Unemployment is an experience none of us want to have. Photo / Getty Images
New Zealand’s safety net costs billions of dollars every year.
Speaking to The Front Page podcast, NZ Herald deputy political editor Thomas Coughlan says that this doesn’t come cheap.
“It changes year on year, depending on whether you’re in a time of high unemployment or low unemployment,” says Coughlan.
“This year, for example, the Jobseeker payment is $3.5 billion, the supported living payment is $2.3b, and the sole parent support is $1.9b. We’ve also got an enormous benefit for people who retire, which also goes through the benefits line of the budget, and this is, of course, superannuation, which costs $19.5b.”
On top of these main forms of benefit, there are also secondary and tertiary benefits.
“This includes the accommodation supplement to help people on a benefit with their living costs. And then there are also tax credits, like working for families, which can also be considered benefits in that they help low-income families to raise their children.”
In the lead-up to this election, politicians have again been divided on this issue.
National’s plan would see hundreds of thousands of people miss out on payments worth more than $50 a week by the end of the decade, while the Greens are looking to increase benefit payments to give families more stability.
Act has also weighed in, saying it wants to change the rules to encourage more people off work due to drug addiction or sickness to get back into the workforce.
“Both Act and National are pushing harder on benefit sanctions,” says Coughlan.
“The idea is that if you break rules on a benefit then you get it withdrawn or get certain sanctions applied to you.”
Coughlan explains that life for people on the benefit is already worse than not being on benefit, so they already have an incentive to return to the workforce. But the recent uptick in the number of people on the benefit is cause for concern.
“If you drill down into the number of people on a benefit, there are 350,000 people on a main benefit at the moment. Of those 350,000, 170,000 are on a Jobseeker benefit... The point National and Act make is that there are a large number of people who are on a Jobseeker benefit, and that number has grown since Labour came into Government. It was 122,000 in 2018 and it’s 173,000 now. It increased dramatically during Covid and it hasn’t come down massively.”
That does signify a large increase in cost, but it still remains a fraction of the massive amount we put into superannuation every year (and that figure is also growing as the population ages).
So what are the different parties offering in response? Why aren’t they as eager to change the rules of superannuation? And what do studies show about the best way to support families when times get tough?
Listen to the full episode of The Front Page podcast to hear a comprehensive explanation of New Zealand’s benefit system and how our politicians believe it should change.
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. It is presented by Damien Venuto, an Auckland-based journalist with a background in business reporting who joined the Herald in 2017.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts.
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