Editorial: Everyone's a winner

04:10, Oct 26 2012

There's a double whammy when the unemployment rate drops.

First, our taxes are no longer required to keep the unemployed person fed and housed. Second, that person then has the privilege of paying some tax, thereby supporting someone else, or allowing the Government to borrow less, which means that we won't have to sell state assets. OK, I'm getting carried away now.

Actually, it's a triple whammy, the third advantage being the improved lifestyle and self-esteem of the worker and his or her family.

And we're talking quite a few people here.

There are 161 fewer people seeking work in South Canterbury now than there were a year ago. True, that doesn't mean they've all found jobs - in fact, there may be something in the argument that those leaving for Australia are helping the unemployment rate in New Zealand - but a good number of them will now have jobs.

And what's also worth noting is that they haven't simply migrated to a different benefit, as has happened before.


In South Canterbury, there are 40 fewer domestic purposes beneficiaries, six fewer on sickness benefits and 61 fewer invalids. Overall, that's 272 people.

Let's do a rough calculation and say that each beneficiary receives $180 a week, multiplied by 272, and you get nearly $50,000 a week, or $2.6 million a year. That's not a bad impact. Plus, tax of say $150 a week, multiplied by say 200 back in actual work, and that's another $1.5 million.

Close to buying a power station yet?

Of course, whenever 272 people are added to the benefit list, it costs the country that much as well, but we won't dwell on that.

A couple of surprising elements, though, emerged from the latest figures.

While there are 19 per cent fewer people on the unemployment benefit now, in June there were 38 per cent fewer than the corresponding time a year earlier. Wow. How come? And how come it's not so good now?

The other surprise was a comment from recruitment consultant Jackie Clark on how hard it is to find certain skills in the marketplace.

Now, I would understand that with 868 people to choose from you might have trouble finding an unemployed brain surgeon or pilot, but not drivers or labourers or, to a lesser extent, carpenters or plumbers.

It would be negative, of course, to think that many of the 868 don't want to work, so instead we'll assume that they just don't have the skills at present.

Which is further good news. Aoraki Polytechnic could do with a few more students.

The Timaru Herald