Friday, January 17, 2014

17,000 fewer on benefits - welfare reform or economic conditions?

According to the Minister:
Latest benefit numbers reveal thousands of New Zealanders have gained financial independence by coming off welfare in the past 12 months, Social Development Minister Paula Bennett says. Figures for the December 2013 quarter released today show over 17,000 fewer people are on benefit compared to December 2012. “This is a significant decrease and proof that the welfare reforms implemented by this Government are making a huge difference for New Zealanders,” Mrs Bennett said.
Yet MSD says:
Main benefit numbers increased substantially between December 2008 and December 2012, though they have fallen from their peak in 2010. The main driver for this pattern has been changes in economic conditions.
I'm inclined to agree that economic conditions are the greater influence.

The categories of benefit changed in July 2013 and the earlier numbers have been adjusted accordingly. I'd like to see the chart go back further to ascertain whether the prior pattern also reflected the economy (in the absence of any meaningful reforms under Labour).

Further from Bennett:

“The decrease includes over 8,000 sole parents who have gone off the benefit, a 9.4 per cent drop compared to the same time last year,” Mrs Bennett says.
Welfare reforms included new obligations for sole parents to be ready and available for part-time work when their youngest child is school-age and full-time work when their youngest turns 14.
“This impressive drop is down to thousands of sole parents seeking a better future for them and their families through work, and also thanks to Work and Income case managers, who are doing a fantastic job offering better, more targeted support than ever before.”

Yes, sole parent beneficiary numbers have dropped by 9.4 percent, but they did this during the 2003-07 period too. So as much as I want the reforms to make a difference, it is probably too soon to tell.

Trends in proportion of the working-age population receiving Domestic Purposes Benefits at the end of December, between 2002 and 2012


HOWEVER there is one factor that would lend support to the Minister's claim which she should probably be drawing attention to.

The number of people who are long-term dependants (over 1 year by this government's definition) has fallen as a percentage of all beneficiaries. At December 2012 the percentage was 70.5% ; at December 2013 the figure was 69.4%. (Those numbers relate only to the current benefit spell). In real terms between Dec 2012 and Dec 2013 there were 15,755 fewer long-term beneficiaries but only 1,471 fewer short-term beneficiaries.

I've also looked at Sept quarter figures because the Dec figures are distorted by an influx of students.

Sept 2012 74.4%
Sept 2013 73.7%

But I'd like to see data relating to those dependent for 4 or more years but those stats are no longer provided.


thor42 said...

The best way to put the "benefit fire" out is to starve it of "fuel" - young people going on welfare. With that in mind, the government has *got* to ban benefit payments to anyone under 20. We *know* that this group is where the long-term benefit-dependents originate from, so it is time that this information was used to *massively* slash benefit numbers.

As well as banning welfare for those under-20, stop welfare for more than 2 children, stop all new applications for the DPB (or whatever it is now). These moves would have *huge* support from taxpayers.

Anonymous said...

Most of them probably died.

Anonymous said...

Baning them doesn't fix it.
what is required is to ensure that they can get work. As long as we have high youth rates it just ain't worth it for an employer. That's a fact
Fix that and the problem will almost dissappear. Its sensless attacking people who cannot fix the problem. It might make you feel good but it doesn't fix it for young people who will then turn to other avenues to get the money they need to survive.
Mnay will do as they have and get srudent loans that then get wasted, others will turn to crime and others will become a bigger burden on the state, with hoplessness and dispair.
It also would have the benefit of actually producing people who knew how to work rather than a bunch of people who have spent near 20 years under the socialist care of the state education sector.