Labour defends costings of new unemployment policy

Labour Party MP Phil Twyford has strongly defended how the cost of a new policy was calculated. Bay of Plenty Times Photograph by John Borren.

Labour has hit out at criticism of its costings for a new policy to give unemployed youths up to six months of fulltime community work at the minimum wage.

The party's campaign manager Phil Twyford took to Twitter today and in a series of posts accused some media of bias and carrying out a "hatchet job" after reports questioned the accuracy of how the policy had been costed.

"There was no mistake. Numbers do add up," Twyford, Labour's campaign chair, tweeted.

Leader Andrew Little released the policy at the party's annual conference in Auckland on the weekend.

It will provide unemployed people under the age of 24 with "jobs" in the community and environment, such as pest control work or riparian planting with the Department of Conservation, local councils or charities such as City Missions and food banks.

The "Ready to Work" policy will be for those who have been on the dole for at least six months - but will pay the minimum wage of $15.25 an hour rather than the dole.

Labour said it expected the policy to cost $60m a year, based on an estimated 10,000 participants per year.

Its promotional material said eligible young people would be offered full-time employment for six months. That was the time period outlined in Little's speech, where he said "we'll set them up for six months with a job".

However, the real cost of paying the 10,000 participants the minimum wage instead of a Jobseeker benefit is closer to $90m.

Labour subsequently clarified that its $60m figure was based on an assumption that those on the scheme would do an average of four months' paid work - not the full six months available.

It was "simplistic and incorrect" to use the $87m figure, Labour argued, because existing data of people on the Jobseeker benefit showed about half went off the benefit after six months.

Labour said its estimate that each person would spend an average of four months on its new Ready to Work scheme was conservative.

Little had been asked about how the $60m figure was calculated in a stand-up with media after his speech, and did not mention the four month timeframe.

Grant Robertson, Labour's finance spokesman and who has led the party's "future of work" policy programme, said that the costing information was available to any media that asked for more detail.

"Probably the lesson is to make sure, if the focus is going to come down to how calculations are made we need to make sure we release that material at the same time.

"What I would say is, whether the cost was $85m or $60m, we think this is a worthwhile investment...these people are not being looked after and supported."