Fewer number of workers supporting each beneficiary in September quarter

Don't panic, we now have need for some more Hobbits. Contracts state the going rate is: 2 potatoes a day. An extra cabbage for any speaking roles. Welcome to the Village of Simpletons!

what about number of workers supporting those on the Government payroll,add them to the beneficiaries and the figure should be a shocker.

this can't be true!!!! We are out of recession and heading towards 4% growth 

Bernard,

Great work - a pity this can't be distributed to the masses.

Add in some $'s per beneficiary / 1.7 and see the tax take required per individual from all sources to balance the books.

Just doesn't work - which is why we are running a  $ 15 B deficit !

Only issue is how much longer foreigners will go on adding to our  $ 246 B external liabilities.

Great report Alex and team... very disturbing numbers I have to say.  Are you able to add public sector jobs (as per comments above) ?? This would indeed give us a better picture of the burden on the private sector.

When you start to step back and look at the total private debt obligations of the country as a whole and the ongoing liability of a growing public sector + growing beneficiary numbers, the future does not look good. 

Also just a thought, should welfare be privatised in NZ ? Effectively farmed out to donation based charities like Red Cross, World vision etc where it seems more appropriate ?

Matt S , you are right - we need more like privately owned ponzi schemes with bosses earning hundreds of millions and workers doing their jobs voluntarily.......Just perfect.

$450 million per year now saved from early childhood education. How much can be saved from end of life cost, 75% of the $16 billion health care vote is spent on over 70 year olds, but under 18 year olds do not vote. What if the loss of voting franchise after 65 years old was introduced. This would address the demographic distortions of policy planning to attract the older voter. Only workers can improve NZ trade deficit! Cutting health care by $13 billion a year would cover this years deficit. I know an 80 year old man fitted with $5,000 hearing aids in each ear that now sit in his top draw because he chooses not to wear them for comfort reasons. I just raise my voice a little when I speak to him. That money is better spent on under 14 year olds, our next generational cohort of workers tax payers, than cosmetic near end of life health costs.

As much as I think, insist, and demand that cigarettes be outlawed, maybe it is not the tax take that keeps them on the shelf, maybe they are not banned as we can not afford for half of the smokers not to die early. hmmm....

terrible terrible terrible

President of Property

Good report Alex

These types of statistics simply do not make it into the public debate because they are not PC. i.e. they are seen as benefit bashing.

I agree with some of the comments below, what would be great is to see the proportion of income generating sector v income consuming sector.

Income generating sector = those in private sector

Income consuming sector = those on benefits, public sector employment (both local and central).

This is the reason why we are borrowing $13bn p.a. and as our population ages, the situation will only get worse.

It is simply not sustainable given that those in the income generating sector can move to Australia, taking their taxes and assets, leaving behind those in the income consuming sector with no income as having to service and repay the debt the Govt has accumulated.

We are looking at a 3 year report. Over this period unemplotment grew. It would be useful to look at the sitauation in 1993 when unemployment was higher.

The rise in over 65 year olds is not hard to predict. Paying for them was the reason the Cullen fund was started.

What is the point of the report?  To scaremonger?

Alex:  does this figure including Working for Families beneficiaries?  There are now thousands of parents, mainly housewives, who won't go back to the workforce because they will reduce or lose their WFF.  This middle-class welfare is a fairly new phenomenon, & so if included may be pushing the ratio up. 

Cheers to all

In my experience it is the lower paid workers who are slogging away and seeing people laying an egg whenever the dpb is about to expire who get most wound up.

The Greens are on the job (being a party familiar with population biology, sustainabilty and all that):

"The Greens would extend the Working for Families Tax Credit to the country's most disadvantaged 140,000 families, those on benefits. National and Labour punish beneficiaries by not giving them this tax credit but single parents who are unemployed should be able to afford to feed their kids too, and go to the movies every now and then.

The Greens would build 6000 new state houses so that more families can afford to pay the rent."

http://blog.greens.org.nz/2010/10/29/greens-hosting-conference-on-susta…

The basic problem is that National Super is a huge social welfare entitlement, and virtually all the elderly see it as their 'entitlement.'  Means testing is not the answer as that just encourages people to not prepare and save for retirement, the only answer, but politically unpalatable, is to not have national super until a person really is not fit to work, say at least 70 years,probably even 75 years, or if they want to have retirement then they plan it for themselves and not expect others to fund it. But expect to be shot if you are a politician trying to bring that in!

