I’ve just been reading a report commissioned by Social Development and carried out by an Australian firm. Minister Anne Tolley has issued a press release on the report and its lead is the following claim-

“The June 2014 valuation shows the current lifetime liability of the benefit system is $69 billion.”

Now, I’ve never been afraid to show my ignorance, and I admit I’ve been trying to work out just what this means, (what really is a lifetime liability?) for I cannot believe the implication, and that is that the welfare system, leaving out superannuation, is costing this country almost $70 billion per year. If that were true, its an amount that is in rough figures 70% of the budget, leaving only around $30 million for everything else.

The spin on this report is that it projects a reduction in this “valuation” of $7.5 billion over the next few years. The govt is trying to take credit for this in claiming that part of the reduction (roughly $2 billion) is down to policy tweeking, although I’m doubtful.

However the bottom line to me is the prime figure of $70 billion, which just can’t be right as it is completely unaffordable in a country that only has just over 2 million taxpayers. Each taxpayer is paying around $70/ week to keep the welfare system going? Many of these people have been on the benefit over nine years, and if these figures are right, and even if the reductions are down to policy, why has it taken the Key govt over 6 years to address this problem?

I appreciate that Mrs Tolley (whom I like) and the Nats are trying to do something about welfare but I’d really like to see something slightly more tangible as proof they are succeeding. To my mind the best thing would be for the chart above on government spending to start showing at least a 10% drop off each year rather than its continuing trend skyward.