Welfare savings

September 18th, 2012 at 10:00 am by David Farrar

Kate Chapman at Stuff reports:

Welfare reforms are expected to save up to $1.6 billion over four years.

Social Development Minister Paula Bennett yesterday introduced the second round of reform legislation.

The Social Security (Benefit Categories and Work Focus) Amendment Bill replaces the current benefits with three new categories: Jobseeker Support, Sole Parent Support and the Supported Living Payment.

I see the savings as a bonus, but not why this should be done. I think the major beneficiaries of these reforms will be the families of those who move into work.

What is described as an investment approach – based on an insurance model – is expected to save between $900 million and $1.6 billion by June 2017, with 44,000 people expected to come off benefits and up to 6000 working part-time.

I presume this figure doesn’t just include the reduction in benefit expenditure, but the increase in tax receipts as more people work.

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35 Responses to “Welfare savings”

  1. Bob R (1,375 comments) says:

    ***think the major beneficiaries of these reforms will be the families of those who move into work.***

    1. I think there is an issue with a lot of low skill work being off-shored or replaced by technology. Previously freezing worker or forestry jobs provided a reasonable amount of employment at a decent wage. In this respect I agree with Cambridge economist Ha-Joon Chang that governments should look to support local manufacturing.

    2. Anything that links work to survival would be an improvement on the status quo. In the past, poor women needed to find a husband to help support their children. Currently the trend is the reverse of the process in the lead up to the Industrial Revolution.

    “A Farewell to Alms: A Brief Economic History of the World, argued controversially that in pre-industrial England the rich replaced the poor demographically, and that this helps explain why England became more “bourgeois” in these years: less violent, thriftier, more literate, more numerate. Here evidence from a different source, surnames, again shows the takeover of English society by the economically successful between 1600 and 1851, and the disappearance of the criminal and the poor. A man’s economic success in pre-industrial England predicted a permanent increase of his surname frequency, and hence his gene frequency, by 1851.”

    http://www.econ.ucdavis.edu/faculty/gclark/Farewell%20to%20Alms/Clark%20-Surnames.pdf

    Similarly in China.

    http://infoproc.blogspot.co.nz/2011/08/demography-and-fast-evolution.html

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  2. Kevin (1,122 comments) says:

    Will they stop paying long term unemployed schood drop outs and solo parents to go to university while the bright kids (who are our country’s future) have to take out loans? Didn’t think so.

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  3. kowtow (8,487 comments) says:

    Tax receipts?
    Our low wage economy means a huge proportion of workers get it all back in other “benefits”.

    The whole economy needs reforming so that NZ becomes a genuinely wealthy country. Mining,drilling,exploring ,exploiting the resources we have would be a start. Instead of locking it all up for Chinese tourists to ogle at while our daughters serve them tea and clean the toilets.And our sons go to Oz to make serious money.

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  4. kowtow (8,487 comments) says:

    bob r

    Britain was able to send its poor and criminals to places like Jamaica (who talks of the white slaves?),North America and then Australia,very convenient!

    In those days there was also the army and navy where huge numbers were gainfully ,but cheapfully employed and killed overseas creating an Empire that made Britain wealthy,proud and strong.

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  5. Mighty_Kites (84 comments) says:

    If you know where all these jobs are that the unemployed can move into then speak up, because the government sure doesn’t have a clue. Rising unemployment and no sign of the promised 170,000 new jobs equals a non-performing government

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  6. Lance (2,655 comments) says:

    @Kevin
    “Will they stop paying long term unemployed schood drop outs ”
    Complete with spelling mistake…

    Brahahahaha

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  7. Kevin (1,122 comments) says:

    National would rather give all our money away to iwi and its “infrastructure” mates to build more roads to transport our non-existent goods to our non-existent markets.

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  8. Bob R (1,375 comments) says:

    @ kowtow,

    Good point :)

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  9. dime (9,972 comments) says:

    lance – i think its called a typo.

    so 3 new categories. replacing how many benefits?

