Benefit Forecasts for the Pre-election Economic and Fiscal Update 2023
The Treasury’s Pre-election Economic and Fiscal Update (PREFU) released on 12 September 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 June 2023. This publication describes the key benefit number forecasts from the Pre-election Economic and Fiscal Update (PREFU) 2023.
The last forecast was the Budget Economic and Fiscal Update (BEFU) 2023, which was published in May 2023. These forecasts are important because they are used to inform budget decisions and because the New Zealand Government spends a large portion of the Budget on Benefits or Related Expenses. 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 through 2023 in line with Treasury’s economic forecast, but slightly less than expected at BEFU 2023
The Treasury are expecting a period of subdued economic and employment growth through 2023 and into 2024.
This is expected to lead to the number of people receiving a working age benefit to continue increasing through 2023 and peak in January 2025 at a level slightly lower than expected at BEFU 2023 (see Figure 1).
The number of people receiving Jobseeker Support has been increasing and is expected to continue increasing through 2023 and peak in January 2025 (see Figure 2).
Figure 1: Working age benefit numbers
Figure 1 shows the historic number of people on a working age benefit as well as the forecast numbers.
The grey line shows the actual number of people that received a working age benefit between June 2015 and June 2023. Our forecasts of the number of working age people expected to receive a benefit from BEFU 2023 and PREFU 2023 are displayed by the light blue line and dark blue line, respectively.
In June 2023, there were around 350,200 working age people receiving a benefit, which was around 1,000 more people (0.3 percent) when compared to the BEFU 2023 forecast.
In the PREFU 2023 forecasts, we expect that working age benefit numbers will increase through 2023, peaking at around 382,900 in January 2025. This is around 1,000 people lower than expected at BEFU 2023.
After January 2025 the number of working age people receiving a benefit is expected to decrease to around 355,600 by June 2027.
Figure 2: Jobseeker Support
Figure 2 shows the historic number of people receiving Jobseeker Support as well as the forecast numbers.
The grey line shows the actual number of people that received a benefit between June 2015 and June 2023. Our forecasts of the number of people expected to receive Jobseeker Support from BEFU 2023 and PREFU 2023 are displayed by the light blue line and dark blue line, respectively.
In June 2023, there were around 172,500 people receiving Jobseeker Support, which was around 400 fewer people when compared to the BEFU 2023 forecast.
In the PREFU 2023 forecasts, the number of people receiving Jobseeker Support is expected to increase through mid-2023 and peak at around 197,400 in January 2025.
After January 2025 the number of people receiving Jobseeker Support is expected to decrease to around 176,300 by June 2027.
