MSD can cope with up to 60,000 on dole

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The man heading the ministry handling unemployment payments says he has sufficient resources to cope with nearly double the present numbers on the dole.

Ministry for Social Development chief executive Peter Hughes, who is in charge of Work and Income, told a select committee today that at present 34,000 people were signed up for the dole, and that he had the resources to cope with up to 60,000.

If and when the numbers rose above 60,000, the ministry would need financial assistance from the Government, unless it could make further efficiencies.

"I don't know what it's (the economy) going to go to – we're planning for every scenario," he said.

"We have to be working in the next-worst scenario to the one we're in."

Mr Hughes told the social service select committee the household labour force survey showed 4.6 percent –105,000 people – of the adult workforce was unemployed.

But only 1.3 percent of the workforce – about 34,000 people were actually on an unemployment benefit at the end of January.

Nine years ago, there were 160,000 on the dole.

Mr Hughes said that at the peak of the current recession New Zealand could come close to 100,000.

At another select committee, Finance Minister Bill English was asked today why no updates on unemployment were available despite the deepening economic crisis.

Treasury forecasts completed at the start of December predicted 52,000 more people would be out of work by the middle of this year.

Mr English told the finance and expenditure select committee the Government preferred to focus on coming up with policies to tackle the generally worsening economy, rather than concentrating on forecasts.

Mr Hughes said between 30 percent and 40 percent of the people who currently turn up at an unemployment centres went away with a job, rather than a benefit.

This gave New Zealand a big advantage in comparison with countries such as Australia, where 3.7 percent of the population was on unemployment payments, Britain (1.9 percent) and Ireland (9.3 percent).

"The challenge for us is to stay in front of the workload," Mr Hughes said.

"The two big things I worry about is that there are not enough jobs to put people in – we need to squeeze out every job that we can get – and we need to stay in front of the workload.

"If there are queues and we're not able to actively place people in jobs before they go on the benefit system. . .then we're in trouble.

"We can deal with up to 60,000 people on the unemployment benefit at this stage, with our current level of resourcing.

"At 50,000 to 60,000 we'd be making a lot of difficult choices and re-prioritising staff across the organisation, but we can manage."

Mr Hughes said a rolling forecast for four years out showed a $100 million gap between what the ministry would need to meet all its costs such as wage and salary increases, and building leases, and the present baseline funding.

"We have found ways of bridging that gap, a lot of it through the use of computer technology: we've taken big chunks of overhead cost out of it.

"That means I don't have to ask Government for money to meet those cost increases."

- NZPA