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  10. Rex Widerstrom (5,354 comments) says:

    Mighty_kites notes:

    …no sign of the promised 170,000 new jobs…

    And even if there were, that’d solve about half the problem. According to that story, 135,100 people will be on Jobseeker Support, 87,100 on Sole Parent Support, 1,200 on Youth Payment and 1,500 on Young Parent Payment. That’s 224,900. According to the most recent Household Labour Force Survey, the level of under-employed (people in part-time work seeking more hours) was 109,500.

    That’s 334,400 people in need of a decent full time job. If the government intends increasing the already quite onerous obligation on beneficiaries to find work, it is beholden upon that government to explain how it will meet its reciprocal obligation to those people – namely to create the conditions that will enable and encourage the private sector to create those jobs.

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  11. Pete George (23,567 comments) says:

    namely to create the conditions that will enable and encourage the private sector to create those jobs.

    Admittedly this is an unknown quantity, but ‘encouraging’ more unemployed people to be able and willing to take on what jobs are on offer will create more jobs. Some employers give up trying to employ when they can’t find willing workers.

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  12. Bob R (1,375 comments) says:

    An opinion poll on welfare reform.

    http://www.stuff.co.nz/national/politics/7692857/Bennett-expects-welfare-reform-to-save-1-6b#comments

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  13. Kevin (1,122 comments) says:

    Dalrymple clip, culture of the underclass, a good laugh. http://www.youtube.com/watch?v=cro08DU4omk

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  14. seanmaitland (500 comments) says:

    So Rex – there are supposedly no jobs for these people, so why bother trying? – is that what you mean?

    Aside from tinkering with tax-rates (which has already been done), the government is not responsible for creating an environment that enables private sector jobs to be created. Using that as an excuse for people not getting jobs is bordering on the scrapping the bottom of the barrel so hard that you destroy the barrel and start digging into the ground for excuses.

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  15. wat dabney (3,769 comments) says:

    I think there is an issue with a lot of low skill work being off-shored or replaced by technology.

    Being low skilled is a valid excuse for someone still in their teens but not for anyone older.

    How can someone be twenty-something and still have no decent skills (or a good university degree to make up for lack of real work skills and experience)?

    And for those teens, the minimum-wage legislation a primary obstacle. They have been forcibly priced out of the market by politicians who see political gain in sacrificing the young.

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  16. Viking2 (11,471 comments) says:

    More bullshit from someone who should know better.
    Tell us about the jobs.
    Tell us why you won’t create youth rates.

    The Nats are a failure in employment. Always have been always will be.

    Its the flexible economy. well according to the top two, key and Joyce.

    Kiwifruit now stuffed, mussels rooted, half price for exports these days and we are suppossed to create jobs.

    Time they stopped playing with themselves.

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  17. seabreezeent (31 comments) says:

    Rome, fiddling, burning.

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  18. Bob R (1,375 comments) says:

    ***How can someone be twenty-something and still have no decent skills (or a good university degree to make up for lack of real work skills and experience)?***

    @ wat dabney,

    Easy. They do poorly academically, drop out of school, smoke drugs, go on welfare, maybe join a gang. There are a number of people who lack the self control and future planning ability to become employable. Hence I suggest:

    a) supporting industry to create low skill jobs

    b) contraception a condition of long term welfare.

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  19. hinamanu (2,352 comments) says:

    This is how Iceland beat the bankers and politicians and came back to flourish

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  20. SPC (5,619 comments) says:

    First the obvious, the only way to reduce welfare costs without creating more jobs is

    1. to displace single people in work with those supporting children
    2. reduce the number of full-time jobs and have more people reliant on part-time work income
    3. increase poverty amongst those without work and place stress on landlords (unpaid rent), power companies (unpaid bills), food banks and homeless shelters etc

    One question – if an unemployed man with children or a woman on the DPB refuses a job offer – how can they go without a benefit for 13 weeks? In the first case does the woman claim that if her husband has no income (work or benefit) she can claim the DPB for the 13 weeks? In the case of a woman on the DPB – who provides for the children if they have no money for rent, power or food? Or will there be different standards of application of this rule depending on dependents?

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  21. Paulus (2,627 comments) says:

    We should not forget that Labour’s main voters are generally tax dependants, or best called negative taxpayers.

