Wednesday, January 15, 2014

Welfare reforms working, says Bennett

RNZ asked me to comment on Paula Bennett's release today heralding the drop in beneficiary liability due to the welfare reforms.

Social Development Minister Paula Bennett has welcomed the latest valuation of the welfare system showing a significant reduction in the liability.
The June 2013 valuation shows the current lifetime liability[i] is $76.5 billion.
"Of the $10.3 billion reduction in liability[ii], $4.4 billion is due to Work and Income actively exceeding expectations by getting more people off benefit for longer, and less people coming onto benefit," says Mrs Bennett.

I had the luxury of half an hour to look at the numbers but concluded I'd have to take them on good faith. Future projections concerning so many people and so many variables are always going to be debatable. For example, some of the drop is due to CPI forecasts coming in lower than predicted.

But it's conceivable that a small drop in the percentage of beneficiaries can equate to a much larger drop in the percentage of projected liability (13 percent between June 2012 and June 2013). This is because some beneficiaries will use welfare for much longer than others. The reforms have targeted those people.

While the government is happy to claim responsibility for the improvement on their reform programme, other factors are also at play. The falling teenage birth rate, improving economy and falling youth unemployment.

In any event I have always believed the focus of the reforms - youth and sole parents - is the correct one. If the actuarial indications showing these reforms having a positive impact are sound, that can only be good.


Rosemary said...

Lindsay, do you perhaps have a comment to make about the number of people on the Supported Living Payment be adjudged "fit to work" and thrown onto the Jobseeker Allowance. A reduction of $50 or so per week, and absolutely no help to secure stable work.

These are the permanently disabled, the chronically ill, those with cancer or disabling medical conditions. Doctors are be instructed by WINZ to take the "arbeit macht frei" approach when assessing these people for fitness for work.

So, these disabled and ill people are out there competing with the young and fit and healthy for the paucity of jobs available.

What are they to do. Sign up for voluntary euthanasia perhaps?
Cease being useless burdens on society?

Regards, Rosemay McDonald

Lindsay Mitchell said...


You have information I am not privvy to.

The latest statistics pertaining to the Supported Living Payment show:

"Between September 2013 and September 2012:

The number of recipients of Supported Living Payment remained stable, increasing by 696, or 1 percent.