National, ACT take aim at Carmel Sepuloni for 'bragging' about welfare response

The Opposition has taken aim at the Social Development Minister for "bragging" about the Government's welfare record when there are more Kiwis on a benefit than when she took office.

Carmel Sepuloni on Wednesday morning was talking up the Government's welfare response to the COVID-19 pandemic and how people were coming off the benefit faster than after the global financial crisis (GFC). 

A new report from the Ministry of Social Development (MSD) found that across all main benefits there were 113,400 exits into work in the year to June 2022, the highest number since 1996. It also said the benefit system "responded better than expected" during the pandemic. 

"Compared to what happened following the Global Financial Crisis, the report found that this Government has delivered lower unemployment and fewer people on Main Benefits," Sepuloni said.

The minister said Government initiatives, like the Apprenticeship Boost programme and Mana in Mahi had been instrumental in helping young people into work, training and education through the COVID-19 pandemic and during the aftermath. 

But both National and ACT have accused Sepuloni of "bragging" and say the number of people on main benefits remains higher than when she became the minister responsible.

"There are worker shortages in every part of the country and every sector of the economy. Businesses are crying out for staff, with many having to shut their doors because they don’t have the workers," said National social development spokesperson Louise Upston. 

"We should be seeing benefit numbers hitting record lows. Instead, one in nine working age Kiwis are dependent on taxpayers for an income."

Karen Chhour, ACT's social development spokesperson, said Sepuloni should be asking herself "why so many New Zealanders have joined benefits under Labour and how they can get all of them back to work". 

"Labour just doesn’t seem to want to incentivise Kiwis to work. Their culture of welfare dependency is hurting New Zealand’s productivity, with able Kiwis choosing to reside on a benefit rather than play their part in society and work.

"Getting people off jobseeker and into work during a labour crisis shouldn’t be hard, it certainly shouldn’t be something to crow about when there are still so many more people dependant on benefits."

In September 2017, when the general election took place that year, MSD's quarterly benefit report shows there were 277,220 people on main benefits, with 120,726 on Jobseeker Supporter. 

Fast-forward a little over five years and the December 2022 figures (the latest available) show there were 353,904 people on a main benefit that quarter, including 170,103 on a Jobseeker support.

However, it's important to note much of the increase in benefit numbers occurred over the pandemic, when many people lost their jobs due to the economic pressures on businesses.

In September 2019, two years after Labour was elected, but before the pandemic, there were 299,472 people on a main benefit.

Carmel Sepuloni became deputy Prime Minister earlier this year.
Carmel Sepuloni became deputy Prime Minister earlier this year. Photo credit: Getty Images.

"COVID-19 had a significant impact across the benefit system in 2020 and saw a substantial increase in the number of New Zealanders needing support," Sepuloni said on Wednesday.

"However, this most recent report shows the system recovered faster than expected, and we did not hit the level of unemployment predicted at the start of the pandemic."

At the end of the March 2020 quarter, there were 309,995 people on a main benefit. With the emergence of COVID-19 in the community and a national lockdown imposed causing job losses, this quickly rose to 353,440 in the June quarter and was at 389,500 by the end of 2020.

However, it then began trending downwards from January 2021. The number grew slightly at the end of 2021 after another lockdown, before falling again over the start of 2022. In June 2022, there were 344,500 people on a main benefit. 

Another report released on Wednesday on youth said they are more vulnerable to significant economic shocks are they are more likely to have lower skill levels, be in more casual employment arrangements and work in sectors like the service industry which are exposed to downturns. 

There was an influx of young people entering the system when the pandemic began, but the report found their numbers rapidly decreased through 2021 and early 2022. 

"This decrease also occurred at a much faster rate than following the GFC, when high benefit numbers for young people were sustained for a longer period. By June 2022, youth main benefit numbers were closer to pre-COVID-19 levels than was the case for most other age groups."

Sepuloni said Government initiatives have been helpful in getting young people back into work faster than expected.

"He Poutama Rangatahi has supported nearly 3,900 rangatahi into employment, education or training since 2018; Mana in Mahi has supported almost 5,800 placements by the end of February 2023; and the Apprenticeship Boost Initiative programme has paid more than 55,800 apprentices to date."

The Government last week announced benefits would rise on April 1 in line with inflation

In 2019, the Government made changes so annual increases to main benefits are tied to increases in the average wage, which has traditionally risen faster than inflation. 

However, inflation rose 7.22 percent in the December quarter while, in comparison, the net average wage rose by 6.24 percent. So Cabinet made the decision to increase it by the higher figure, 

For a family on a Jobseeker Support benefit with children, they will see a $40.96 a week increase. A sole parent's Jobseeker Support benefit will jump $31.83.