Labour unveils $1b plan for the welfare system

More money to get people into study, and beneficiaries able to earn more in social development election promise announced yesterday. Amelia Wade reports

Labour has unveiled its $1 billion social development policy, which would allow people on a benefit working part-time to earn more and bolster the flexi-wage scheme.

If re-elected, it would also restore an allowance for sole-parent beneficiaries going to university more than 10 years after it was axed by the previous National government.

The policy was launched by Social Development Minister Carmel Sepuloni, who said “investing in our people is a key part of Labour’s fivepoint economic plan”.

“Covid-19 is going to impact incomes and employment significantly, which is why Labour is focused on improving New Zealanders’ access to training, creating a more highly skilled workforce and ensuring those on benefits can keep more of what they earn.”

Sepuloni said while she was a solo parent studying, she was supported by the Training Incentive Allowance for a short time.

“It made a big difference having that little bit of extra financial support when I was trying to get ahead and build a future for my family.”

Labour would also increase the abatement threshold so people on a main benefit working part-time could earn more before their income support was reduced.

Currently if someone is receiving the Jobseeker Support unemployment benefit and earns more than $90 per week, they will lose 70 cents of their benefit for every $1 they earn.

Labour would also expand the flexi-wage programme, which assists employers to hire people at risk of long-term unemployment and receiving a benefit.

Last year, 6000 employers received a flexi-wage subsidy for the person they hired at an average of $3500 per candidate. Labour will increase the average subsidy to $7500. The costed package is more than $1b.

National’s social development spokeswoman Louise Upston said investment was needed in job creation, not welfare.

“If Labour has a spare billion dollars up its sleeve — and that’s a big if — then that money should be spent on creating jobs rather than growing benefits.”

Upston said National’s policies gave businesses the confidence to grow and create more jobs.

Their JobStart policy would pay $10,000 to businesses that hire more staff, while their BusinessStart policy would give support to Kiwis wanting to start new businesses.

Act leader David Seymour said lifting the abatement threshold would “make it less likely that people move off welfare and into full-time work”.

“We need to break the cycle of welfare dependency, not entrench it. It’s damaging to the spirit and wellbeing of too many families.”