I think the logic of National’s benefit changes is that the majority of DPB recipients transition back into paid work after a couple years. So disincentivising beneficiaries from having additional children and compelling them to look for work at certain age markers is about flattening the tail of the distribution shown in this chart, which represents the duration of DPB recipients as a proportion of all DPB recipients, sourced from the MSD fact sheet for Dec 2011.
The Nats are spending $130 million dollars over four years to try and squash down those last two bars. But the graph everyone else is pointing at is this one, also sourced from MSD, which shows unemployment beneficiaries as a percentage of the working age population:
How do you transition 50,000 DPB recipients into work when you currently have 60,000 people on the unemployment benefit? Why spend $130 million setting up state child care and investing in MSD case managers to transition people into work that isn’t there?
National used to have an answer for this. You see how unemployment was really low in 2006-2007? Well that’s about to happen again! Treasury predicted it! So the government would set up this policy to transition DPB (and sickness benefit) recipients into the work force just in time for it to reap the benefits, and save a billion dollars by 2016.
The problem is that Treasury has revised all their rosy forecasts down. Unemployment is now predicted to stay above 5% until 2015.
Bennett’s new answer is that ‘the jobs are there’. If that’s the case, why don’t the unemployment statistics look like they did back in 2007, when the jobs were, actually there? Yeah, there are jobs on TradeMe. If you’re unemployed and a qualified nurse, or a senior java developer – ie working in an industry experiencing a world-wide shortage in which overseas salaries are significantly higher – then the New Zealand labour market would love to hear from you. But only 14% of the jobs currently listed are part time: 1650, and National plans to (somehow) transition tens of thousands of DPB recipients into those roles.
Looks to me as if the government is about to piss away $130 million dollars.