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Q+A: Shane Taurima Interviews Paula Bennett

Sunday 29th April, 2012
Shane Taurima Interviews Paula Bennett
Social Development Minister Paula Bennett admits it’s hard for young people to find work. “We’re most certainly seeing more young people having a hard time finding work, without a doubt.”
Minister says there’s not a job for everyone that would want one right now.
She’s not proud of the 20% rise in the number of young people not in employment, education or training (NEET’s) but “I’m really proud of my record to date of what I’ve done”
Bennett: Things would be significantly worse if we hadn’t made the changes we did.
On why it’s been hard for young people to get jobs: They’re the ones employers are less likely to take on when things start getting tighter, and that, without a doubt, is what we’ve seen.
On the 83,000 young people not in employment, education or training (NEET’s): Bennett would argue there’d be 20,000 more in that category had it not been for the Government’s work over the last three years.
Minister expects the 83,000 NEET’s to drop over the next 12 months.
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                        Thank you, Minister, for joining us. 83,000 young people aged between 15-24 not in education, employment or training. Now, that’s roughly the population of Palmerston North doing nothing What are you doing about it?
PAULA BENNETT – Social Development Minister
                                    Yeah, a lot. So when you look at the past three years and the youth package that we’ve put in there, you see nearly 20,000 young people involved in Community Max or Job Ops programmes. Results from them have been really significant and better than we thought they would be, to be quite frank. We’ve seen more investment going in. We’re seeing this next step of reforms that are going to be focussing on them more. We’re seeing the unemployment rate of benefit go down, so we sort of peaked in January 2010, 23,500 young people 18-24 on benefit. We’re now at about 15,500.
SHANE          So you’re saying you’re doing a lot. But the numbers have gone up, minister. It’s increased by 20% since you took office.
PAULA          Well, we’ve been in the worst recession ever, and the facts are that unfortunately it’s our young people that are always hit hardest by a recession.
SHANE          And it’s interesting that you raised the recession, because every time you’re on Q&A and we’ve asked you questions like these, you’ve blamed the recession, and yet the recession ended back in 2009. Three and a half years later, we’ve got 83,000 young people doing nothing.
PAULA          Yeah, but what we did see was the effects of that continue, and particularly for young people. When I became the minister in late 2008, we’d had three quarters where that had gone up, and that continued because there were fewer jobs. There’s just no debating that. So fewer jobs, fewer opportunities. So now we are taking a completely new focus with these reforms that are coming up as to how we do tackle that.
SHANE          Is that the reason for the rise? Fewer jobs?
PAULA          Most certainly.
SHANE          20%. Because as I said, since you’ve been minister, 20% it’s gone up. That’s why we’re looking at the population of Palmerston North doing nothing.
PAULA          Yeah. We’re most certainly seeing more young people having a hard time finding work, without a doubt. We’ve seen more go into training, and that’s been the effects of that recession. I mean, I just can’t-
SHANE          Is it not your responsibility, though?
PAULA          Young people are my responsibility, particularly those that are struggling and in the welfare system and those that are not in education, employment and training, and I’m really proud of my record to date of what I’ve done, but, boy, am I-
SHANE          Are you proud of the 20% increase, though?
PAULA          Of course I’m not, but I actually- It’s business that makes those jobs out there. We’ve been supporting them. We’ve seen that the number of youth unemployed come down.
SHANE          So you’re not proud of the 20% increase, but you are proud. What are you proud of when we’ve got 83,000 young people doing nothing?
PAULA          Yeah. Well, let’s keep it in perspective. Between 2004 and 2008 we had anywhere between 10% and 12% of young people not in education, employment or training. We currently have 13%. So in the best of times that we saw in that time, we still had these young people not connected to either training or the workforce. So we have had to turn around and try and stem that tide of young people not achieving, and we have, against all the odds, actually managed to do that, even though we’ve seen that-
SHANE          But you haven’t turned it around, Minister, have you? Because my point again, I go back to it - 20%, since you’ve been minister, it’s gone up. You’ve got more people doing absolutely nothing under your watch. You haven’t turned it around.
