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Benefit Demand Set To Increase Significantly

29 April 2001

Social Services Minister Steve Maharey promised to find New Zealanders real jobs, but all he's delivering is growing demand for welfare," National's Social Services spokesperson Bob Simcock said today.

The Government's ever increasing welfare budget is spiralling out of control with expenditure on the Disability Allowance, the Invalids Benefit and the Unemployment Benefit having been revised upwards by more than $206 million.

"These revisions highlight Labour and the Alliance's fiscal incompetence and lack of faith in their own policies to deliver jobs. They clearly haven't got a firm handle on welfare expenditure and it only looks set to get much worse."

The Minister of Finance admitted this blow-out after written questions from Bob Simcock asking what specific advice Dr Cullen received from his officials regarding key allowances, grants and benefit numbers and costs in the 2000 December Economic and Fiscal Update (DEFU).

Citing a 'greater than expected take-up by Invalids Benefit and Domestic Purposes Benefit recipients,' Dr Cullen said the Disability Allowance has been revised upwards by $45.9 million over four years.

The Invalids Benefit has been revised upwards by $78.8 million over four years. Dr Cullen said 'The 2000 DEFU forecast assumes an annual average of around 57,900 recipients in 2000/01 rising to 72,300 by 2004/05'.

Dr Cullen said the 'Unemployment expenditure has been revised upwards by $81.5 million over four years due to lower than expected growth up to December 2001'.

'Expenditure on Special Needs Grant has been revised upwards over four years,' but the Minister hasn't quantified the increase. Likewise he anticipates 'that there is greater than expected take-up of Disability Allowance by Domestic Purpose Benefit recipients.'

"Official forecasts confirm what many already suspected: this Government is growing welfare, not jobs," Mr Simcock said.


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