Fewer on dole but disaster gives public payroll big hit

Paula Bennett. Photo / Supplied

The dole queue shrank by almost 4000 last month - but the Christchurch earthquake threw almost 10 times that number on to the public payroll.

Social Development Minister Paula Bennett said numbers on the unemployment benefit dropped by 3779 to 64,308 at the end of February.

But 39,808 Christchurch workers are being paid by emergency earthquake subsidies - 30,081 through their employers, 6472 as sole traders and 3255 as individuals whose jobs have been destroyed.

Ms Bennett said the Government had paid out $52 million in earthquake job subsidies, almost half of the $120 million budgeted to be paid over six weeks when the scheme was announced last week.

On top of that Work and Income has paid $8.9 million so far in 54,360 civil defence grants for food, clothing and other emergency aid, an average of $163 each.

The earthquake's effects come when the job market was already weak. The seasonal fall in unemployment as students returned to classes last month was slightly less than a drop of 4224 in the same month last year and the dole queue is virtually unchanged from 64,145 a year ago.

Total numbers of working-aged people on welfare benefits fell by just under 10,000 to 344,060, but in the same month last year it fell by 10,816.

The employment website Seek said new jobs listed rose by 2 per cent nationally last month, but dropped by 8.7 per cent in Canterbury.

Even the national increase was less than a 2.9 per cent rise in job applications, so the index of new jobs to applications fell for the first time since September.

The index has inched up only slightly from its bottom in mid-2009 and is still less than half of its pre-recession peak.

Ms Bennett said the country had to be prepared for another rise in benefit numbers because of the earthquake.

But she said Work and Income offices continued to list about 1500 new jobs every week and last month 8000 beneficiaries went off welfare and into work despite the market.