Judith Collins MP
National Party Welfare Spokeswoman

3 August 2007

Taxpayers’ money squandered on feel-good reforms

National’s Welfare spokeswoman, Judith Collins, has uncovered a Ministry of Social Development multimillion-dollar spend-up which went ahead despite strenuous warnings from Treasury.

“Papers I received under the Official Information Act, show that Phase One of the Working New Zealand reforms, which aimed to improve services and support for beneficiaries, were to have cost $100 million.

“Treasury warned that the $100 million proposal did not offer value for money, and that a significant proportion of the costs would go on benefit administration.

“Concerned officials added that the plan ‘provides no evidence that the core package would deliver savings to justify the scale of these costs’.

“Treasury also noted that although most of the Working New Zealand expenditure will go on services for Sickness and Invalid beneficiaries, MSD is not forecasting any reduction in the growth of Sickness and Invalid numbers.

“The Ministry has not only chosen to ignore Treasury’s advice, but has brazenly, gone ahead and doubled its spend from $100 million to $200 million on this feel-good package, which is not expected to produce any tangible benefits.”

Ms Collins says the abuse of taxpayers’ money borders on obscene, given that the package simply mirrors what Work and Income does already.

“Even former Minister David Benson-Pope, who presided over this debacle, said: ‘I have said that this legislation mandates what is already happening out there’.

“I’m sure the public will agree that $200 million is an awful lot to be spending on something that’s already happening.

“This is absolutely astonishing and yet another example of the Ministry’s ‘we know best’ approach.”

ENDS

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