Government releases action plan in bid to reach ambitious employment targets, address ‘surge in welfare dependency’

Social Welfare and Employment Minister Louise Upston. Photo / Michael Craig

The Government has announced a new 12-point action plan in a bid to address its ambitious employment goals, saying the labour market has “persistent and serious gaps” in outcomes for different groups, productivity growth rates that lag behind most other OECD countries and high levels of mismatch between the skills workers have and the skills employers need.

Social Development and Employment Minister Louise Upston announced the new plan on Tuesday, saying in the report New Zealand was facing a “surge” in welfare dependency and the Government wanted to see 50,000 fewer people on the Jobseeker benefit by 2030.

For the week ending August 16, there were 202,284 people in New Zealand who were receiving the Jobseeker benefit. Most people, 117,153, received the Jobseeker Work Ready benefit, while the rest received the Jobseeker Health Condition or Disability payment.

The plan covers multiple industries, including education, migration and regional infrastructure development, and takes into account work programmes happening within these sectors that will benefit the labour market.

The plan would be led by the Ministry of Social Development, the Ministry of Business, Innovation and Employment, the Ministry of Education, and the Tertiary Education Commission.

“The Government’s focus is on supporting people into employment and reducing benefit dependency, given the negative impacts of benefit dependency on youth and households with children, as well as tightening migration settings at the low-skilled end where there are opportunities to help New Zealanders to get into work,” Upston said in the report.

“The surge in welfare dependency requires early and decisive action, by setting out clear expectations around employment, delivering services where and when they can make the most difference, and the use of benefit sanctions where people are not meeting their obligations.”

The main challenges the labour market faced, according to the Government, were:

• A rate of productivity growth (GDP produced over total hours worked) that has lagged most OECD countries since the 1970s, and modest real wage growth.
• High levels of mismatch between the skills workers have and the skills firms need.
• High numbers of people reliant on Jobseeker Support Benefit.
• High inward migration, due to both offsetting New Zealanders moving to Australia and an increasing number of lower-skilled temporary workers.
• An education and training pipeline that risks not providing the right skills for current and future workforce needs.
• Persistent and serious gaps in labour market participation and outcomes for specific population groups, especially women, Māori, Pasifika peoples, disabled people, migrant and ethnic communities, older workers and youth.
• Changes to the labour market from technology, climate change responses and demographic trends that may cause market shocks or make existing issues worse.

Goals included in the 12-point plan include targeted initiatives to get young people off welfare, addressing persistent disadvantage within the system, support in-work training, reform the vocational education and training system, and refresh the New Zealand Curriculum and implement other education goals.

The plan also includes migration changes, such as amendments to work visas to ensure “settings are better focused on facilitating the right mix of skilled migrants and that New Zealanders are first in line for jobs”.

Julia Gabel is a Wellington-based political reporter. She joined the Herald in 2020 and has most recently focused on data journalism.