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    Budget 99
    Follow the money

    from The Jobs Letter No.100 / 28 May 1999

  • The Budget contained $397m of new spending ranging from a tax rebate for new parents to Maori economic development. Treasurer Bill Birch was cautious on any future approach to tax cuts. He predicted a $2.2 billion surplus in the current financial year, but expects the nation's accounts to simply to break even next year.

  • Working families will get an income-tested tax credit of up to $150 a week for eight weeks after each child is born ... a measure which commentators say is an attempt to head off the Alliance proposals for a fuller paid parental leave.

    This benefit is highly targeted to about 26,000 low-middle income working families. Families on benefits, student allowances, or ACC will not be eligible for this "baby bonus".

  • Bill Birch announced a new Maori industry-based trade training programme, piloted in two areas over the next two years, which will place 400 unemployed Maori "in permanent jobs using a wage subsidy". The costs for the scheme will be shared between the government, Maori organisations and employers.

  • The Maori Development Commissions which include the Maori Economic Development Commission and the Maori Employment and Training Commission receive the same $4.4m in funding as last year. Maori Affairs Minister Tau Henare credits the Commissions with playing a key role in developing the new Maori initiatives established in the Budget.

  • Bill Birch expects a higher demand for most categories of benefit over the coming year, with expenditure on benefits projected to rise by $219m.

  • The Budget reported that the numbers on the Domestic Purposes Benefit dropped -2.5% in the year to March, the largest decline in the history of the benefit, and probably due to the change in policies since the establishment of WINZ in October 1998. Over the past five years, the number of DPB beneficiaries earning part-time income rose by 56%.

  • The number of sickness beneficiaries decreased by -6.4% in the year to March 1999, compared to a 6.2% increase in the year to March 1998.

  • An extra $38m is being spent on employment support for disabled people to "increase the meaningful participation of people with disabilities in the socioeconomic mainstream...". Workbridge has been named as the main provider to help at least 350 disabled people into job support, 1,400 disabled people into training support, and 60 disabled people into self-start programmes.

  • The Budget expects more people to leave NZ, with a net loss of 19,000 people predicted in the next four years. Officials say that people leaving NZ will outnumber immigrants for the foreseeable future, in sharp contrast to the strong net flow of immigrants in the mid-1990s period.
    Sources _ Budget documents 1999/2000, Budget Speech and Fiscal Strategy Report, Budget Economic and Fiscal Update, Estimates of Appropriations, all 20 May 1999 Rt Hon Bill Birch Treasurer; Budget Analysis in The Dominion, The Daily News, New Zealand Herald and National Business Review 21 May 1999

    The Budget allocates $209,739,000 for WINZ to provide "services to minimise the duration of benefit dependency and unemployment and move people into work" ... which is the catch-all budgeting category for employment programmes. This is what they will be counting (taken from the WINZ Departmental Forecast 1999/2000)

  • At the end of this financial year (30 June 1999) the numbers of registered unemployed who have been on the dole for 4 years or more are expected to be about 10,000 people.
    WINZ target for 1999/2000 year: reduce this by 1,000-3,000 people.

  • The numbers of registered unemployed who have been on the dole for 2 years or more are expected to be about 34,000 at the end of June.
    WINZ target for 1999/2000 year : limit any increase to 1,000 people or less, or reduce the numbers by up to 1,000 people.

  • The proportion of Maori people on the unemployment register at the end of June is expected to be 60,000 people or 29.5%of the register.
    WINZ target for 1999/2000 year : reduce the proportion of the register that are Maori to 28%.

  • WINZ expects the numbers of registered unemployed who have been on the dole for over 6 months or more and have moved to "stable employment" to "be maintained at 17,000 people".
    (Stable employment is defined as placements of job seekers into full-time work, part-time work over 20 hrs or temporary work who move into employment and stay off the official register for 3 months or more).

  • WINZ expects between 60,000 and 70,000 unemployed people to participate in "organised activities" including community work and training.

  • Community Broker Organisations are expected to find at least 6,500 Community Work placements.

  • WINZ estimates it will have 150,000 "customer plans" in place by the end of June. These plans by case managers assess beneficiary needs and "implement appropriate interventions" to assist them towards work and/or independence.
    WINZ target for 1999/2000 year : 300,000 customer plans in place.

  • WINZ is planning for 70% of their benefit entitlement assessments to be finalised within five working days.

  • 75% of all calls made to the call centre are expected to be answered within 20 seconds.

  • Benefit crime targets: WINZ calculates a $3.25 return on every dollar it spends on services to reduce benefit crime. It estimates it will have investigated 58,000 potential benefit crime cases in the year to June.
    Budget target for 1999/2000 year : 80,000 potential benefit crime cases.

