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Social Development to find $200m savings

Published: 4:42PM Monday May 07, 2012 Source: ONE News

The Government is pledging $287.5 million over the next four years to get more beneficiaries into the workforce.

However, the Ministry of Social Development is expected to find at least $200 million from savings in other areas to implement the Government's controversial welfare reform changes.

The Government announced reforms to the welfare system in March, claiming it would help 30,000 beneficiaries re-join the workforce.

Today, it says the Budget will provide $287.5 million over the next four years to implement the first phase of the controversial reforms.

Social Development will get a fresh injection of $81.5 million in the Budget, but the rest of the money will have to come from within the department with the Government demanding that the ministry "re-prioritise" or cut its spending in some areas.

Among those likely to miss out will be the Waikato town of Otorohanga, which has recently enjoyed the services of a state-funded youth worker.

Mayor Dale Williams said it has made a real difference to the community.

"We've had virtually no under 25-year-old unemployment, our youth crime is right down - all of the indicators would suggest we're on the right track," he told ONE News.

"So I suspect we'll be back to how it was and the results that we used to get."

Funding will instead be focussed on early childhood education ($80 million), extra Work and Income staff ($55.1m) and youth services ($148.8m).

The reforms will see those on the unemployment, sickness and widows benefits, along with sole parents whose youngest is over five forced to look for work.

"170,000 New Zealanders spent the majority of the past decade on benefits. That's bad for children, families, individuals and the economy," said Bennett.

She adds that $77.6 million will be spent to support around 14,000 disengaged 16 and 17-year olds into education or training.

"Youth providers will have unprecedented flexibility to work with disengaged or unemployed young people and teen parents to get them into education, attaining NCEA Level 2, or in training."

But Labour questions why the Government's pouring millions into youth services while at the same time restricting the number of young people that can access them - as is the case in Otorohanga.

"With 87,000 young people not in employment, education or training we need to be working with as many of those young people as possible," social development spokesperson Jacinda Ardern said.


Long-acting contraception will be paid for by the Government for beneficiaries as part of its reforms.

Bennett said $1 million will be spent on providing long-acting, reversible contraception, which will initially be for young people, but will then be rolled out to all beneficiaries.

"We certainly have concerns about children being born, in particular to those on welfare, and we see the access to contraception as actually being a barrier, in particular the cost around it.

"Pharmac fully fund the greater percentage of a lot of it, but there's still a cost and that's seen as a barrier," she said.

The first Bill in the welfare reforms is before select committee and takes effect from July. 

The second Bill, focusing on fraud clamp-down and benefit categories overhaul, will be introduced this year and due to take effect from mid-2013.

Social development is to be one of the few agencies to get a small boost in funding, along with the health and education sectors.