Social Development Minister Louise Upston is hoping an additional 10,000 job seekers receiving one-on-one support will help reverse the growth in the number of beneficiaries.
It comes as the number of people on a Jobseeker benefit continues to soar as unemployment rises, threatening to derail the Government’s target to have 50,000 fewer such beneficiaries by 2030.
Upston joined Prime Minister Christopher Luxon at his post-Cabinet press conference today as he provided an update on the Government’s nine public service targets across areas from benefits, crime rates and health.
The Ministry of Social Development’s latest update, in September, showed nearly 400,000 people on benefits, with 12% of the working-age population receiving support. This was comparable to what happened after the Global Financial Crisis, when 12.4% were on a benefit.
Forecasts showed it was expected to peak at 214,000 in January 2025.
Unemployment has been growing as the economy has struggled with post-Covid high-inflation, increasing from 3.2% in September 2022 to 4.8% in September this year.
Luxon said unemployment was forecast to still increase to 5.2%.
“We know there is a real link between Jobseeker and unemployment.”
The previous quarterly update on the Government’s public service target showed an extra 6400 people had taken up the Jobseeker benefit in June, three months after the target was set. The Government wants to reduce the overall number to 140,000, but in June there were 196,400 such beneficiaries.
Upston said the one-on-one phone-based management system assisted 1500 people in July, but has expanded to 10,000 today.
It included a needs assessment looking at a variety of issues including education, transport, addiction, health, and childcare. It means that the number of job-seekers with case managers to 70,000 at any given time.
“Many of those who are at risk of long-term welfare dependency have complex backgrounds and may require more help to address all the issues affecting their employability,” she said in a statement.
Job-seekers will be supported by work readiness, literacy and numeracy, driver training, mental health, counselling, and addiction services as required.
“This increased support will come with responsibility. Those who don’t fulfil work-testable actions as agreed with their case manager could face sanctions through the new Traffic Light System,” she said.
Luxon said Jobseeker numbers should come down when unemployment falls.
“It’s challenging, but all the targets there are deliberately ambitious ... we know they’ll bounce around from quarter to quarter.,” Luxon said.
Upston said from July to October, 22,000 people exited a Jobseeker benefit into work, 4100 more than a year ago.
On whether jobs were available, she said there were though it was “challenging” at this point in the economic cycle.
Luxon said it wasn’t “rocket science” to show up to an interview, and there should be obligations because benefits were paid for by the taxes of working New Zealanders.
Upston said the sanctions can be applied “where appropriate” including relocating to find work.
“There is also a system to help them relocate.”
Luxon said Jobseekers had to show up for interviews, which could include travelling outside their region.
Upston said some workers had successfully relocated from Timaru to other meatworks in the South Island.
She said there was no expectation they would be punished if they didn’t relocate to find a job.
“We’re taking a very individual approach, case by case, depending on the circumstances.”
The last June quarterly report on the government targets categorised two targets as “at risk” - getting 80% of students to the expected curriculum levels by 2030, and a reduction in violent crime. Only two were listed as probable or on track – reducing numbers using emergency housing and reducing net greenhouse emissions.
The quarter two emergency housing data released today refers to a 62% decrease to September 30, 2024.
“Work to get families out of emergency housing is making significant headway, with data showing a more than 60%reduction from when we came into office. This is a huge step towards improving the lives of some of our most vulnerable,” Luxon said.
“There have also been small improvements in emergency department and elective surgery wait times when compared to the last quarter.”
But he said the number of Jobseeker beneficiaries was “of particular concern”.
One of the focus areas is expected to be the welfare target of 50,000 fewer people on the Jobseeker benefit – getting the number down from a baseline of 190,000 to 140,000 by 2030.
In its last quarterly report released in October, that target was described as “feasible” and the Government pointed to forecasts showing the numbers would worsen before improving.
Upston said in September that the forecasts did not change the target, and believed what the Government was doing was working. That included more use of sanctions for those who did not meet their obligations to look for work.
Labour’s social development spokeswoman Carmel Sepuloni has criticised the approach National has taken, saying the “tough on beneficiaries” approach would worsen child poverty.
Labour has also blamed the Government for the increase, noting that in tough economic times it has laid off thousands of public service staff, and pointing to job losses in building and construction sector.
Luxon was also questioned about Government plans after the first case of high pathogenic avian influenza, otherwise known as bird flu, was confirmed in New Zealand.
Biosecurity New Zealand has placed strict movement controls on a commercial rural Otago egg farm.
Luxon said he was “really pleased” with the response, including restricting the movements of birds.
He said it was a strand of avian flu that had mutated into a high pathogen variation but wasn’t the H5N1 strain that the Ministry for Primary Industries has a plan to tackle.
The PM says he's looking into council rates caps as well.