The new Government says benefit numbers released today “paint a grim picture” of Labour’s economic mismanagement and a “culture of benefit dependency”.
Labour says National is being misleading with the data.
A beneficiary advocate says the Government needs to take population growth, the impact of Covid-19 and increases in the cost of living into account.
Over a 10-year period, data examined by 1News shows beneficiary numbers for those ready to work rose about 0.7% over Labour’s time in power, while dropping 0.3% over the last five years of the previous National Government.
The Ministry of Social Development today released its December 2023 quarter benefit snapshot, which reveals the latest statistics on beneficiaries.
Minister of Social Development Louise Upston said the fact that there were now almost 67,000 more people receiving Jobseeker support than in December 2017 showed Labour’s legacy was a “culture of benefit dependency”.
She said that despite widespread workforce shortages, the previous government’s policies resulted in more than 189,700 people reliant on Jobseeker support, up almost 19,700 in a year.
“Labour was either unable, or unwilling, to get people off welfare and into work. As a result, we’re already close to MSD’s forecast of Jobseeker Support numbers hitting 198,500 in January 2025.”
The figures included both categories of Jobseeker benefits — “Work Ready” and “Health Condition or Disability”.
Upston said National’s “Welfare that Works” policy would fix the situation by using community providers to give young job seekers a job coach, a plan to address their barriers to employment, and a proper needs assessment to help them find suitable work.
The policy also included “traffic light system”, which would introduce sanctions to beneficiaries if they did not meet their obligations — something the party signalled as part of its election campaign.
“The coalition Government has already begun delivering for job seekers by indexing main benefits to inflation from April 1, to keep up with rising costs, and extending the availability of 90-day trials, giving all businesses the confidence to take a chance on new employees,” Upston said.
“This Government believes people are better off in employment, both financially and socially. For those who can work, it is the best way out of hardship.”
Upston said the Government would be “relentlessly focused” on getting unemployed people into suitable work — providing them with greater independence, choice and opportunity to get ahead.
Labour’s social development spokesperson — and Upston’s predecessor in the role — Carmel Sepuloni said this was “trash talk” from National, and it showed the party “continues to misrepresent context of figures, making excuses for their intent to take the welfare system backwards”.
She said Upston’s interpretation was “clickbait information” that painted an “oversimplified and wrong picture”.
“Louise Upston is feigning ignorance over the differences between those who are on Jobseeker Support-Work Ready in contrast to Jobseeker Support-Health and Disability.
“Out of the 189,000 on Jobseeker benefit that the Minister referred to, 80,100 are supported by Jobseeker Support-Health and Disability. Getting a foot in the door to work isn’t always easy and holding down a job can be difficult when health and disability are taken into consideration.”
Sepuloni said the working age population had also increased by 400,000 since 2017.
“This means that comparing raw numbers of beneficiaries now to 2017 is not straightforward. National are already continuing to fudge the numbers for tax cuts and can’t be trusted.”
Sepuloni said more people were supported off benefits into employment under the previous Labour Government “than ever before”.
“That wasn’t by accident.
“Labour invested in more ring-fenced funding for work-focused case management; increased the abatement threshold so that people could work more hours without losing their benefit; invested heavily in to supporting beneficiaries to get the driver’s licenses they needed to work; and reinstated the training incentive allowance so that sole parents, disabled people and carers could access up higher-level tertiary qualifications whilst on a benefit.”
Sepuloni said indexing benefits to inflation instead of wage growth would help fund tax cuts but it meant “less money in the pockets of the poorest New Zealanders” during a cost of living crisis.
“Wage growth almost always outstrips inflation growth and is forecast to do so again this year.
“Given the new Minister of Social Development can’t be upfront up front with all of the facts and the true implications of her own change agenda — her attack on the previous government seriously lacks any credibility.”
The Government has said it expects inflation will be higher than wage growth when benefits are adjusted this year, meaning people on main benefits will receive more money in 2024 than they would have if benefits remained indexed to wage growth.
Finance Minster Nicola Willis said in her mini-Budget announcement in December that “this change will protect the real incomes of benefit recipients while putting the benefit system on a more sustainable footing”.
Fairer Future coalition spokesperson Vanessa Cole said Upston’s comments showed the National-led Government had “a lot to learn” about people needing income support when it complained of benefit recipient increases while not acknowledging population growth, the impact of Covid-19 and increases in the cost of living.
The Fairer Future group is a collaboration of smaller groups such as Auckland Action Against Poverty, Barnados, Auckland City Mission, Workers First Union, the Public Service Association and ActionStation, of which Cole is part.
“It’s sickening and self-serving for the Government to scapegoat people with financial and medical needs who are accessing income support, when the Government is implementing policies — like scrapping Fair Pay Agreements and expanding 90 day trials — that will kick more people out of work and make people poorer.”
The Government has previously said it believes those moves will benefit workers, such as small businesses being more willing to take a risk on taking on more staff without the possibility of lengthy dismissal processes.
Cole said the traffic light sanction system and indexing benefits to inflation would “line the pockets of landlords” by funding things such as interest deductibility — and was “just a tired reheat of the previous National government’s approach to welfare”.
“That didn’t work and made life worse for people with the greatest financial, medical, and social needs, who should be able to count on income support.”
What does the data say?
1News took a look at Jobseeker numbers over a 10 year period — from 2013 to 2023.
That covers most of the last five years the former National Government was in power (2013-17), and six years of the former Labour Government (2018-23).
Jobseeker benefits have two categories — “Work Ready” and those for people with health issues or disabilities.
We separated those two categories, as well as combining them.
For Jobseeker numbers overall for the 2023 (as reported in the December quarter), it was 4.5% of the working age population (this is a number reported by Statistics New Zealand).
For those on Work Ready Jobseeker benefits, it was 2.6% of the population.
For those on Health and Disability Jobseeker benefits, it was 1.9%.
The average over 10 years was:
- All Jobseekers: 4.2%
- Work Ready: 2.4%
- Health and Disability: 1.8%
From 2013 to 2017, Work Ready Jobseekers were 2% of the working age population at their highest (2013) and 1.7% at their lowest, in 2017.
From 2018 to 2023, Work Ready Jobseekers hit their highest with the latest data — 2023, although that was .01% lower than in 2021, and it rounded to the same 2.6%. At its highest, it was 3.3% in 2020.