Tuesday, December 15, 2009

Welfare spending - the only significant forecast growth area

Here are the forecasts from the Half Year Economic Fiscal Update.

Depressing.

Population growth is estimated at 5.3 percent by 2014.

Note very little extra spending is forecast in health (8.4 percent), education (3.5%) or law and order (7.3%) for the next 6 years, yet welfare is going up by 26.9 percent.



OK, a good part of the additional spending is Super (putting up the qualifying age could reduce that substantially) but so are Sickness (33%), Invalid (18%) Domestic Purpose's Benefits (26%) and accommodation supplement (31%).



As a portion of total Core Crown Expenses welfare will rise from 30.2 to 32.2 percent.

This country's attitude towards welfare, as personified by Treasury and the government, seems utterly defeatist.

3 comments:

Anonymous said...


OK, a good part of the additional spending is Super (putting up the qualifying age could reduce that substantially


BY 2014? Really Lindsay?

yes I agree - we should tell people who are 59 or 55 now that they won't get any super til they're 70!

But I don't think many other people will agree.

Actually I'd zero all super for everbody, overnight.
And the DPB too. But I know you don't support real reform. So I'm surprised you'd move so fast on super but not e.g. the DPB

Lindsay said...

Fair comment re timing. It does take ridiculous lengths of time to achieve any sort of legislative change. I may not support the sort of reform you want but compared to most voters and politicians, my proposals are radical. Or what does Key call my suggestions - draconian.

Anonymous said...

It does take ridiculous lengths of time to achieve any sort of legislative change.

That's not the issue. As you know, an order in council to zero all benefits could be draft this afternoon and in place by monday.

The issue - as I understand it - is that your policies for super don't involve "zeroing" existing beneficiaries, and they only involve raising the age of eligibility slowly, so that people of 55 say, have "time to plan". But that allowance means that no change can take effect until 2019 at the earliest - and even that would be a very slow change.

"reducing that substantially" must involve zeroing benefits now. Delaying eligibility for the super, grandfathering current DPB recipients may be far or make for good soundbites. But it greatly delays any "savings".