As more hints come about this Budget it is increasingly look like it will be the social policy budget.

The Prime Minister says it will address child poverty and material deprivation.

Speaking yesterday after the National Party’s regional conference in Silverstream he said that “kids” who were materially deprived had been getting worse off relative to retired New Zealanders.

“The reason for that is the way we value and price their particular benefits and entitlements.

“New Zealand super is 66% of the net after tax average wage.

“So as wages have risen, pensioners have been getting quite big increases.

“For people on a benefit in very low income households all they’ve had  over 30 -40 years is the consumer price index increase so that is a factor>”

He stopped short though of saying whether the Budget would bring all benefits into line with NZ Super and apply average wage increase rather than CPI to them.

But apart from that big spending issue there are likely to also be more details about the Government’s social housing reforms in the Budget.

The full complexity of these are starting to become clear.


“POLITIK” understands the Government is looking to guarantee the rent for 52 weeks a year for houses that it sells to non-government social housing providers.

That will enable the social housing to secure their bank loans to buy the houses.

However this may require some fundamental changes to legislation — including the Public Finance Act.

But this may be only the beginning.

Social Housing Minister, Paula Bennett, is also Minister of State Services and it may be that the Government looks to restructure some Government departments to take account of the new social investment approach to social services.

Finance Minister Bill English cited to the conference the example of a Government programme to dissuade women under 20 from becoming solo parents.

He said the programme had reduced numbers from 4300 a year to 2600 over the past three years.

“It has cost us a bit to run the scheme but it will save us money in 20 years’ time because they won’t be on a benefit,” he said.

“If we had done nothing every year there’d be four or five thousand joining the benefit every year for 20 years.

“That’s 100,000 of them (on the benefit).

“So what we are doing some money to reduce it later on.”

He said that later this year the Government would be reviewing what it did with the “toughest kids — the children and young person’s kids”.

He said many of these ended up costing the Government $1,000,000 but using complex data analysis they knew what the preconditions were to become one.

The details of the social housing programme, the investment approach to welfare plus Mr Key’s hints about benefits and child poverty point to another of Mr English’s comments at the weekend.

“The key to smaller Government is better Government,” he said.