Editorial: Unemployment down yet dole numbers are up

Rise in number of the dole may reflect less enforcement of its requirements. Photo / Getty Images

COMMENT: Just as the Prime Minister was celebrating a drop in unemployment on figures released this week, she was obliged to explain an increase in the number on the dole.

Unemployment dropped to 3.9 per cent as at September last year, the lowest level since 2018. It achieved the Labour Party's pre-election target to get unemployment below 4 per cent, although that was not likely to be hard as long as the economy continued to grow. Unemployment has been on a steady decline since mid-2000.

Why, then, has the number on the dole now risen? Because the Government was trying to ensure everyone entitled to it was receiving it, Jacinda Ardern explained. Is that the real reason? Or is it that this Government is far more relaxed than the last about whether the unemployed are meeting the terms of the entitlement?

To qualify for the benefit, unemployed people are supposed to be actively looking for work or preparing for a job and accept a job if one is offered to them. Ardern said this week, "Of course we want people in work, but if they can't find work or are unable to work, they should be able to access the benefit."

If they are unable to work they should be on a sickness or disability benefit. That indeed is what usually happens when a government puts strict requirements on dole seekers to be ready and willing to work. A rise in sickness beneficiaries often accompanies a fall in dole numbers but the exercise is not pointless. It is important that benefits exist for their stated purpose and that entitlements —including for sickness and disability support — are properly tested.

When National named the dole "jobseeker support" in 2013 the benefit was being paid to 4.8 per cent of the working age population. The number declined to 4.2 per cent by the end of 2017. But last year it rose, to 4.5 per cent. The reversal is not high but it should not be happening when so many industries have vacancies and are struggling to find suitable workers.

The Greens went to the last election with a policy of welfare virtually on request with no questions asked. In their post-election agreement with Labour they were promised an "overhaul" of the welfare system to "remove excessive sanctions". Last June the Minister for Social Development, Carmel Sepuloni, announced the overhaul was under way and welcomed figures showing the number of benefits being suspended or cancelled each day was dropping from just over 100 to 80.

Some refinement of the rules is needed, as evidenced by our report on Wednesday that ACC payments are abated by that value of the benefit when a beneficiary is injured in part time work. But without waiting for the overhaul, the Government last year gave a directive to Work and Income NZ that any decision to suspend a benefit had to be approved by a second person at a senior level.

Sanctions can be informally lightened in this way with no need to put anything in writing. Senior officials get the message. But if this rise in dole recipients continues, taxpayers will have questions to ask.