Newman wrong

Act MP Muriel Newman has got her sums wrong with claims the December Economic and Fiscal Update (DEFU) is predicting beneficiary numbers and expenditure to increase, says Social Services and Employment Minister Steve Maharey.

In fact the DEFU continues to show a reduction in the numbers of beneficiaries expected on the main benefit types. The following table tracks Treasury projections in June 2000, May 2002 and December 2002 Economic and Fiscal Updates of the number of people expected on benefits, by benefit types, for the years ahead. It shows that for the two main benefit types – the domestic purposes benefit and the unemployment benefit – Treasury has lowered its expectation of the numbers predicted on those benefits over successive projections.

Notes:

the unemployment and sickness benefit totals have been combined to show a consistent data set as they were combined together as the Community Wage in the 2000 DEFU.

BEFU 00 = 2000 Budget Economic and Fiscal Update; BEFU 02 = 2002 Budget Economic and Fiscal Update; DEFU 02 = 2002 December Economic and Fiscal Update.

Responding to Mrs Newman’s other points, Steve Maharey said:

growth in projected welfare expenditure is to be expected as benefits are adjusted annually in line with the Consumer Price Index (CPI) and projected increases are included in the expenditure forecasts; and

growth in Special Benefit expenditure partly reflects administrative improvements introduced to ensure it is administered properly and issues with second tier assistance (for example the Accomodation Supplement and Family Support) which underscore the need for the reform to what has become a complex benefit system. The government has already signalled it is working on this.

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