Thursday, June 25, 2009

Using the recession as an excuse

There are now 302,000 working-age people on benefits. According to a report on TV3 last night, the Minister, Paula Bennett, told a select committee yesterday that unemployment benefit numbers had climbed to 45,000.

So fewer than one in six people on a benefit is on the dole.

A the end of March the overall total was 288,959. So now there are at least 13,041 more beneficiaries. But the rise in unemployment - from 37,146 to 45,000 - is just 7,854.

As I have commented before, the numbers on all benefits will swell alongside the growth in unemployment benefit numbers. That is why using the dole queue as a measure of unemployment is faulty.

But more importantly, it is much harder to get people off the other benefits once they are on them. Letting the numbers on sickness and invalid, and especially the domestic purposes benefit swell, will prolong the effects of this recession.

Unfortunately politicians can use the recession as a cover or an excuse for continuing bad policy that can be summed up as overly easy access, too little pressure to regain independence and inverted incentives, ie greater incentive to do the wrong thing rather than the right thing.

2 comments:

Anonymous said...

Speaking of incentives to do the right thing; here is an interesting example of that related to the Aboriginal interventions in the Northern Territory of Australia

http://www.cis.org.au/executive_highlights/EH2009/eh84509.html

Karen

Lindsay said...

Karen, What govt has done in the Aboriginal communities is an improvement on what was. But these communities still survive primarily on welfare. If the children are now getting an education, better values, stability, expectations; are being equipped for independence in the wider world because of the benefit quarantining, GOOD. But the current set-up must be seen as an interim measure.

The same applies to Maori groups here eyeing up similar possibilities.