Future welfare bill reduced by $7.5 billion

Stuff reports:

Reforms have helped slash the forecast cost of New Zealand’s total welfare bill by $7.5 billion within the past year, a report says. 

The estimated liability of the welfare system is now $69b, down from $76.5b in 2013, according to the latest valuation of the future costs faced by the Ministry of Social Development. 

Based on New Zealand’s current situation – which includes rates of employment, inflation and trends of decreasing welfare dependence – that is forecast to drop a further $5.3b by 2019, according to independent consultants Taylor Fry.

Of the $7.5 billion reduction, $2.2 billion was directly attributed to reforms within the ministry – both legislative and policy changes, as well as operational changes.

That’s great news. Around a third is due to the policy changes that the opposition so vehemently opposed.

The major impact though is from the improving economy and low inflation.