Tuesday, March 13, 2012

Maxim makes no sense

A Maxim 'Real Issues' newsletter referring to welfare reform says:

Growth in welfare has become an increasingly critical issue in both countries over the last decade, particularly for the UK. While it's the largest area of spending for both countries, it takes up a third of New Zealand's GDP compared to almost half of the UK's. Since 2001, welfare spending has risen by four percent in New Zealand to $21.2 billion. It rose four times as fast in the UK, and now sits at 111 billion pounds (about NZ$213 billion).
If welfare in NZ was taking up a third of our GDP that would be about $56 billion. Goodness knows what half of the UK's GDP is.
Here is a graph from the London School of Economics.

It shows that not just welfare, but  education and health consume about 26 percent of GDP. In NZ the same areas of expenditure consume about 28 percent of GDP (I've used NZ$170 billion).

 Not sure what the Maxim writer is doing here. Perhaps intending to compare percentages of government spending but even then, the claim that in the UK welfare takes up half is quite wrong.


Mark.V. said...

" NZ$170,000 billion" can't be right, that's $170 trillion. Delete those extra zeroes.

Lindsay Mitchell said...

Quite. I'm not making much sense either:-)