Bill English

By Maggie Tait of NZPA

Wellington, Nov 1 NZPA - Welfare reform is in the government's sights again but Labour say it's too soon given rising numbers on unemployment benefits.

Finance Minister Bill English said today that as the recession eased, the planned reform the Government put on hold when the severe downturn hit would begin.

He also said invalids might be targeted -- a group not covered in previous announcements.

Several measures in National's welfare policy were delayed after it won the election a year ago because of steeply growing unemployment.

However, Mr English today said policy work was increasing again and invalid payments would be included.

National's welfare policy announced in August last year included:

* Introducing more frequent assessments for sickness beneficiaries;

* forcing long-term unemployed (those with more than one year on the dole) to find work;

* requiring solo parents to seek part-time work once their youngest child is six.

On the carrot side National said it would increase the amount of money beneficiaries could earn -- from $80 to $100 -- without losing any of their benefit.

It would also relax the abatement regime for beneficiaries with a part-time job -- current beneficiaries lose 70c in every dollar they earn over $80 a week.

National would raise that to $100 to encourage beneficiaries to work.

"We made a number of undertakings before the election," Mr English said on TVNZ political show Question and Answer this morning.

"... and I'm working through material now with (Social Development and Employment Minister) Paula Bennett to take to Cabinet to put in place the promises we made."

Labour deputy leader Annette King told NZPA the government was giving mixed messages about the state of the economy.

"Unless we really are out of this recession trying to force people into work at this time is going to be very, very difficult," she said.

"If you were saying we are now in a position where unemployment was going to be dropping every week -- not increasing -- then you could say there will be opportunities and training chances for people on benefits but that's not what Mr English is saying."

Seven percent unemployed was still high.

"They've decided they will take a tough line and I think they are setting themselves up for failure unless they are prepared to help create those jobs or put in training assistance for people to help them get back into the workforce."

Mr English also spoke about people on the invalid's benefit. On September 30 85,015 people received invalid benefits and 56,384 sickness benefits.

"Effectively we have (more than) 80,000 people where officially the welfare system has said they won't work again. We think that's a waste of those people and of their potential so we want to look at how to encourage more people off those longer term benefits."

Ms King said there were reasons why more people were on invalid's benefits.

The population was aging but also many people who were previously housed in institutions, for example psychiatric hospitals, now lived in the community and had to pay for living costs.

"We've closed nearly all our institutions... they're entitled to a benefit once they are out of an institution. You've had reasons for (increased numbers)."

She said to qualify for an invalid benefit a person had a long-term illness or disability that prevented them from working, a decision made by medical professionals.

"It's quite a tough test."

Mr English said unemployment forecasts might be better than predicted, likely 7 percent rather than 8 percent. The rate was 6 percent now.

"... in the last month the number of people on the dole has actually dropped by about 200 a week."

Economic growth was forecast to be 2 percent until the middle of next year, then 3 percent growing to 4 percent.

"One thing we do know though is that in the last six months the economy has done a bit better than we expected six months ago, and that's a good base to start from."