PAULA          Well, I would argue to you that it would be significantly worse if we had not made the changes that we did and put the focus on those young people. And I just need to give you statistics like 20,000 that have been through Job Ops and Community Max. For Job Ops alone, 17,000 of them went through that. 92% of them went into work.
SHANE          But obviously it’s not enough, though, is it, because it’s gone up 20% over the last, what, three and a half years, and in the last year itself it’s gone up by 5%.
PAULA          That depends at what you’re looking at.
SHANE          I’m looking at the 83,000. 83,000 young people who are not in education, employment or training. Roughly the size, the population of Palmerston North. It’s criminal.
PAULA          So let’s go back to those-
SHANE                      It’s criminal, isn’t it?
PAULA          I’m not going to get a bit emotive like you are at the moment. So let’s go to 16- or 17-year-olds-
SHANE                      But those are the facts, though.
PAULA          Well, we do need to deal with the facts. So you get these 16-and 17-year-olds, of which we have anywhere between 10,000 and 14,000 that are not in education, employment and training, and I can tell you it’s been pretty much the same numbers for the last 15 years.
SHANE          Can I go back to the 83,000, cos that’s what I’m focussing on.
PAULA          Yeah, but you’ve gotta get to the beginning, Shane. So this is- I think you’re right-
SHANE          Yeah, but I want to go to the 83,000, and I want to know, when can we expect to see that figure coming down?
PAULA          Well, this is what part of the reforms are.
SHANE          But when?
PAULA          So if you let me explain-
SHANE          Can you answer that question, though? When?
PAULA          Well, let me explain, because this is exactly the sort of point, cos you’ve gotta look at who they are-
SHANE          But when, though, Minister? When can we start to see the 83,000 come down?
PAULA          Yeah, well, I think that you’re already seeing fewer on unemployment benefit-
SHANE          But we’re not seeing that go down, though, Minister. We’re seeing it go up.
PAULA          We are seeing the unemployment benefit go down.
SHANE          No, the 83,000 young people doing nothing. When can we expect to see that go down?
PAULA          Yeah, well, I think we’re already seeing the unemployment benefit-
SHANE          83,000, though, Minister, that’s the figure we’re concentrating on. Not the unemployment benefit. Those who are doing nothing. When can we expect to see that figure drop?
PAULA          Yeah, well, you’re already seeing it with the youth guarantee that’s gone in, so-
SHANE          But we’re not seeing that figure drop, though, Minister. When will we start to see- Please, with respect, when can we start to see that figure go down? Because that’s the concern - 83,000 people doing nothing. When can we start to see that number coming down? It’s a fairly straight-forward question.
PAULA          Yeah, it is, and I’m just going to explain to you what we’re doing, how long those reforms will take to get in, what we’ve been doing in the past and the successes that we’ve been having. And I just think that you would see significantly more young people if we weren’t having the kind of initiatives that we do. You know, young people are disproportionately affected when a recession hits. They haven’t got the experience. They’re the ones that employers are less likely to take on when things start getting tighter, and that, without a doubt, is what we’ve seen. So we have to try and make these young people valuable, hence doing something like Job Ops, which puts a $5000 work subsidy around those young people. I would argue to you, Shane, that you would have 20,000 more that are NEET if it was not for what this government has done in supporting those young people over the last three years.
SHANE          So going back to the 83,000, will it be down in, say, 12 months’ time? Will we see that figure drop?
PAULA          Yeah, we certainly expect it to drop, particularly with the changes that we are making. But let’s talk about the reforms, because I think this is what’s-
SHANE          The 83,000, though, because I’ve given you quite a bit of time to talk about those reforms, and I want to go back to my initial question, which is when will we start to see these drop? You say in 12 months’ time we’ll see it drop. By how much, please?
