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How is Government evaluating its welfare reforms, and why aren’t we allowed to know?

by Michael Fletcher

Welfare reform is one of the Government’s flagship policies. By any standards it’s a major public policy initiative – arguably the biggest change to our welfare system since the introduction of the Domestic Purpose Benefit 40 years ago.

Government estimates the changes will save more than $1 billion over four years and reduce the number of people on benefit by up to 46,000. More importantly, the goal of the reforms is to help people at risk of long-term benefit receipt into employment to attain better social and economic outcomes, higher standards of living, less risk of poverty and extra resources for their children.

The impacts of the reforms are therefore a matter of major public interest. They affect not just the 300,000 or so people and their families who are on benefit but all of us, both as taxpayers and as people who may at some point need social security support ourselves.

It’s disturbing therefore that the Ministry of Social Development is refusing to make public its welfare reform evaluation plan, the document which sets out how they intend to assess the reforms’ effects.

To date, the main information about the impacts of the reforms has been the annual estimates of "future welfare liability". These million-dollar reports from Australian consultants Taylor Fry use a black box which, in simplified terms, tallies up the change in the number of people on benefit giving extra points for reductions in the number of people such as sole parents and the disabled who might typically need a benefit for longer. The Minister lauded the most recent report (see Minister’s press release here) which estimated a $4.4 billion reduction in lifetime welfare costs due to factors that MSD is judged to have some capacity to influence. (NB: Since this post was submitted the ministry has published its "first internal actuarial report produced in relation to the forward liabilities of the welfare system.")

That’s fair enough. A reduction in welfare numbers is potentially a good sign. What it doesn’t do is tell you anything about the lives or circumstances of those who’ve left the benefit, or those who never got through the Work and Income processes to get the benefit they need. Have these people’s lives improved? Are they in secure jobs that give them and their kids a higher standard of living? In other words, are the reforms achieving the objectives claimed for them?

These are questions you’d expect the evaluation plan to address. But the Ministry of Social Development – in consultation with the Minister’s Office - has decided it is not in the public interest that the public should know how the reforms will be evaluated.

Last December Dr Simon Chapple from Otago University wrote to the Ministry asking for a copy of the evaluation plan and related material. He was told six relevant documents existed, including the Welfare Reform Evaluation Plan – July 2013, but that all were being withheld under provisions of the Official Information Act.

Two reasons were given. The first was to protect the conduct of public affairs through the free and frank expression of opinion. The second was that because the information is under active consideration the wider public interest of effective government would not be best served by release. Sure, some of the other documents cited were evaluations and they may not yet be complete and ready for release, but the evaluation plan itself?  Eighteen months after the Cabinet decisions and with some evaluations already underway how can that be?

So, on 1 April I also wrote to MSD and simply requested a copy of the plan. First I was told "we don’t usually release these". Really? Since when have policy evaluation plans not been publicly available?

Then I was told I would need to start over and make a formal OIA request. I pointed out that any request of this sort is automatically governed by the OIA so my request of 1 April comes under the Act – and must be dealt with ‘as soon as practicable and in any case no later that 20 working days after it was received’.

Then on 24 April I received a letter saying MSD "needs to extend the time available to answer my request". I complained to the Ombudsman and finally, on 8 May, I received a reply, declining my request. The Ministry explained (the law requires an explanation) that:

… [the] evaluations are expected to continue for a long period with further analysis as more developments occur. As these evaluations continue, the evaluation plan is also constantly evolving to ensure that it can best meet the demands of this large, complex and long-term piece of work. Therefore I must withhold the Welfare Reform evaluation plan under section 9(2)f(iv) of the Official Information Act as it is still under active consideration.

This, frankly, is nonsense. It is common in long evaluation projects for policies to change part way through and, yes, sometimes that does mean amending the evaluation process. That is no justification for keeping the original plan secret. An agreed evaluation plan must be available to the evaluators so they can begin their work. It should be publicly available as well. If the Ministry’s logic is to be accepted, the public could never know how a government proposed to measure the effects of any policy until after the event as future "developments" would always be a possibility.

I have asked the Ombudsman to investigate the Ministry’s decision. But as the Minister and the Ministry both know, the Ombudsman’s Office is overloaded and decisions take many months, by which time the work will have been done, the evaluation money spent. Besides, as the Ministry told me, they hope to be able to release some material in “late 2014”. That is to say, after the election is safely over.

Twenty months after the first of the welfare reforms took effect and with an election just a few months away, we not only don’t know whether the reforms are improving New Zealanders’ wellbeing; we don’t even know how Government and the Ministry intends to measure whether or not they are. The reforms are in large part based on a strategy that one previous head of Work and Income was said to have described as ‘shaking the tree’ – imposing conditions and obligations on beneficiaries that make it harder to stay on (or get onto) a benefit.

It’s an easy strategy for reducing welfare numbers and the ‘fiscal liability’. And, yes, it will identify some who could be working. But it also risks shaking off some of the most vulnerable, those without the strength and determination to cling on to the tree however much they may need it. Most don’t have the tenacity and articulateness of Sarah Wilsonwho has documented her dealings with Work and Income.

Neither do we know if the reforms are succeeding in their basic aim of helping people into employment. One thing we do know is that in its recent Delivering social services every day report the Government states that “every week, around 1,500 people leave benefit into employment”. That is actually 11 percent fewer than the 1,690 1999-2005 weekly average reported by the Welfare Working Group in its Issues report. It’s likely the flow of people into jobs will increase as the labour market picks up, but on the face of it, it doesn’t appear that the new policies and operational processes have resulted in any sort of step-change in placements into employment.

Welfare reform is about so much more that saving on benefit costs. As the Government and the Welfare Working Group both argued, its objectives are to improve the lives of ordinary New Zealanders. Publicly available monitoring and evaluation information on these outcomes – on what is happening in the real world outside Taylor Fry’s black box – is the only way we can judge the success or otherwise of the reforms. So why is the Ministry of Social Development hiding behind the Official Information Act to avoid telling us how they plan to do that? Are they only interested in cutting the fiscal liability?

Michael Fletcher is a social sciences lecturer at AUT University in Auckland.

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