DPB Holds Back GDP

New Zealand must reform welfare if it wants to lift our GDP per capita rate, said Lindsay Mitchell, petitioner for a parliamentary review of the DPB, commenting on a working paper recently released by Treasury.

"Last month Treasury released a paper about labour force participation and it's effect on GDP. New Zealand women aged 25-34 have particularly low labour force participation rates relative to other OECD countries."

"The paper therefore modelled an increase in labour force participation among this group and found, 'The results suggest that increasing labour force participation of women aged 25-34 to the average, adjusted for Paid Maternal Leave, of the top 5 OECD nations increases employment by 28,800 and generates an additional $1.215 billion of GDP, making GDP 1.0% higher than it actually was in the baseline year 2001.' "

"Ministry of Social Development data showed that in March this year 54 percent or nearly 59,000 of DPB recipients were aged 25-39. Additionally, 68 percent of recipients with children schoolage and older do no paid work."

"The Treasury paper clearly shows that if we can get these parents, mainly women, into work, GDP can be raised. This would not only help close the gap between NZ's GDP per capita and other OECD countries (we currently trail at 20th) but it would improve the lives of these women and their children."

"The report comments, 'GDP has well-known limitations as a measure of well-being. However, some of the factors that drive GDP also have important implications for well-being as it provides social inclusion and protects against poverty. It also has intergenerational effects, and entering employment from welfare can break the cycle of disadvantage and poverty for the worker and his or her children.' "

"If we don't want to keep sliding backwards we must accept, for everybody's sake, that jobs are far better than benefits."

Lindsay Mitchell petitioner for a parliamentary review of the DPB forms available from www.liberalvalues.org.nz e-mail dandl.mitchell@clear.net.nz

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