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.
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.