Benefit Forecasts for the Economic and Fiscal Update 2023
The Treasury’s Budget Economic and Fiscal Update (BEFU) released on 18 May 2023 includes benefit number forecasts as part of the fiscal forecasts
The Ministry of Social Development’s (MSD) benefit forecasts were finalised using benefit data up to February 2023. This publication describes the key benefit number forecasts from the Budget Economic and Fiscal Update (BEFU) 2023.
The last forecast was the Half Year Economic and Fiscal Update (HYEFU) 2022, which was published in December 2022. These forecasts are important because the New Zealand Government spends a large portion of the Budget on Benefits or Related Expenses and these forecasts are used to inform Budget decisions. Expenditure on Benefits or Related Expenses typically accounts for around 30% of Core Crown Expenses.
We expect to see more working age people supported by a benefit from around mid-2023 in line with Treasury’s economic forecast
The Treasury are expecting a period of low economic and employment growth from around mid-2023. This is expected to lead to increases in the number of working age people receiving a benefit between mid-2023 and January 2025 (see Figure 1).
The number of people receiving Jobseeker Support follows a similar trend to working age benefit numbers. Jobseeker Support numbers are expected to increase between mid-2023 and January 2025 (see Figure 2).
Figure 1: Working age benefit numbers
Figure 1 shows past working age benefit numbers as well as forecast numbers.
The grey line shows the actual number of people who received a working age benefit between June 2015 and February 2023. Our forecasts of the number of working age people expected to receive a benefit from HYEFU 2022 and BEFU 2023 are displayed by the light blue line and dark blue line, respectively.
In February 2023 there were around 346,500 working age people receiving a benefit, which was almost exactly what was forecast at HYEFU 2022.
At BEFU 2023 we expect that working age benefit numbers will increase from around mid-2023, reaching around 383,900 in January 2025. After January 2025 the number of working age people receiving a benefit is expected to decrease to around 355,900 by June 2027.
Figure 2: Jobseeker Support
Figure 2 shows the past as well as the forecast number of people receiving Jobseeker Support.
The grey line shows the actual number of people who received a benefit between June 2015 and February 2023. Our forecasts of the number of people expected to receive Jobseeker Support from HYEFU 2022 and BEFU 2023 are displayed by the light blue line and dark blue line, respectively.
In February 2023 there were around 170,200 people receiving Jobseeker Support, which was around 100 more people than forecast at HYEFU 2022.
At BEFU 2023 the number of people receiving Jobseeker Support is expected to increase from around mid-2023 and reach around 200,600 by January 2025. After January 2025 the number of people receiving Jobseeker Support is expected to decrease to around 179,200 by June 2027.
