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A social contract between the Government and its citizens was established in New Zealand legislation with the Social Security Act 1938. Government would provide financial assistance for New Zealanders unable to achieve an adequate standard of living (which remains central to the social security system), alongside other critical support such as access to health care, education, housing and adequate employment. In return, people receiving financial support would participate in training or other activities and seek employment when appropriate. This social contract is now out of balance.
The current system is based on conditionality including sanctions and is tightly targeted, with inadequate support to meet even basic needs. The experience of using the system is unsatisfactory and damaging for too many of the highest need and poorest people. We heard overwhelmingly during our consultation that the system diminishes trust, causes anger and resentment, and contributes to toxic levels of stress. There is little evidence in support of using obligations and sanctions (as in the current system) to change behaviour; rather, there is research indicating that they compound social harm and disconnectedness. Recent studies recommend moving away from such an approach towards more personalised services. For the welfare system to work effectively to deliver the new purpose, principles and values we conclude that mutual trust between parties is essential.
Given this, we propose a system based on whakamana tāngata – an approach based on mutual expectations and responsibilities governing interactions between the state and welfare recipients. It is a commitment to improving wellbeing by supporting positive long-term outcomes for the individual, including increased skills and labour market capability. This approach must immediately reform the current obligations and sanctions regime.
The proposed mutual expectations and responsibilities need to be responsive to the circumstances of the individual in a way that will meet the proposed values of the system, with robust checks and balances to mitigate potential negative impacts on individuals and their families. The overarching expectation of both recipients and the Government is to act with respect and integrity in their mutual interaction.
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