come.