PAULA          Yeah, look, I’m not prepared to do that, so what you need to listen to-
SHANE          Because?
PAULA          Because you need to look at the 16- and 17-year-olds and for the very first time our focus is keenly going on them. So what we had to do was look at the benefit system and say who is going on benefit when they turn 18? You have around 14,000 16- and 17-year-olds that are not in education or employment or training. 90% of them will go on benefit when they turn 18. So we are putting significantly more money on them. We’ve just gone through a request for proposal from those youth services-
SHANE          Because you want to get them into work?
PAULA          Or training, or education. So if we get them engaged, if we give them the right skills and the right training, if we see a lift in the economy and those jobs coming on as we are slowly starting to see and it’s making a difference, then, yes, we will bring those numbers down.
SHANE          Can I ask you about work, though? Do you think that there is a job out there for all these young people who really really want a job? Is there a job out there for young people who really want a job?
PAULA          No. There’s not a job for everyone that would want one right now, or else we wouldn’t have the unemployment figures that we do.
SHANE          And so who’s to blame for that? Does that mean that there’s not enough jobs?
PAULA          Well, sure. Of course there’s not enough jobs right now for everybody that wants them. But we also see significant areas where there are, and young people are not connected properly. So, for example, I was in Dargaville on Friday. I had a whole bunch of employers that were saying, ‘We have jobs. We’re not taking on young people. Why aren’t we taking them on? It’s because they haven’t got the kind of training that we need. It’s because we see them as high risk.’ So then as Minister I turn around and say, well, how can I make them less risky, if you like. How can I put that pre-employment training in? How can I give you the kind of support that means those young people will turn up for those jobs? And that’s the reforms that we’re putting through.
SHANE          So if there aren’t enough jobs there, is it your responsibility to create those jobs?
PAULA          Well, we have in some aspects, as far as putting the subsidies next to young people that makes them- But the only way a kid in West Auckland is going to get a job tomorrow is if a business decides to employ them, yeah?
SHANE          What about the government, though? Does the government have a responsibility to create jobs, to ensure that there are jobs for these young people?
PAULA          We have a responsibility to support businesses and get them in the right place so that they will take on these young people. Now, should we be giving them more support up front, making sure that they have got the right kind of skills and training and are able to get into them, and that they’re seen as an asset to that business? Absolutely. But, actually, government creating jobs, as they try to do in the 2000s, has not worked for these young people, because when things got tough, they fell out.
SHANE          Is that because the government isn’t creating any new employment? Because it hasn’t worked?
PAULA          That’s not true. We are supporting businesses whom are creating jobs. And in the last year alone, I have seen the unemployment benefit decrease by about 18,000 people. That says that we have more jobs now than we did a year ago, more people going into them. We have a real job to get these young people-
SHANE          So the unemployment figures may have dropped, but at the end of the day, those who are doing nothing, young people who are doing nothing, absolutely nothing, has gone up.
PAULA          Yep, so what you’ve seen is the real effects of them dropping out of school, yeah, too soon, so not coming out with the right kind of educational attainment. So we have made significant changes there, but there are more to be done. Then what we need to do is pick them up straight away. So what happens at the moment and has happened in the past is that those young people there, um, the education system doesn’t have to tell us when they’ve dropped out of school in real time. We lose them. The longer they are disengaged, the more likely they are to stay disengaged for longer periods of time.
SHANE          These reforms that are targeting our young people. Can you tell me- Because you’ve said that you want to save, roughly, a billion dollars over the next four years with these welfare reforms. How much of that one billion is going to be as a result of these reforms targeting young people?
PAULA          Well, we’re going to spend more on them, OK, so we’re also spending $130 million extra a year at least. So we’re actually going to spend more on these young people. What you’ve gotta look at, Shane, is they won’t be on benefit over a longer period of time because of-
SHANE          So over the next four years, if you’re spending more, then you won’t be saving anything?
