12 September 2012 MEDIA STATEMENT
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
“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
“Which begs the question: Why is the Government really doing this? It certainly appears there is a much bigger agenda on
“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.
“We certainly didn't need to waste nearly a million dollars on a report that helped keep people in an office in Sydney
busy, but won't produce a single new job for anyone in New Zealand,” said Jacinda Ardern