Lindsay Mitchell on joining the right dots and on the sobering outlook for people who will be lifetime beneficiaries

THE Minister of Finance and Deputy Prime Minister has been braying about the Government lifting “about 66,000 kids out of poverty in the past few years …” 

In its latest annual report the Ministry for Social Development takes pride in its focus on getting people jobs resulting in 226,836 clients moving off benefit into work in the last two years (“our highest recorded result”).

But social commentator LINDSAY MITCHELL points out that 415,266 benefits were granted in the past two years, when more benefits were granted than cancelled.  She writes: –  

The Minister of Finance and Deputy Prime Minister says:

“We’ve lifted about 66,000 kids out of poverty in the past few years …”

What he neglects to add is they have also consigned about 37,000 more to life on a benefit bringing the total to over 209,000.

Robertson continues:

“If we don’t have a population that’s feeling well, healthy and happy, then they’re going to be less productive.”

It’s a shame he doesn’t link the two. New Zealand has long struggled with low productivity. Perhaps that’s because there is so much intergenerational welfare dependence?

Early entry into the benefit system is strongly co-related with intergenerational benefit receipt.

MSD’s own commissioned analysis found:

The correlation is striking enough to believe that early entry may be a proxy for intergenerational benefit receipt (with the notable exception of teen-aged SLP entrants).

  •        The evaluation looked specifically at the share of beneficiaries up to age 25 that can be matched to a record of parental benefit receipt – a “benefit match”. We also looked at the extent of their family’s exposure to benefits, during each matched beneficiary’s teenage years (13-18).
  •        These figures show that inter-generational correlations are very strong – most young clients in the benefit system had some exposure to the benefit system through a parent or guardian.
  •        Nearly three quarters (74%) of all beneficiaries up to age 25 had a parent on benefit while they were a child, and just over a third (35%) had a parent on benefit throughout their teenage years.
  •        The greater the family benefit history the longer the client tended to stay on a benefit, particularly for the Jobseeker benefit.

But that was 2015. When National, thanks to Bill English, was serious about understanding and tackling this long-standing problem. A goal of reducing the number of children in benefit-dependent households was set as part of the Better Public Service goals. Real progress had been made seeing a reduction of 61,000 between 2011 and 2017, yet Labour scrapped the goals.

The gains made have been undone. For instance, noting the final item on the above list, the time people stay on a benefit is getting longer again.

And let’s not forget the Prime Minister who said:

 “…if you ask me why I’m in politics, my answer will be simple: children …” 

But she never ever talks about children on benefits (except when boasting about paying their parents more.) She never acknowledges the evidence that outcomes for poor children on benefits are worse than for poor children with working parents. She certainly steers well away from the subject of intergenerational dependence.

Either she doesn’t understand the implications of more children entering the benefit system, or it just doesn’t fit with her world view.

If she honestly wanted to make New Zealand the best place in the world to raise children tackling benefit reliance should be her number one priority.

MSD’s Annual Report was released yesterday.

From the CEO’s forward:

There is a lot we can reflect on and be proud of over the last year, including:

Getting more people into jobs than ever before

A relentless focus on getting people jobs has seen 226,836 clients move off benefit into work in the last two years – our highest recorded result.

Great. But how many benefits were granted in the same two years?


In the past two years there have been more benefit grants than cancellations.

With all the covid disruption to labour markets, movement on and off benefits has been volatile and not the best gauge of success.

Here is, perhaps, the most important indicator:

“The number of years, on average, for which people receiving a benefit at 30 June in the respective year are expected to be supported by a benefit over the remainder of their working lives.”  

There has been a 20 per cent increase in average future years on a benefit over the last five years.

Again, I put this down to expectations built by Labour. Through various policies they have made it easier to get on a benefit and stay on a benefit. Add to this a health system that isn’t fixing people …

Here’s a sobering thought.

Right now, that expectancy totals 4.43 million years.

      • Lindsay Mitchell has been researching and commenting on welfare since 2001. Her blog is HERE.


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