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Budget 2012: Government plays on the welfare merry-go-round

Social Development Minister Paula Bennett says the government is making an up-front investment of $287.5 million over the next four years in the first phase of its welfare reforms, but that comes at the expense of current services aimed at getting young people and the unemployed into work in order to fund it.

This Budget shows cuts of $155 million from those services, including savings from axing the Youth Transition Service (which costs $12.6 million each year).

It will also cut $96.4 million over four years to employment assistance offered by Work and Income, taking it from $111 million this year to $93 million next year. 

In its place the government has set aside $287.5 million over the next four years for a package of support for unemployed job seekers.

Budget 2012 includes:

$80 million over four years for early childhood education childcare and the Guaranteed Childcare Assistance Payment.

$55.1 million over four years for 155 dedicated Work and Income staff to support job seekers and sole parents into work.

$1 million over four years for financial assistance to access long-acting reversible contraception.

$1.1 million over four years for Work and Income's board.

$148.8 million over four years for youth services, including wrap-around support.

"This Government has embarked on ambitious reforms focused on supporting New Zealanders out of welfare and into work," Finance Minister Bill English said.

"The Budget invests $287.5 million over four years in the first phase of this programme. This funding provides more education and training for young people. It will also focus on work availability and preparation for sole parents, widows, women alone, partners within the benefit system, and parents who have subsequent children while on a benefit.

"The second phase of welfare reform will be implemented in July 2013. This will involve changes to benefit categories. Both phases of the reforms are a shift towards a new investment approach to welfare.

"The investment approach provides greater transparency over the long-term cost of welfare, and focuses government agencies on reducing this cost through employment support and training."