@ JH

Unfortunately the Greens have abondoned their environmental roots and have been highjacked by a socialist agenda.

If the Greens were concerned about population growth, which they should be given that this is the single largest environmental threat facing the planet, wouldn't you first stop a subsidy which paid people more if they had more children, which is precisely what the WFF does?Why on earth would you extent a population increasing subsidy?

I'm with you David, I don't want to work beyond reaching 60 years, and I'm not French. But I don't expect the taxpayers to be obliged to fund people to enjoy themselves either. The huge social welfare expenditure that goes into national super dwarfs social welfare expenditure on other aspects.  Agree with jh that people would need to be told they shouln't expect support, but which politician is going to do that?

Our parasitic nation is losing the plot. All I see now is coffee houses full of obese mothers with screaming kids, supermarkets full of obese people and their screaming kids.  Ive also noticed just about EVERY council activity caters too these people. These people are bankrupting our nation. They are unproductive with NO incentive to improve their lives outside the socialist utopia model of which revolves around a mortgage, big car, boat and holiday to the Gold Coast.

When we start to earn the same as the Chinese each day will it then dawn of these people that just maybe they should pull their finger out?

Harsh I know, but quite frankly there is some truth to what i say and I'm sick of  our entire tax take catering too it and encouraging it

My mother & father brought up 5 children on a single income without any government benefit (in hand) to speak of. Many of us have this history. So.............what has gone wrong that now EVEN in this technologically more advanced age that this is no longer possible for most?

Could it be the personal debt people are now willing and encouraged to take on? Or is it just an inflation & productivity problem? Is it a combo? Are we now just too spoiled for choices?

New Zealand has 104,000 DPB solo parents who add $1 billion to the bill of tax payer funded stay at home or pay GST as the only contribution to an export lead economy. So at the age of 70 years old the care of the older person falls to the solo parent who needs a person over 14 in the home to legally be able to pop out of the house and the child or children are looked after. So this frees up a working age adult. The older person cashes in an unproductive capital in a home to live in the back room of a solo parents home to free them up to work. The solo parent works and buys the home of the old person (who has a two story home with three bedrooms and two registered and warranted cars that they can not drive now due to old age and keeps the cars because one was here deceased husbands and the others was hers when she could drive 6 years ago. This last 18 months helps the economy in very productive way. But I get your point that three score and ten has become the mark to pass at all costs and not the mark to land on for a happy and full life. Drop the emotional blackmailing of of older voters that they will be forgotten if they do the right thing for the economy in voting for younger persons policies that enrich and make wealthy younger people in New Zealand. Only make those comments when the budget is balanced and not before. You can not have your cake and eat it too when you will rob from the young and delude the older. All H.s.s. (humans) want the best for the young. Those that do not are cannibals (in the financial setting. Just look a Blue Chip investment. Now where is our investment confidence in mineral extraction of the $5-$20 trillion crown minerals? That is right. Better an old room in the back of a solo parent home and looking after the young than mal investment in lost leaders because age makes sitting ducks of huge capital entrusted to age feeble minds. Our future is to important to let mismanagement rule new zealand equity markets. ;-) Peace.

So who has the balls to make the decisions that must be taken to try keep NZ from entering the 3rd world club. Think this can't happen, stop before you answer and have a think about where all this is going to end up if the maturity level of the electorte & politicians does not improve vastly, very quickly!

The ratio of productive to non productive if you you include all the public sector would likely be around 1:1 if not negative. Imagine that being published by the mainstream media. Scaremongering it is not, reality for NZ it is!

LlyoydM1

Grow the economy is the only out. Each person in New Zealand is approaching NZ$60,000 in debt to over seas and a nation. The crown minerals New Zealand has is $250,000 (assuming $10 trillion of the $5-$20 trillion quoted by Dr Elder of Solid Energy at the NZ Petroleum Conference 19-22 Sept 2010 at Sky tower). So if we do nothing for 21 years at 7% interest then just the interest payment will be $60,000. So act now on the crown minerals. Get a third out to pay off the debt, get a third out to put in the bank like Norway did with its oil reserves over 40 years and has $500 billion in the bank called a pension fund. And leave a 1/3 in the ground for the greeny in all of us.

Grow the economy fast. Attract the one million New Zealanders that live over seas back (500,000 just in Australia) and become wealthier than Austrialia in the next 15 to 25 years.

Peace in growing the economy.

