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Welfare reform ‘benefits’ an illusion



Social Development Spokesperson

Welfare reform ‘benefits’ an illusion

Official documents on the financial implications of Paula Bennett’s welfare reforms show that rather than being fiscally beneficial as the Government claims, they come at more cost to tax payers, Labour’s Social Development spokesperson Jacinda Arden says.

The Social Security (Benefit Categories and Work Focus) Amendment Bill is due to have its second reading in Parliament today. It merges old benefit categories into three new ones and introduces failed UK-style work ability checks.

“Finance Minister Bill English said at the beginning of the year that one of his main priorities was to 'bed in' these welfare reforms ‘because that is where by far the biggest fiscal benefits lie’.

“Paula Bennett has also boasted of the cost-saving effects of the reforms, saying forcing people to reapply for the unemployment benefit had already saved $74 million.

“But according to Treasury’s own estimates these so-called ‘fiscally beneficial’ welfare reforms will in fact reduce the Government’s 2014/15 operating balance by $20million.

“Ms Bennett and Mr English might claim that the savings will come down the track, but that’s not a given either, with Government officials admitting improvements in the job market are what’s needed to make a difference to the benefit spend.

“This bill does nothing to create jobs, nothing to help those without the skills and training they need to find work, and nothing for those who need additional assistance through a disability or illness to become work ready.

“In fact, it makes things worse for many people, with anyone on a job seeker category no longer able to be in study or training because they have to be ‘work ready’. That is just stupid if the aim is to move people into sustainable employment.

“This is a short-sighted bill and it will cost us all more than it will save in the longer term.”


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