National's 'costings' not all they seem

A manufactured ‘crisis’, similar to that suffered by ACC, could be on the cards for New Zealand’s welfare system if Paula Bennett continues with her so-called 'investment' agenda, Labour’s Social Development spokesperson Jacinda Ardern says.

“Ms Bennett released an actuarial valuation of the future cost of welfare benefits in New Zealand yesterday.

"It was an $800,000-plus taxpayer funded accounting exercise which told us little that we didn't already know about where the main welfare costs and risks are arising from.

“Such valuations are known to be unreliable, and are used for instance by people wanting to invest in insurance markets. Even the company who carried out the exercise admit they have never done this kind of work for an entire welfare system before.

“Which begs the question: Why is the Government really doing this? It certainly appears there is a much bigger agenda on the cards.

“The company that conducted this exercise, Taylor Fry, is an Australian company which specialises in actuarial valuations for the insurance sector, and is the same company that advised the Government on the actuarial valuation and monitoring of ACC back in 2010.

“That result of that was that then ACC Minister, Nick Smith, concocted a crisis that hadn't previously existed. That in turn led to the kinds of ill-treatment of ACC claimants that New Zealanders now deplore.

“Cabinet papers reveal the 'investment' agenda for welfare includes an incentive-based regime that perversely could cut the Ministry of Social Development's operating budget if it fails to meet reductions in the estimated future welfare liability, as outlined by Taylor Fry.

“We have already seen what regimes like this do: they reduce the focus on individuals in favour of the bottom line, and clients are treated with disdain.

“Of course we need to do all we can to move people into work and a better future, but turning our welfare system into a pseudo-insurance regime is not the way to achieve that.