LloydM1

New Zealand sits on a plate that is 79% the size of Australia with the mineral wealth being under the sea (95%) and the rest on the land above the sea (5%). The UN has provided legal title for New Zealand over the under sea area. Yes you are correct that the USA could get it self out of the fiat money trap or fractional reserve banking with interest if it could put all of the minerals of New Zealand on the asset register of USA companies. So the USA will never face Hyper inflation for this reason. Either President Nixon has a criminal mind and criminal intent when the gold standard was suspended in 1971 or he understood that the minerals of the world would come to support the USA printing money in good time. Remember that minerals come out of the ground once and sustainable development needs be made with the income while it flows. So this is just a get out of jail card free for New Zealand but the policy planning discussion we are having must continue. I am a demographer by post graduate training so reflect on this. 1844 the world population was 1 billion people, when I was born in 1969 the world population had grown to 3 billion people, to day in 2010 it is 7 billion people and in 39 years by 2050 it is predicted to be 9.1 billion people. That is a 1 to 9.1 billion people increase in 200 years! Also 5% of all humans who have ever lived are alive today. 70,000 years ago H.s.s. (humans) numbered in the few 1,000 in small scattered groups of 30-300 people. LloydMi if you want to have an insight into future energy source for the next 1,000 years that is one million times more energy gram for gram than coal and has no CO2 liberated then look up number 90 in the periodic table. So you can see interest.co.nz is opening a good online policy discussion forum that University are incapable of being the conscience and critic of in real time. This is the Universities' of the Future and you are the new on line Professor and Dean of this discussion. Only then and by this forum will we get a chance for the truth to be approached ("truth" and not "better" because the word use  would be emotive). Peace, wanting to take a one way trip to Mars when my three score and ten years are up so in the last 18 months of my life I can do scientific experiments for knowledge. Life expectancy is a spot to arrive at and not to by pass and over run at expense of the younger generation.

The cost of benefits seems to me readily solvable – the real problem is that now there are so many beneficiaries, retaining their votes is a major political objective of any government, thus limiting the options. 

Here's one solution, even though probably politically impossible: 

1. Government initially establishes what percentage of the gross domestic product is available for benefits. This percentage remains fixed permanently.

2. Every six months when the GDP is known, allocate the appropriate percentage for registered beneficiaries at that time and alter benefits accordingly, up or down.

3. During the ensuing six months, additional beneficiaries would mean the figures got out of balance, but would be corrected again at the next six-monthly review. 

This is fair, as the country would be supporting the needy according to its ability. If the GDP declines, this mean taxpayers' incomes on average have decreased, so it is fair that beneficiaries' income would also decline. 

It might also encourage the reporting of those who rort the system – beneficiaries would soon appreciate that every $ paid to those who shouldn't get it reduces the amount available for legitimate beneficiaries. 

It is also possible that the tendency for uncontrolled growth of beneficiary numbers, as happens now by having an open-ended benefit payment system, would be controlled. This would occur because if the numbers got too large, the average payment would be small enough to encourage many to seek other means of income.

I guess I make up a part of these statistics. We were productive tax-paying workers in NZ until May of this year. Sick of unaffordable property & high taxes we jumped the ditch. NZ needs to become more attractive to workers & less attractive to bludgers or the country will continue down the slippery slope toward insolvency.   

One of the things I find really frustrating about the whole social welfare system in NZ is the lack of easily accessible information about its cost. I wanted to look up how much was spent on National Super, how much was spent on the DPB, Invalids Benefits etc, in the last financial year, and how many people were receiving each benefit. When I went to WINZ’s website to find out this information none of it was available. This is outrageous! The website is almost entirely devoted to a beneficiary’s entitlements, and none of it is devoted to a beneficiary’s costs to the taxpayer. (And I am by no means anti-welfare, but this information should be front and centre on WINZ’s website for the entire world to see). A simple pie chart of the annual cost of each benefit including National Superannuation, together with a similar chart detailing the numbers drawing each benefit, including National Superannuation should be readily accessible. Maybe a third pie chart could break down the whole of Govt expenditure so that the amount of money spent on Social Welfare as a percentage of annual government expenditure could be easily compared to the amount it spends on health, education, defence, policing, etc. This is basic information that we should all be able to easily see. After all it’s our money they are spending, and I want to know what on.

The biggest beneficiaries of  "State Welfare"  are the Fat Cats who pay to little tax on their massive incomes, much of which they have obtained at ridiculous $/hour rates. Then there are the unearned incomes of $1M+ from investment. These groups seem proud of the fact that they have screwed the system for their low tax paid.