  • WINZ estimates it will have established $54m of fraudulently obtained benefits as a customer debt, in the year to June.
    Budget target for 1999/2000 year : $83.8m

  • WINZ estimates non-fraudulent benefit overpayment, in the year to June, to be $78m.
    Budget target for 1999/2000 year : these non-fraudulent overpayments shall not exceed $97.5m

    In recent years, the old NZ Employment Service had its goals for "quality" of service established in the Budget. They were based on independent client satisfaction surveys of both job seekers and employers.

    For example, in 1996, the satisfaction levels were surveyed at 58% for job seekers and 73% for employers.

    The 1997 Budget set a satisfaction target of 63% for job seekers and 76% for employers.

    The 1998 Budget did not report on how well they did in the previous year ... but set a slightly more conservative target of 61% for job seekers and 72% for employers.

  • This year's 1999 Budget is the first under the new WINZ regime. Its departmental forecast does not set any specific goal on customer satisfaction for "job seekers" because WINZ deals with a much wider range of beneficiaries. The overall WINZ satisfaction goal for its "customers" (i.e. all types of beneficiaries) is 70%.

    The target established in the Budget for employer satisfaction will be "no less than 70%".

    Source Budget 1999, New Zealand Employment and WINZ Departmental forecast reports for years ending 30 June 1998, 1999, and 2000

  • OZ BUDGET 99
    New Zealand wasn't the only place to have a Budget this month. Just a week earlier, the Howard Government released its latest Budget. But Paul Cleary of the Australian Financial Review reports that, like NZ, any major initiatives on unemployment were also missing. Cleary: "They have not presented a strategy for reducing unemployment to 5%, as floated by the Treasurer Peter Costello earlier this year, and the Budget only hints at possible solutions ..."

    The Australian government is, however, significantly stepping up its work-for-the-dole scheme pumping in another $111m as part of its campaign to force more unemployed people into "mutual obligation" programmes. This will effectively double the placements. The decision was also taken to extend the work-for-the-dole scheme to include unemployed people aged between 25 and 34 years who have been out of work for over a year.

    Also in the Oz Budget, the mutual obligations options available for the unemployed will be widened to include the Community Development Employment Programme, the Job Pathways Programme, the New Apprenticeship Access Programme and Advanced English for Migrants.

    More than $200m will be stripped from the Australian government's Job Network programme, and re-directed to kick-start a new indigenous (aboriginal) employment scheme.

    Australia's unemployment rate is 7.5%.

    Source The Australian 12 May 1999 Budget 99 feature on Jobs and Training, by Penelope Green; Australian Financial Review 12 May 1999 "Unemployment Strategy Missing" by Paul Cleary

    Click on the headings to see the tables





    "Growth is not an end in itself. We value growth because it widens the choices available to all NZ'ers. It funds the extra care we want to give to every child, every person in pain, and all families who need a helping hand to overcome a history of disadvantage.

    "In this year's Budget, the central focus is on children and family. A multiplicity of programmes, big and small, interlock to assist families of every kind, at every level ..."
    -- Bill Birch, Treasurer

    "A Budget of desperation, written in the hope that the past will not be forgotten ..."
    -- Helen Clark, leader of the Labour Party

    " This would be a good Budget if you were not an exporter, a farmer, a superannuitant, or unemployed. Nothing in this Budget could be said to power up the engine room of our economy, promote regional development in dying provincial areas or create jobs..."
    -- Winston Peters, former Treasurer, leader of New Zealand First

    "Maori are huge winners in this Budget. Maori initiatives gained over $30m extra as the Budget for Maori Affairs increases to $55m. This positive gain is a hand-up for Maori and it is now up to Maori to develop this putea..."
    -- Tau Henare, Minister of Maori Affairs, leader of Mauri Pacific

    "There wasn't enough in the Budget to convince working New Zealanders and low-income earners they are better off now than they were three years ago. The Budget I would have written would have addressed fundamental problems in the economy. I would have made my priorities: jobs, the yawning balance of payments deficit, lower tertiary fees, a commitment to public hospitals and a significant cash boost for people on low incomes, including superannuitants ..."
    -- Jim Anderton, leader of The Alliance

    "The Budget is all whirr and no grunt. The failure of the government's employment policy is painfully evident in Treasury projections for unemployment to remain above 6% throughout the forecast period..."
    -- Michael Cullen, Labour finance spokesperson

    "The Budget is clearly in "steady-as-she-goes" election mode. It is again technocratic. It is not focussed on people's concerns and does not confront the real issues ..."
    -- Rodney Hide, ACT finance spokesperson

    "The Budget fails to address the deep structural flaws in the NZ economy. The little handouts like the parental tax credit will not cover the absence of anything to increase opportunities for the many NZ'ers who are out of work, to address student debt or hospital waiting lists..."
    -- Jeanette Fitzsimons, co-leader of the Green Party

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