NZ's ills blamed on end of welfare state

A REPORT by the United Nations Children's Fund (Unicef) offering 'a cautionary tale' about the effects of dismantling the welfare state has put a twist into the final stages of the campaign for New Zealand's general election on Saturday.

The report, entitled Child Neglect in Rich Nations, has embarrassed the conservative National Party government, which is campaigning for another three-year term on its claim of having initiated an economic recovery.

The Unicef document says that New Zealand's adoption of United States-style free-market policies provides 'sobering evidence of the American model's ability to wreak havoc in both the economic and social spheres'.

It adds: 'Long regarded as one of the world's most enlightened social democracies, New Zealand has, since 1984, demolished a cradle-to-grave social welfare system in the name of economic efficiency. Nevertheless, untrammelled markets have not produced vigorous growth.

'On the contrary, eight years of stringent monetarist policies have produced massive unemployment, rising crime rates, a widening gap between rich and poor . . . The deterioration in living standards has been particularly severe among families with children, with predictable results. New Zealand now has the highest youth suicide rate among industrialised countries and reported cases of child abuse have doubled since 1985.'

The report was released in New York in September but copies have only just reached New Zealand.

Its publication here coincided with a report by a local economist, Brian Easton, claiming that the number of New Zealanders living below the poverty line had risen 40 per cent to 510,000 since the National Party came to power in 1990, mainly because of cuts in welfare benefits. 'Most of the increased poor were children and their family members,' Mr Easton said.

The opposition Labour Party, trailing the government in opinion polls, has seized on both reports as proof of its claims that National Party policies have widened the gap between rich and poor and created a permanent underclass.

The Prime Minister, Jim Bolger, has rejected the Unicef report, saying it was written before the economy began growing. He said the welfare system remains adequate to help the really needy and economic growth was the only way to improve the lot of lower-income workers.