Over many years as a country we have destroyed tax gathering from death duties and made it easier for accountants to gouge out low/nil tax on property etc.

Our wonderful government have been either to ignorant or gutless to find substitutes like capital or asset taxes.

Before anyone starts to criticise I declare an interest because I have been benefitted too and having reached that age where I am about to take advantage of the health system, I have also consciously decided to self-insure and also will not call on the State for rest home care if that becomes a need.

The need to discuss progressive taxation on money earned is needed. Consumption tax like GST should extend to selling of a house! Then the government uses this money for first home buys and newly wed families. The other matter is income tax. Leaving aside death duties I am interested advocating the following. Government only needs 20% of GDP to run. The tax take is from income tax to pay for this. The first cent a person earns is tax free but a final dollar amount per year earned in 100% taxed (the worst any person will get to take home is 50% of the money earned if earning over one billion or one million dollars per year depending on how the GDP of 20% defines the upper amount. The line between the first cent and the last dollar earned is a linear line (fair on all). 

Sore-Winner

You raise an interesting point about "I just do not understand it" when you also say "Maybe JOHN KEY and Co should invest some more??....we ain't bankrupt...YET." Because you are correct. The English Speaking world has much more room to play this out. The crown minerals are huge when compared to our debt (approaching 250 billion dollars) and are 20 to 100 greater. So understand this. We are going to prosper and be better off than Australia in the next 15 to 25 year time frame. One million New Zealander's will come back from over seas with capital and experience to help the 4 million here at home cope with this prosperous time to come. UK and USA have been "saving for a rainy day" both New Zealand and Australia and now they need to call on these resources in minerals to bankroll the next big push to feed the world. You are correct "we ain't bankrupt yet". RYoung

Saw winner

Lets run two time lines for New Zeal - and

Out to 2013 and see which one your think will play out

10 million people around the world want to come live in Para-lised New zeal-and.

1. To make space for 10 million new gold diggers the only option for 4 million here is double bunked shipping containers that can hold 3 million or 3/4 of the present population. These containers will one day be staked on boats and set afloat (just) 200 miles off the coast out of site out of mind. HMSs No-Zeal-and prehaps named. Or THC floatilla.

2. The United states of the Pacific. Each student gets to pay off student loan by living on the pacific Islands for 2 years in Tonga, Samoa, Cook Islands, Nuie, Tuvalu etc. These skilled person upgrade the roads first, then upgrade water and sanitation. Then introduce Thorium power to each island and a Singapour, Hong Kong, Taiwan economy blooms. The Islands then pull weight in the UN and this reverses the one way traffic onto our health waiting list. Next a progressive tax is promoted by a new party called "The Farmers Party" with a spin off in Opposition called the "Technology Party" for the texting 18-35 year olds that do not vote. The progressive tax policy states the first dollar earned in zero tax and a linear line to 100% tax is drawn to collect 20 percent of GDP. Productive people are encouraged to grow the economy to earn more money. The benefisory needers are encouraged to work because not tax means no free ride. 

All we have to do is drill to find the gold and silver and then make our banking system as good as gold and it sits in the ground. If we go broke then we dig it up (greens need to support working hard for all people with no retirement age) and if we save then the gold just says in the ground.

So Sour-winner it is over to you to start the Farmer party or the Technology Party for the next election. Labor and National or a smaller party all need 5% of the vote to get 5-7 MP. But the first past the post could return or MMP out to have 100 MPs with 20% being appointed by the party.

I say an upper house is needed in New Zeal-and. The radical learches from left to right policy agenda every three years causes candy to be taken from the baby.

New Zealand First will get the student vote this election now the student unions are to become volentary. This will provide one co-alitions party for National. Many changes to bring one million NZers back will be passed and blaimed on New Zeal-and First. Then out right wins will take place the next two elections to finish off the reforms.

Southern Hemisphere is the gold and silver future of the world. Mars is out unless one is over 70 years and want a one way ride for scientific endeavor. 

The older aged will be put back to work with a skills to train the young from aged 14 years and working in with trades persons who now do 60 hours a week to feed a family. Old people will join the 14 years olds to help out and improve conditions down to 35 hours for the same money for trades presons. the young will learn a trade and the old will work the young with wisdom and use the youth for the energy they have to learn from the old person's experience. All will work in some way even if it is just to answer the phone and give directions to the $28 billion per year tourist industry passing by. all must contribute to keep a vote in the National election over the long term.

Sweet winner are you happy to comment now?

RYoung voter.