New Zealand is widely credited with being the first country in the world to introduce a social welfare system at the beginning of last century. Once again we are leading the way in welfare but this time not in a good way, the Alliance Party believes. We have become the first country to commission an actuarial valuation of our benefit system for working age adults.
“Giving a million dollars to an Australian firm to try to guess how many people will be on benefits all of their working lives and how much this might cost the country does not seem prudent use of taxpayers’ money,” according to Alliance Party co-leader Kay Murray.
The conclusion drawn in this very expensive, supposedly ground breaking, report is that, “There is an inherent limitation on the accuracy of liability estimates in this report caused by the fundamental uncertainty of attempting to predict the future… future client liability cohorts can be expected to differ, probably materially, from our estimates of those costs.” In layman’s terms, they don’t know.
This is unsurprising. Nobody could claim to know how many people will need benefits 50 odd years into the future and how much it will cost. If the same exercise had been carried out 55 years ago, the predictions of beneficiary numbers and the cost to the country would have been vastly different from the reality today. At that time there were a grand total of 95 people on the unemployment benefit, whereas in June 2012 there were 162,000 – a number that would have been inconceivable in 1957.
The Alliance concedes that the report may accurately predict the numbers of people on benefits if National remains in power. That is if the whole exercise isn’t a cynical ploy to convince voters benefits are unaffordable and that people out of work should have to take their chances with a begging bowl or turn to a life of crime.
However if the Alliance Party is in a position of influence in the future, the numbers of unemployed will be much lower, hopefully as low as they were in 1957. The Alliance is a political party that is committed to full employment.
“We will ensure that everyone who is able to work can find a decent job that pays a livable wage. Unlike the National government we do not want to simply decrease the number of people on benefits, we want to increase the number of people in well paid work,” says Ms Murray.
Political decisions determine the number of people out of work, not crystal ball gazing. No actuarial valuation is required.