Early start tipped for Australian benefit cut

By VERNON SMALL deputy political editor

Australia could bring forward a new plan to clamp down on welfare entitlements for New Zealanders settling there, after details of the plans leaked late last week.

The Australian cabinet was expected to consider the plan yesterday, and the New Zealand cabinet is likely to approve it next week.

It was originally due to come into force in March, shortly after a visit by Australian Prime Minister John Howard, but it is understood the starting date will be earlier and the measure could even be backdated to the time news of the plan broke.

"It's pretty close," Helen Clark said yesterday.

"Originally, Mr Howard was scheduled to come in February, and it was expected it would be formalised at that time."

She said New Zealand had gone back to first principles and decided that, with the exception of superannuation and the invalid's benefit, it was not the Government's job to pay for those who chose to live outside the country.

However, New Zealand and Australia were keen to preserve their citizens' right to live and work in each other's country. She denied the Australian clamp was a set-back for closer economic relations.

The leaked cabinet briefing papers show that the plan would mean that New Zealanders moving to Australia would have to gain permanent residency to qualify for welfare.

New Zealand pays $169 million each year to Australia for social security costs, but the Australians say the real annual cost is close to $1 billion.

"We think there are better uses at home for the hundreds of millions of dollars that the Australians were seeking to have paid," Helen Clark said.



Australia had this year brought in a two-year stand-down on social security, which would have already had an impact on migration intentions.





New Zealand would not immediately reciprocate the Australian move because it wanted to encourage Australians to come here, Helen Clark said.

New Zealanders already living there will not be affected. According to the papers, they will be "deemed to have permanent residency" when the policy comes into force.

National Party leader Jenny Shipley predicted that New Zealanders considering a move to Australia would try to beat the March deadline.

"Later, it could see only the well-qualified and skilled seeking to move permanently to Australia. That in itself is not good for New Zealand."

The papers said Australia had tentatively estimated that half of the 40,000 people who migrate each year from New Zealand might not qualify for permanent residence.