Economist warns costs of 'mean-spirited' benefit changes will outweigh the gains
Shamubeel Eaqub says the move would shift money from the poor to the crown.
An economist has expressed concerns that a proposed welfare change, set to be enacted in November 2026, will result in significant long-term consequences, outweighing any short-term benefits. Under the new legislation, youths aged 18-19 whose parents earn over $67,225 will no longer be eligible for Jobseeker payments, affecting approximately 4,300 young individuals.
Economist Shamubeel Eaqub argues that these changes are mean-spirited and unfairly burden the already struggling youth. While the government claims the policy aims to reduce dependency on welfare and encourage employment, Eaqub believes this will have negative long-term effects on the life outcomes of young people. Social Development and Employment Minister Louise Upston defends the policy, stating that it reinforces the expectation for young people who are not in employment, education, or training to rely on their parents for financial support.
However, Eaqub points out that the policy could lead to increased mental health issues, strained health services, and even a potential rise in the justice or corrections burden. He stresses that the policy was rushed through without proper cost-benefit analysis, and its implementation will result in a loss of millions of dollars over the next two decades, with well-being and mental health impacts amounting to a half-billion-dollar negative effect.
Written by urgent.news from RNZ Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
