Some people living in poverty—Minister

Press, 26 July 1986, Page 9

Some people living in poverty —Minister

PA Wellington The welfare State was in crisis and some people were living in poverty, said the Minister of Customs, Mrs Shields. The taxation and benefits system was riddled with injustices and there was also no equality of opportunity, she said. The most compelling sign of crisis in the welfare State was the existence of poverty, she told the Hearing Association’s annual meeting in Palmerston North yesterday. Too many people were cut off from the community’s ordinary life by poverty, Mrs Shields said.

“The most common cause of poverty is not old age or unemployment but having children,” she said. There were inconsistencies in the system of income maintenance. Most had arisen because of ad hoc benefit creation as needs had arisen. The tax system had also added its own inconsistencies, dragging people with quite modest incomes into higher tax brackets. At the upper end of the income scale avoiding tax had become an art form. There was no equality of opportunity in health care, or education and a '

discrepancy between social services for Maoris and pakeha. Mrs Shields said the Government was committed to reforming the welfare State. It was pulling the plug on subsidies for businesses and the personal income tax structure was also due for dramatic change. The Royal Commission on Social Policy, due to meet for the first time in September, would be the most extensive review since the passing of. the Social Security Act in 1938, she said. It would set the scene for social development for many years.