Biggest jump in unemployment benefit numbers since late 1980s

Media Release

BIGGEST JUMP IN UNEMPLOYMENT BENEFIT NUMBERS SINCE LATE 1980s

Wednesday, July 15, 2009

Latest benefit statistics just released by the Ministry of Social Development reveal the second largest rise in unemployment benefit receipt since records have been kept.

"Not since the financial year 1988/89 has New Zealand seen such a large rise in numbers on the unemployment benefit, " welfare commentator Lindsay Mitchell said.

Over the year to June 2009 the numbers rose from 18,000 to 51,000 - a rise of 33,000 or 187 percent. "The only other time such a large rise was recorded was over the period between June 1988 and June 1989 when unemployment numbers jumped by 37,000. "

As well, numbers on the sickness benefit have surpassed 50,000 for the first time ever. "There was a 17 percent jump in sickness benefits from 46,000 to 54,000. Receipt of invalid's benefit grew by another 2 percent to reach 85,000 and the numbers drawing the DPB grew by 8 percent climbing to 104,000."

Overall the total number of people receiving a main benefit increased by 20 percent from 258,000 to 310,000.

"While some of the growth is outside of the government's control there are certainly areas in which some reform or rules tightening could make a difference. The OECD has repeatedly warned New Zealand that benefits are too open-ended in comparison with other member countries. There are no treatment requirements on people receiving invalid or sickness benefits for drug or substance abuse problems; no work-testing on the DPB; no benefit time-limits or reducing payments over time. Yet there are still areas of employment that are experiencing shortages. Childcare and care of the aged are two."

"In the past New Zealand maintained almost full employment with government sponsored work schemes whereby local infrastructure projects were subsidised through payments to local government. While it is infinitely preferable for jobs to be created by the private sector, if National is not going to provide the tax relief and incentives to create these jobs, maybe it is time they started looking at options other than simply handing out money for no productive return."