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Home / Business / Economy / Employment

Benefit numbers confirm NZ split into 'two nations'

Simon Collins
By Simon Collins
Reporter·NZ Herald·
17 Apr, 2015 12:24 AM4 mins to read

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The construction sector is driving growth in Auckland and Christchurch. Photo / file

The construction sector is driving growth in Auckland and Christchurch. Photo / file

New welfare benefit figures confirm that New Zealand is splitting into "two nations", with big improvements in Auckland and Christchurch but most provincial areas lagging far behind.

Benefit numbers have dropped by 6.9 per cent in Canterbury and by 6.2 per cent in Auckland in the year to March, well ahead of a national decline of 3.7 per cent.

The only other region that bettered the national average was the Bay of Plenty, with a 4 per cent drop.

Beneficiaries declined by 3 per cent in Hawke's Bay and Nelson-Tasman, but by less than 3 per cent in all other regions. In Taranaki, hit by a double whammy of lower prices for both dairy products and oil, benefit numbers have actually increased, by 1 per cent.

Regions lagging behind Auckland, Christchurch

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Infometrics chief forecaster Gareth Kiernan said the same story of the regions lagging behind Auckland and Christchurch showed up in "almost any economic indicator you look at".

"This is very much something that has been developing through 2014 and is obviously likely to continue through this year as well," he said.

"To be fair, Auckland had a pretty crap time during the global financial crisis when the rest of the country was going quite well, so some of Auckland's growth in the last two years was a catch-up.

"But we are now through that process and Auckland now looks like a bit of a leading light for the country, which is a good thing because it has such a big proportion of the population."

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He said Auckland's growth was being driven by immigration and the construction sector, as well as services which were a bigger share of the Auckland economy.

Construction was also driving job growth in Christchurch due to the continued rebuild after the earthquakes in 2010-11.

"Across the other areas there will be an element of slowdown in the dairy sector in particular and the drop in incomes of farmers which may just be feeding through," he said.

The global dairy trade index dropped by a further 3.6 per cent this week and is now only just above half its December 2013 peak.

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Overall, the latest figures show that the number of working-aged people on benefits fell by just over 11,000 in the past year, from 295,320 to 284,260. This was a slightly slower rate of decline than in the previous year, when numbers dropped by almost 15,000, but this was partly because of a big jump of 27,500 in the working-age population driven by the surge in immigration.

Only 10.4 per cent of all working-age people aged 18 to 64 are now on benefits, down from 10.9 per cent last year, 11.4 per cent in 2013 and a recession peak of 12.4 per cent in 2011. The proportion of working-aged people on benefits is now lower than in all but two of the past 25 years, bettered only in 2007 (10.3 per cent) and 2008 (9.8 per cent).

The improvement in the past year was driven by a 7.2 per cent drop in sole parent benefits, down from 75,844 last March to a new 25-year low of just 70,373 as Work and Income enforces new rules requiring sole parents to seek part-time work when their youngest child turns 5 and full-time work when that child turns 14.

Numbers on jobseeker support (formerly the unemployment benefit) dropped by 4.1 per cent, from 121,953 to 116,893, the lowest since 2009.

Numbers on the supported living payment (formerly the invalid's benefit) rose by 0.9 per cent from 92,960 to 93,580, reflecting the ageing population. Faster ageing in the provinces is also a factor slowing the overall decline in benefit rolls outside Auckland and Christchurch.

Young people are gaining most from new job opportunities - benefit numbers in the 18-to-24 age group dropped by 5.6 per cent in the past year, compared with declines of 3.5 per cent for people aged 25 to 39, 5.1 per cent in the 40-54 age group and just 0.6 per cent for those aged 55 to 64, where the population is increasing rapidly as the postwar "baby boom" generation get close to retirement.

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The drop in sole-parent beneficiaries means that female beneficiaries declined faster than men in the past year - down by 4.4 per cent to 165,110, while male beneficiaries declined by only 2.8 per cent to 119,150.

However Maori, who make up 47 per cent of sole-parent beneficiaries, are lagging behind other ethnic groups as the economy recovers, possibly partly because more Maori live in provincial areas than in Auckland and Christchurch. Beneficiary numbers declined by only 2.5 per cent for Maori compared with 4.7 per cent for Europeans, 4.8 per cent for Pacific people and 3.2 per cent for Asians and others.

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