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Accounting exercise largely tells us what we already know

Social Development Spokesperson
12 September 2012 MEDIA STATEMENT
Accounting exercise largely tells us what we already know

When the Government is prepared to pay an Australian company almost $1 million to tell it what it should already know – that we need jobs and we need to ensure people have the skills and health they need to move into them you have to question its agenda and its priorities, Labour’s Social Development spokesperson Jacinda Ardern says.

Her comments follow the release today of a report by Australian company Taylor Fry on the ‘actuarial valuation’ of the future cost of social security in New Zealand.

“Of course it makes sense to know what the cost of social security is from a budget perspective, and this is a job Treasury and MSD do well. But this is simply an exercise in accounting that takes us no closer to getting people into work.

“Taylor Fry is an Australian company that specialises in valuations for the insurance, aviation and energy sectors. Its report echoes a similar one Paula Bennett tasked her department with just 18 months ago.

“Unsurprisingly both reports find being out of work for any length of time hugely influences future costs, and that the biggest costs are not around the unemployment benefit.

“This is not new information. We know that we need jobs, people to be healthy and well enough to take on work, training opportunities, and to address the barriers for parents moving into employment.

“This is what an active social security system should do, and what we have been calling for. It’s a shame the Minister needed an Australian company to tell her this.

“The Government describes the idea of investing up front - so we don’t have people staying on Government support long term – as ‘taking an investment approach’. I’d call it common sense and the right thing to do.

“But putting a price on something is one thing; what action we take is another.

“The Government is picking and choosing what it wants to quantify the costs of, based on what is the most politically convenient.

“What Ms Bennett isn’t telling us is that superannuation is costing taxpayers twice as much a year as all main benefits combined, yet her Government steadfastly refuses to tackle the future costs of it. The same goes for child poverty which is costing us between $6 billion and $8 billion a year.

“If the government wants to tackle the big future costs, it can’t continue to pick and choose. It also can’t ignore root causes, and on that count its poor economic management is right up there. Exercises in accounting won’t change that,” said Jacinda Ardern


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