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  22. SPC (5,619 comments) says:

    Paulus – were you reading this article earlier?

    http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=10834849

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  23. Kevin (1,122 comments) says:

    When NZ govt was 25% of GDP we were 3rd in the OECD. Now that they are more than 50% of GDP we are at the bottom of the OECD.

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  24. Black with a Vengeance (1,865 comments) says:

    Wheres the kiwi entrepreneurial spirit ?

    Why arent rich fuckers creating jobs ?

    only industry to benefit from cuts is prisons cos you’ll need more of them to house people when they have no option but crime to survive…

    THE MASTERPLAN ???

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  25. SPC (5,619 comments) says:

    Kevin, the New Zealand government was under 40% of GDP in 2007, what has happened under National?

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  26. Kevin (1,122 comments) says:

    You forgot to count user pays. Labour brought in user pays in the 1980s but niether labour or national got rid of high taxes. Consequantly we’ve been shafted by the worst of both worlds.

    BWAV: crime creates poverty – the idea that it is the other way round is a politically inspired scam.

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  27. Black with a Vengeance (1,865 comments) says:

    Works both ways Kevin…when youre poor you do what you gotta do to survive regardless of the law.

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  28. SPC (5,619 comments) says:

    We certainly got rid of high taxes for some – from 66% top rate to 33% and still no CGT. Maybe it was GST and the user charges that enabled this?

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  29. Viking2 (11,471 comments) says:

    Bob R (750) Says:
    September 18th, 2012 at 12:45 pm

    ***How can someone be twenty-something and still have no decent skills (or a good university degree to make up for lack of real work skills and experience)?***

    @ wat dabney,

    Easy. They do poorly academically, drop out of school, smoke drugs, go on welfare, maybe join a gang. There are a number of people who lack the self control and future planning ability to become employable. Hence I suggest:

    a) supporting industry to create low skill jobs

    b) contraception a condition of long term welfare.

    Its amazes me that there are still some out there like this clown who think that everyone who is unemployed fits this category. without effort I could find you 300 ready and able to work, wanting work if they could find it and that would be without all the young biding time in school.
    Attitudes like this are why we still have a problem.

    apparently jobs come out of thin air.

    8 jobs gone in Matamata in the last few days. Can’t compete in exporting anymore.

    Your turn is coming, either that or you will be financially up against it like so many others. (unless of course you are a union Rep.)

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  30. Viking2 (11,471 comments) says:

    Government wants to ‘believe in’ beneficiaries – Benett

    Tuesday, 18, Sep, 2012 1:30PM

    The Social Development Minister has come out swinging against those who criticise her extensive welfare reforms.

    The latest round of changes will force solo parents back into work and see the seven benefit categories reduced to three.

    Critics say Paula Bennett is attacking beneficiaries, but she’s adamant she wants to help them.

    “I think to ignore them and leave them there for long periods of time, I think that’s picking on them. I say let’s get behind them, back them, and believe in them,” she says.

    Force never works.

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  31. Black with a Vengeance (1,865 comments) says:

    She really is the quintessesntial useful idiot…

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  32. Longknives (4,753 comments) says:

    Look at these photos- Hilarious! There looks to be about six (maybe seven) ‘Rent a Mob’ Protesters expressing the Nations “outrage”..

    http://www.stuff.co.nz/national/politics/7696512/Auckland-protest-over-benefit-plans

    I’d confidently say 90% of New Zealanders who read this article will scream “Get a job” at these druggie losers.

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  33. Bob R (1,375 comments) says:

    @ Viking2 (7,579) Says:

    1. I didn’t say that _all beneficiaries_ were in those categories. I was answering a query why people could reach their 20’s without skills.

    2. I agree more jobs are needed – hence I also suggested government doing more to support local industry and manufacturing.

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  34. rakuraku (162 comments) says:

    Would be great if there were jobs out there however with the proposed layoffs all over the country with our high dollar destroying our export sectors I don’t see many jobs on the horizon.

    John Key and Paula Bennett are deluded if they think there is a truck load of jobs out there.

    It’s difficult to get a job at PaknSave even with a University Degree.

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  35. Kevin (1,122 comments) says:

    If the government left the money with industry that earns it there would be more jobs

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