Mrs Hercus hints at benefit changes

Press, 3 November 1984, Page 2

Mrs Hercus hints at benefit changes

By

PATRICIA HERBERT

in Wellington

The Minister of Social Welfare, ■ Mrs Hercus, yesterday hinted that the Government will introduce means-testing for some benefits but not necessarily in the Budget.

The movement towards greater equity could not wait for economic recovery, she said. Both must begin immediately. The alternative was “a powder-keg society.”

“We must be committed now to intervening to reduce the impact of the inequalities and, bluntly, the system we have now is not doing that,” Mrs Hercus said.

“It is not targeting the people who need help nearly well enough and it is fraught with anomalies some of them grossly unfair.

“The operation of social policy in New Zealand is a classic case of everybody subsidising each other and those really needing assistance not getting it,” said Mrs Hercus.

She hinted that Housing Corporation loans and the subsidies available through tax deductions to homeowners might be focused to help those in need. As it was, they seemed to be going to the better-off, she said.

Health care might also be retargeted so that the poorer areas got the lion’s share. The present system seemed to ensure that $5 of the taxpayers money was spent in Remuera and Khandallah for every $1 in Otara and Porirua, Mrs Hercus said.

An important characteristic of many social policies — National Superannuation and the family benefit, particularly — was that they were paid out on a basis of assumed rather than established need, she said. “In hard economic times, careful targeting is vital. If we try to spread the help too thinly, we will not assist those who need help most.” Mrs Hercus hinted at changes to National Superannuation but provided few clues to her Government’s plans in this area.

The present system whereby all superannuitants received the same gross amount on the understanding that the better-off would pay more tax and thus receive less benefit was not working fairly, she said. However, she followed this with an oblique assurance to the great bulk of superannuitants either completely or almost completely reliant on their superannuation income that they would not be adversely affected by the proposed reforms.

Mrs Hercus’s address given to the Auckland Central Investigating Bureau, was one of a series given by Cabinet Ministers as a runup to the Budget. “One of our most urgent priorities as a Government is to see that families on low and moderate incomes enjoy an adequate standard of living,” she said. “In next week’s Budget, we will aim quite simply to give these families more money in their pockets.”

Mrs Hercus emphasised that the help would be targeted on the basis of outgoings rather than simple income.

“Consider the difficulty of defining who is low-paid,” she said.

“I do not regard a young person on $lO,OOO a year, living at home, as in need of help. I do regard a family on $20,00.0 a year with four children and the usual heavy outgoings as probably in need of help.”

It was also clear that .“some adjustment” was necessary to help bene-

ficiary families, she said. However, Mrs Hercus indicated that this would follow “a thorough review of the benefit structure to be set in motion after the Budget.”