Our $2.9 billion benefit burden

Craig Foss. Photo / Warren Buckland

Recently released figures show Hawke's Bay welfare liability sits at $2.980 billion, which could be a case of the region going gang-busters in summer and hibernating during winter.

Following the release of Social Development Minister Anne Tolley's report in January which hailed a $12 billion reduction in future benefit liability, Tukituki MP Craig Foss sought a breakdown for the region. Mr Foss said liability of $2.980 billion demonstrated the need to focus resources on helping people move into work.

"Work is the pathway to a better life in the Bay and these numbers show us where we need to focus our resources."

Each town faces different challenges: Napier, supported living payment clients; Wairoa, increasing employment opportunities for job seekers; and Central Hawke's Bay, supporting youth. Hastings has the highest number of non-beneficiaries needing more support, but the highest number of work-ready jobseekers. Still, it has a lower average liability than Wairoa.

The Government is supporting families to break the cycle of welfare dependence, and has made 40,000 additional places available for beneficiaries to get work, Mr Foss said.

Welfare reforms were introduced in 2012 to support and encourage people's benefits, and entry into employment.

The largest forward liability was for people needing supported living payments, but third highest were those on a benefit who required extra support.

Mr Foss said this indicated average low wages across the area, seeing people needing low levels of support.

Hawke's Bay was a "low-wage economy", Nelson Park Ward councillor Maxine Boag said.

The median income was lower than other places in New Zealand and central government had done nothing to address this. "We need a benefit of a decent wage so people can afford to live."

Ms Boag said the $25 increase in benefits wasn't enough to meet everyday needs of ordinary people.

"There's a lot of poverty in Hawke's Bay."

She said there was a lot of low paid work with hospitality and seasonal work dominating. Often when people got jobs they struggled with transport to and from. She said people in her ward were struggling and there was a huge amount of poverty, especially among children.

"That's our future - it doesn't make economic sense. The gap between the rich and the poor has widened."

She said even people in fulltime work were struggling to break even.

Labour MP Stuart Nash said the challenge for the region's economy related to seasonal work when things tended to "go gang-busters ... but then hibernate over the winter months".

"This is why I question the value, for example, of spending $80 million of ratepayers' money on a dam that will not diversify our regional economy."

He said scarce economic development money should be spent on industries and clusters that employed workers 12 months of the year and paid salaries and wages above the minimum.

The report showed youth payments and youth parent payments had a high average liability, the biggest being in Central Hawke's Bay.

Eastern Institute of Technology deputy chief executive Mark Oldershaw said they worked closely with Ministry of Social Development to help youth find employment and overcome work barriers, such as not having a driver's licence.

Mr Nash said Hawke's Bay's welfare liability did sound like a big figure but he was aware statistics could be manipulated to reflect anything.

He agreed resources needed to be focused but believed these needed to come at the secondary school level.

"I believe creating the right attitude and expectations towards work and participation must actually start in the secondary schools."

While the region was suited to seasonal work, Mr Nash had qualms about the number of overseas recognised seasonal employers coming to do the work.

"We have over 5000 unemployed and yet we have 3500 RSE workers."

He said he was "philosophically against" employing overseas labourers while Kiwis need work.

Mr Nash also noted that under current market situations, RSE workers were vital to the region's horticultural and viticulture industry sector.

He said it was necessary for businesses to grow and thrive and create sustainable jobs that paid decent wages and salaries.

"Hawke's Bay has always had a problem with low wages."

Mr Nash said a highly targeted regional economic development policy that leveraged off the region's national competitive advantages to add value to the region's economy.

"This can be done; it should be done, but I am a little worried that we aren't being as proactive as we should be."