The Welfare Reforms of the Fourth (1990-99) and Fifth (2008-14) National Governments : A Critical Analysis and Evaluation

Abstract

This thesis seeks to describe, critically analyse and evaluate the welfare reforms of the Fourth (1990-99) and Fifth (2008-2014) National Governments. I develop a theoretical framework for these tasks, drawing from the social democratic and neo-Marxist traditions of the political economy of welfare. In particular, the theories of Gosta Esping-Andersen and Frank Castles are used. Esping-Andersen developed a set of criteria for categorising welfare states, leading to the identification of three regime types: liberal, social democratic and conservative. Castles argues New Zealand was part of a separate category, which he characterised as the Wage Earners Welfare State (WEWS). The WEWS linked social security to participation in paid work, and ensured full employment for working-aged males. These theories are complemented by the insights from the neo-Marxist tradition, which provides a more critical analysis of the role the welfare state plays in maintaining capitalism. This framework is supplemented by an analysis of the new paternalist school of thought originating in the United States. New paternalism strongly influenced the welfare reforms of the Fourth National Government, and provides a basis for critically analysing the similarities and differences of the two National Governments.

The thesis then outlines the focusing on the Fourth and Fifth National Government’s respectively. Each of the Fourth National Government’s three terms is described and analysed. This Government’s welfare reforms initially focused on improving the financial incentives facing beneficiaries, but by the end of National’s reign the emphasis had shifted to implementing obligations, backed with the threat of sanctions. I argue this reflected a move away from a neoliberalism dominated by classical liberalism, to a neoliberalism more heavily influenced by conservatism and new paternalism. The Fifth National Government has reintroduced and expanded the obligation and sanction-based approach, reflecting the influence of a neoliberalism influenced by conservative principles.

Overall, I argue that a neoliberal welfare regime emerged under the Fourth National Government, which has been entrenched by the Fifth National Government. This critical investigation has generated four key findings. First, it is demonstrated that new paternalism heavily influenced the reforms of the Fourth National Government and the Fifth National Government continued to implement paternalist reforms. Second, New Zealand has clearly moved towards what Esping-Andersen identified as the liberal welfare regime, which excludes and stigmatises beneficiaries. Third, I draw on the argument that the WEWS has been “hollowed out” by welfare reforms. I demonstrate that the WEWS now represents a Trojan horse, which maintains the valorisation of work and protection for working families, but brings with it increased inequality, poverty, and stigmatisation and exclusion of beneficiaries. Finally, underlying these welfare reforms is a changed relationship between the state and the reserve army of labour. The state is now driven by two goals: to decrease the cost of the reserve army to the state through reduced welfare spending and to assist the growth of low quality work by encouraging beneficiaries into jobs characterised by low wages and little job security.