Friday, March 26, 2010

$4.8 billion?

The figure of $4.8 billion for welfare has taken hold over the last few days.

#New Zealand spends about $4.8 billion a year on welfare.

#The figures show 345,000 New Zealanders currently receive either independent youth, unemployment, sickness, invalid or domestic purposes benefit (DPB), and this costs taxpayers $4.8 billion a year.

#The changes, which include study loans for the DPB and additional funds for child care, will cost $88 million to implement in the first four years, but will save just $300m from the $4.8 billion benefit bill over the next decade.

#The Government says 345,000 New Zealanders currently receive a benefit, costing taxpayers $4.8 billion a year.

The total quoted of $4.8 billion covers only the basic benefit rate - not the supplementary assistance like family tax credits, accommodation allowance, disability allowance etc. The following shows that much more than $4.8 billion is spent on working age welfare.



Ball park figure - $6.2 billion

My estimates
$800 million accommodation supplement
$900 million family tax credit
$500 million incomer related rents

Add in student and disability allowances and the total climbs to over $7 billion.
That is the figure I would use for what working-age welfare costs.

(I expect that the lion share of 'other social assistance benefits' is WFF. If you want to label that welfare - and some do - then your'e looking of a welfare bill of approximately $9 billion. Considering the MSD vote is $20 billion that figure makes much more sense than $4.8 billion.)

4 comments:

Anonymous said...

$20 Billion.

And we're currently borrowing, what, just under $500 million per week.

Just under $2 Billion per month.

Or about $20 Billion per year

In other words: NZ has a simple choice. Keep borrowing money (mostly from China) to pay for the dole --- or end welfare dependence, and at a single stroke, end all budget deficits and borrowing. Forever.

Anonymous said...

false dichotomy - another alternative, for example, is to reverse the tax cuts doled out over the last few years.

As soon as we look at the big picture, rather than being blinkered by welfare, the horizons are limitless for back-of-the-envelope hypothesizing.

Lindsay said...

Anon, tax cuts or tax credits?

Anonymous said...

false dichotomy - another alternative, for example, is to reverse the tax cuts doled out over the last few years

Anon, tax cuts or tax credits?

Neither - tax rises.


As soon as we look at the big picture, rather than being blinkered by welfare, the horizons are limitless for back-of-the-envelope hypothesizing.


Not really. It's as soon as we are no longer burdened by welfare that we can begin to hope in NZ once again.