Welfare and the wasted opportunity

MSD released its annual report for 2022/23 yesterday. There is bad news. The average future years expected on a main benefit has increased yet again.

The crosses below indicate failed direction of trend which is explained with: "This KPI did not meet the direction because of less favourable economic forecasts (including higher unemployment rates), lower exit rates and changes in our client mix from those requiring support during the COVID-19 pandemic."

But hang on. The direction has been wrong since 2017. Here are the figures from last year’s annual report.

Apart from the first nation-wide lockdown the unemployment rate (depicted by the red line below) has generally decreased from 4.9 to 3.6 percent.

Against a backdrop of a mostly strong labour market MSD has overseen a substantial rise in the time people are staying dependent on welfare.

Unlike the previous National government, the Labour government did not set an official target of reducing dependency. Rather MSD measures their ‘success’ in building trust and confidence in clients; in timeliness of access and availability of assistance; in equity of outcomes for Maori; client satisfaction with family violence services; and in building awareness of and access to support.

This ‘kindness’ arose from recommendations by the Cindy Kiro-led Welfare Expert Advisory Group convened by the incoming Ardern government of 2017. MSD would counter criticism claiming that they have generally met their KPIs built around these measures.

But what does the funder of MSD (the productive taxpayer) actually want to see?

Not numbers like these:

What taxpayers want (those of us who voted for change anyway) is a return to welfare for the genuinely needy. For those who have suffered misfortune through no fault of their own and cannot be self-sustaining.

Labour squandered a rare opportunity to significantly reduce welfare dependency. While the borders were closed thousands could have taken up the employment opportunities presented. Instead, numbers on welfare stagnated and the time spent there only got longer.

It is absolutely critical for the new government to turn this around. With an ageing population and declining birth rate (also faced by the other countries we compete with), labour force shortages will continue.

The new government doesn’t need to cut benefits. They just need to require anyone who can work to take the job on offer.

In the long run that would be the far kinder option for all parties concerned.