PAULA          But the billion dollars is not just about the young people. Those savings are also coming from those on other benefits-
SHANE          So that would then suggest that you’re not going to save any money over the next four years as a result of these reforms.
PAULA          No, we certainly have got projections that we believe we will be making savings over the next four years.
SHANE          How much as a result of these targets for young people?
PAULA          Well, it’s a combination of young people and all of the suite of reforms-
SHANE          But you can’t tell us specifics around young people?
PAULA          No, I can’t give you that exact number off the top of my head, but a billion dollars over four years but spending $130+ million more in supporting them up front. It makes sense.
SHANE          Let’s look at the breakdown of the current welfare spend. If we take, for example, the unemployment benefit, it makes up roughly 4.4% of the current spend. DPB makes up 8.2%. Minister, we both know what the biggest single item is - super. Super makes up a whopping 41.3% of the welfare bill. Why are you refusing to look at super when it is far and away the biggest cost of the welfare state?
PAULA          Because actually it’s about- I don’t see super as a welfare benefit, I see it actually as a right of New Zealanders that have done it. And so we’re not looking at super, but we are looking at the welfare bill itself, which is-
SHANE          So take for example the unemployment benefit. Is that not a right?
PAULA          Well, it is if you’re out of work, but we need to put the right kind of services around those people to see them getting into work.
SHANE          So the unemployment benefit is a right. Super is a right. You’re prepared to change the unemployment benefit but not super.
PAULA          That’s right.
SHANE          Because?
PAULA          Because we’re focussing on those people that could and should be in work, and that’s exactly where New Zealanders would expect it to be. So superannuation is for those over 65, as you well know, that have got-
SHANE          Do you think 65-year-olds, as an example, should be in work?
PAULA          I think some are and some aren’t and that’s their choice.
SHANE          But do you think they should be in work?
PAULA          This is a great country. I think some should be and some shouldn’t be. It should be their choice.
SHANE          Can I just say, because if you were to raise the super age from 65, which it is currently, to 67, you would save $1.5 billion a year. That’s more than the savings you hope to make with all of these reforms over the next four years.
PAULA          So what I think you’re missing, Shane, is the equation of-
SHANE          No, let’s go back to the savings, though, Minister. $1.5 billion that you would save.
PAULA          You’re comparing a 65- or 66-year-old to an 18- or 19-year-old that’s out of work, and I would say to you that they are completely different. So someone that’s 66 and not in work and is on super, actually they’re doing probably OK in life.
SHANE          Well, I’m actually comparing them with a 64-year-old and a 63-year-old and 62-year-old too, aren’t I?
PAULA          Well, should we be looking at those young ones that actually need our support and should be and could be in work and put our support around them? That’s where I’m focussing on. So yes, some of it will be monetary savings, but that’s not what I’m focussed on. It is the loss of opportunity, the loss of hope, and I just think young people going on to benefit early is absolutely wrong, and the more we can turn that around, that’s where our focus should be. So will we make savings? Yes, and that’s kind of an add-on to it, but it’s actually the social cost of seeing too many people on benefit over long periods of time that is actually what is driving us to make these changes.
SHANE          So when are we going to see some results, though, Minister? When will we see the reduction in these numbers? Go back to the 83,000 figure. 83,000 young people doing absolutely nothing. When will we start to see results? When?
PAULA          Yeah. So what you see is those that are on the unemployment benefit-
SHANE          When will we start to see results?
PAULA          They’re the ones that are the hardest hit, yeah? We are already seeing results for them.
SHANE          We’re not seeing results-
PAULA          We are. We have fewer-
SHANE          We are not seeing fewer people doing nothing, Minister.
PAULA          We are actually seeing more young people in work now than there were two years ago, and that, Shane, is a fact.
SHANE          And let’s end it there. Paula Bennett, Minister, thank you very much for your time this morning.
PAULA          Thank you.

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