Social Development to get extra NZ$81.5 mln in Budget 2012 towards NZ$290 mln welfare reform package

Social Development to get extra NZ$81.5 mln in Budget 2012 towards NZ$290 mln welfare reform package

The Ministry of Social Development will get an extra NZ$81.5 million in Budget 2012 to go towards the government's welfare reform package.

Finance Minister Bill English is set to reveal another 'zero budget' on May 24 - following the same in 2011 - meaning any increase in spending in the health, education and welfare areas will have to be found from savings from other government departments.

The government had been set to increase its operating spending by NZ$800 million this year. But a lower-than-expected tax take, rising earthquake costs and a subdued global economy led Prime Minister John Key to reveal last month that another zero budget was in order

English subsequently said recent Treasury forecasts showed an expected NZ$370 million government surplus in the 2014/15 year had become a NZ$640 million deficit. The government reaffirmed its commitment to hit the 2014/15 surplus.

Welfare reform

The first phase of the government's welfare reform package, announced in the run-up to the 2011 election, is set to cost NZ$287.5 million over four years. Of those costs, NZ$206 million will be reprioritised from within existing Social Development spending, while the rest would be additional up-front funding, Social Development Minister Paula Bennett said.

A second phase of reforms would be funded in Budget 2013. All up, the welfare package would cost at least NZ$520 million, and save NZ$1 billion over four years, she said.

"Added to the NZ$7.6 billion annual cost of welfare, this extra investment provides support - such as childcare and staff - that is vital to the reforms, Bennett said in a media statement.

"The government's welfare changes require a significant up-front financial support. We've made a commitment to provide that investment to ensure fewer people are on welfare long term," she said.

Spending announced in Budget 2012 would include:

  • NZ$80 million over four years for Early Chinldhood Education childcare and the Guaranteed Childcare Assistance Payment.
  • NZ$55 million over four years for 155 Work and Income staff to support jobseekers and sole parents into work.
  • NZ$148.8 million over four years for youth services.

"Funding for youth services will be targeted at budgeting and parenting courses, milestone payments to providers and wrap-around support as well as an extra incentive payment to young people," Bennett said.

"This also includes NZ$77.6 million to support the roughly 14,000 disengaged 16 and 17-year olds, to move them into education or training," she said.

The Ministry of Education would be sharing information with the Ministry of Social Development to track and pick up these disengaged youth.

Other welfare changes included changes to benefit categories, part-time work expectations for sole parents with children aged over five years, and full-time work expectations for sole parents with children aged over 14 years.

"Expectations will centre on each individual's capacity to work shifting the focus to what people can do - not what they can't do," Bennett said.

"It makes sense to put more resources and support into helping a teen parent with no education than, say, a university graduate who is between jobs," she said.

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How creepy is this getting what a joke NZ is becoming. part of the deal includes long term
contraception to 16-18 year olds. the cause of this mess is high taxes and a growing social welfare system that is now turning on the very people it claims to help. we are watching the unfolding of years of crap the goverment has burdened the tax payers of this country with that is a belief that you get more than you put in.while the youth of this country suffer we let thousands of imigrants into this country,to prop up the flaging housing market. send all our business offshore . we are reaping what we have sowed. we have put our trust in goverment to solve all our needs.
Baz

No, I dont agree,
1) If long term contraception reduces unwanted children which are a burden on certain whining tax payers such as yourself, well that seems a good idea to me. Or are you like GBH who moans from abroad.....
2) Govn spend is actually pretty low...and here is a chart for 2007 for instance to prove it, about 31~32% for NZ, the lowest in that group.
http://krugman.blogs.nytimes.com/2012/05/03/big-government-and-the-crisis/
3) Sowed, sure are, but not in what you mean. We are certainly reaping what we have sowed, we have more inequality than since the Great Depression and arguably that caused or at least contributed to the Great Depression. So here we are again, we have the super rich effectively removing all the profit/gain in the last 2 decades, that impacts real employers and employees....so well you know more ppl on the dole then...because thats what hedge funds etc do destroy jobs etc...they are parasites.  It gets better of course as guess what, here we go again, 30 years of voodooo economics from the rabid right is sending us into a Greater Depression, what we have seen so far in 5 years is nothing....20 years of grief awaits.
4) We put our trust in inept right wing Pollies who made up economic theory as they went along as that suited their outlook and agenda....thats what you get from wearing blinkers....of course the equiv of the left is no better....that was proved in the 70s.
regards
 

Steven, that graph is from 2007, and since then government spending has risen considerably (I believe to about 36% of GDP), as the government continued to expand while the rest of the economy stagnated. 
 
If you take into account local government spending (about 10% of GDP), nearly half of New Zealand's GDP is some form of government spending.  This changes the picture somewhat.  Also, comparing us to the stagnating European economies is misleading - what about the low tax, high growth Asian economies?
 
The budget deficit is massive, and although the left bleat about tax cuts, they only make up a relatively small amount of the deficit, which shows signs of becoming structural due to the unaffordable election bribes put in place by Labour and kept by National. 
 
However, the biggest risk for future government finances is the NZ Super system, which John Key is determinedly ignoring.  At some point people will learn they can't live perpetually at others' expense.  The only question is whether they make that decision themselves or the bond "vigilantes" do it for them.

On TV last night they quoted the $80m over four years as being applicable to 1200 beneficiaries. If true that's more than $16000 per year each. 
And the 155 new support people are going to cost more than $88000 each. That's almost double the average degree holders starting wage. 
I guess I must be missing something.

Steven I am not a whining tax payer. I take offence at that, you like many others on this site write far to much and are so right never wrong.I dont support the left or right side . social welfare is the biggest ponzi scheme ever layed out in history . As far as super goes the goverment should pay out to those who they have stolen from. the goverment doesent have money they take yours and mine .
Baz

Good on you redcows
Baz

if you are on the dpb with one child here is a disincencentive to having anymore.
DO NOT INCREASE THE BENIFIT NO MATTER HOW MANY KIDS YOU HAVE
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